Tony Hsieh, the CEO of Zappos.com, presented his “Top 10 Lessons Learned in E-Commerce” at this year’s SXSW Interactive. Last year, Tony spoke on the Customer Service is the New Marketing panel. The principles they use at Zappos really opened my eyes to true customer service.

This year, Tony’s top 10 e-commerce list included:

1. E-Commerce business is built on repeat customers. Even though you are online, you can still foster long-term relationships.
2. Word of mouth really works online. Most of Zappos’ new customers come from offline word of mouth.
3. Don’t compete on price.
4. Make sure your web site inventory is 100% accurate. Customer expectations can be shattered if you don’t deliver what they saw available on your web site.
5. Centrally locate your distribution to speed shipping and delivery times.
6. Customer Service is an investment, not an expense. The relationships that you form via great service will pay for themselves in repeat business.
7. Start small & stay focused. Don’t try to get too big, too fast.
8. Don’t be secretive. Don’t worry about competitors.
9. Actively manage your company culture. Zappos has a culture book they give to employees and they immerse every new hire in the call center and distribution world for several weeks before they begin their “real” jobs.
10. Be wary of so-called experts. You know your company and your culture best. As Hamlet said, “To thine own self be true.”

You can view the slides from his presentation here:

Rainy Day Example

While e-commerce is the vehicle through which Zappos.com makes their money, they are focused squarely on top quality customer service.

photo by sprigley

The fourth day of the SXSW conference was a rainy day, start to finish. As I left for lunch, I saw the Zappos CEO and crew dressed in rain ponchos and handing out free Zappos.com branded rain ponchos to everyone.

Customer service is such a part of their being that these guys not only exceed expectations in e-commerce but also wherever they go. I saw people in Zappos ponchos all day long. Brilliant timing and marketing!

Any fear, uncertainty, or doubt that stands between your online customer and a successful checkout must be removed for your business to succeed. In a world bombarded by bad news of security breeches, hackers, and spam, customers are more and more weary of anything that doesn’t feel right.

After seeing an advertisement for CarMD, an automotive self-diagnostic tool, I went to their website. When I clicked the “Checkout” button, I got a security error:

I knew from experience that this error was probably benign. Since I have purchased secure certificates for some ecommerce sites I have built, I knew that this error is easy to get if things aren’t setup properly.

However, most people who shop online don’t also make websites. For the majority of people, a cryptic error message like what I saw may be enough to scare someone away.

To CarMD’s credit, they have since fixed the problem. Fortunately for them, they have removed one roadblock to people purchasing online. But what about your company? Is there something standing in the way of the customer making a purchase on your website?

Your online application or website must stay current or people will lose confidence in your company. This may seem like common sense but unfortunately as your website grows, there will be pieces that you forget about.

We recently tried to redeem some of our frequent flier airline miles via our credit card’s online website.

I entered that we’d be leaving from Austin and they identified that request as leaving from the Robert Mueller airport. Unfortunately, that particular airport has been closed for years and is now the home of a new hospital, shopping center, and residential developments. I don’t see any flights leaving from there any time soon!

This initial data error completely undermined my confidence in the process, this online application, and my frequent flier credit card. If this one thing was wrong, what else was going to be wrong?

I decided to press ahead since I had little other choice. Unfortunately, things only got worse as my wife and I didn’t even get seats together. And to add insult to injury, they asked for my credit card number again. If this is my credit card company’s site and I logged in, why do I have to answer redundant questions?

Double check your website today to see if there are little blemishes that should be corrected in the information you are presenting.

Set up a regularly scheduled process where you review your site for accurate data.

With frequently reviewed site content, your customers will be assured a fresh, and up-to-date user experience. This will create the confidence needed for people to become (and stay) your customers.

Once upon a time I signed up for an email newsletter. I tried to unsubscribe from this newsletter a few weeks ago.

When I clicked on the unsubscribe link at the bottom of the email I saw this page:

You’ll notice that there are two radio buttons but no label on them. I clicked the “Change subscription” button and was on my way.

A week or so later I realize I was still getting this guy’s newsletter. What’s going on?

I again clicked on the link at the bottom of the email to unsubscribe and this time I noticed something different:

For some reason, the labels of the radio buttons were white text. They were impossible to see without highlighting the words with the mouse.

So this time I did select the right radio and was on my way. Let’s hope it worked!

This is a great example of how companies try to make it difficult for customers to leave. You can’t keep customers forever. If you try to prevent a customer from leaving by some form of trickery, they will just leave angry. That anger could undoubtedly prevent future business from that customer, not to mention potential business from the friends and family that hear about their experience.

I tried to login to my Gmail email account the other day and was greeted by this error:

Server Error
The server encountered a temporary error and could not complete your request.

Please try again in 30 seconds.

Oh, no! What happened? Is my email in danger? When will I be able to get my email?

Cryptic error messages can lead your customers down some scary psychological paths. They will imagine the worst case scenario even when the problem is minor.

The next time I tried Gmail, I got a better message:

We’re sorry, but your Gmail account is currently experiencing errors. You won’t be able to log in while these errors last, but don’t worry, your account data and messages are safe. Our engineers are working to resolve this issue.

Please try logging in to your account again in a few minutes.

This message helped eliminate any fear, uncertainty, and doubt with these words: “don’t worry, your account data and messages are safe.”

A simple, yet reassuring message is all it takes keep your customers calm.

If you have a sense of humor, you can combine the practical example above with that of popular photo sharing site Flickr. When catastrophe strikes Flickr, instead of yelling “Server Error,” they proudly proclaim “Flickr is having a massage”.

