For online retailer Zappos.com, its recently unveiled and first-ever loyalty program, Zappos Rewards, is a natural next step. The four-tier program will allow customers to earn rewards points toward future purchases, get free expedited shipping on all orders, and receive early access to exclusive products and sales.

With the launch of Zappos Rewards, Zappos.com is the only retailer offering free two-business-day and free one business day shipping on all orders with no membership fees or minimum order values.

Zappos.com shoppers can now earn and redeem Rewards Points in various ways, and the benefits vary based upon tier placement (Silver, Gold, Platinum, and an invite-only Elite tier. Customers may redeem every 1,000 points earned for $1 in rewards codes.)

Loyalty360 caught up with Kedar Deshpande, director of marketing at Zappos.com, to find out more about this exciting new loyalty program.