Whether you are funny or serious, remember three things:

1. Reassure your customers that their data is safe
2. Set expectations of when everything will be back to normal
3. Instruct the customers on what they can do in the interim

My wife and I decided to try out Logoworks this past week. After starting her order, Logoworks apparently sent her an automated email showing how she could finish the process.

The email even offered help if we needed any. We could simply call their toll free number, listed as “1-800-xxx-xxxx.” The “xxx-xxxx” in the phone number weren’t digits but the letter X.

It appears as though the email designer put those in as a placeholder and no one went back to add in the real number. Now this email is being sent to countless people and Logoworks may never know.

In e-commerce, thorough testing of outgoing emails is a critical part of releasing any new updates to your system. You should test those at the time they are rolled out to your production systems.

Augment your initial roll out testing by signing up for your automated emails. If you are receiving what your customers see, you’ll more quickly spot errors, typos, or any problems. This works well for subscription type emails or even autoresponders.

Your customer should never open an email that you haven’t already seen. Naturally the content of the mail may be customized for the customer. However, the template or copy writing around any personalization must be reviewed and tested.

Your customers may be nice and willing to notify you of problems. However, many customers will never say a word when something goes wrong. If you solely rely on them to test your product, you may hear about trouble or errors after much damage has already occurred.

Your company must make a professional first impression with potential customers. Don’t set yourself up for failure by being cheap.

I drove behind an electrical contractor’s truck this week. This small business owner had big magnets on the sides of his truck with his company name and email address. It read something like this:

Jenkins Electrical
ecj_6@yahoo.com

There was no phone number or website address. Just a cryptic Yahoo email address.

Here are the top 5 questions you must ask yourself if you use a free email address for your business:

1. How are potential customers suppose to remember a random sequence of letters for an email address? (Especially if they are driving down the street)

2. What does a free @yahoo.com email address say about your business? Hint: It says cheap.

3. Are you missing an opportunity to build your brand presence online? That email address could just as easily have been a memorable and relevant domain name like JenkinsElectrical.com.

4. What happens if your free email host disappears? Poof! There go all your business emails.

5. What does a free email address say about your professionalism? Please do your business a favor and buy a relevant domain name. Think of this from the customer’s perspective. A free email address could mean you are only a temporary business that may not be there to support the customer post-sale.

Solution: Buy a domain name and set up a website. Get custom you@yourcompany.com email addresses and put up that professional online presence your potential customers will trust.

This post is part of Problogger’s Top 5 Group Writing Project.

I saw a new online task management application this week called HiTask. The first time I visited their site I noticed they had Google Ads across the top of their pages:

Google was so adept at matching the keywords of the site with ad links that I was seeing ads like “Tasks” and “Task Management.” To the untrained eye, these could very well be parts of the HiTask site and pull users into clicking on the ads.

This was very clever placement for generating ad revenue but it completely distracted potential customers from signing up for the service.

The good folks at HiTask must have noticed this because, last I checked, the ads have been moved to the bottom of the pages.

I’m all for having ads on a site. (They help pay the bills on this site.) However, your advertising strategy for content sites must be different from online web applications.

For web-based applications, your goal is to get people to sign up for your service. Get people to convert on that call to action first, then show them ads.

Distracting prospects with ads may give you a few extra dollars today but undermines your long term objectives of gaining customers. Keep your eye on the long term prize!

How many times have you researched a purchase online, just to go down to the store so you could personally inspect, hold, touch, or try on the product?

As an online merchant, how can you help your customers feel confident enough in your product to make the purchase without having personally seen or touched your merchandise?

A recent Entreprenuer magazine article discusses the need to make your online offerings “wow” customers:

Now that most of your customers have broadband, your site should offer rich media features such as zoom, virtual e-catalogs and dynamic color-swatching. “It’s basically a must-have for many retailers, especially those where touch and feel are critical to product conversion, says Sucharita Mulpuru, … “Anyone in this space who doesn’t have features such as zoom and alternative views is seen as being really behind.

Example #1: Dell

Although I’ve had my share of trouble with Dell’s customer service, their website does a good job of helping you see the product before you buy. Some techniques they use include:

• 360 degree views of the products where you can rotate the product
• Several product images from different angles
• Detailed specifications and pictures of all the plugs and cable jacks

You can basically take a product, spin it around and truly see what you’ll be getting out of the box.

Example #2: Lands End

Clothing retailer Lands End creates an online environment where you can get as close to trying on your purchase as possible. They feature:

• A virtual model of you that you can use to “try on” clothes
• A detailed zoom feature on product pages that lets you see not just the overall pattern but down to the type of grain on the fabric
• If the previous features aren’t enough, you can order a free swatch of fabric to physically inspect before purchasing.

These two companies offer a variety of options to help customers visualize and even try on their products — all online. Each feature will likely help different types of customers. The more visual aids you provide customers, the more likely they’ll be confident about their online purchase. Confident online shoppers will skip the trip to the store and buy directly from you today.

We recently bought a Little Tikes slide for our boys. Since we made our purchase via a listing on Craigslist, we didn’t get any assembly instructions.

I came home and found the pieces nearly impossible to assemble. I went online and found the manufacturer’s website and the actual product page. Fortunately for me, they had an “instructions” tab that offered step-by-step assembly diagrams. They worked great and the slide has already been put to good use.

Customers will often return to the point of sale seeking manuals, instructions, or support.

On the web, you can easily incorporate these elements in the product pages where you sell your merchandise. Don’t overlook customer support post-sale, as that is often the time they need you the most.

If customers can’t find the help they need from where they made their purchase, they may find comfort in the arms of a competitor who does provide superior support.

Even though customers may buy your product via third parties or used, your supporting relationship with them will influence future purchases of your product.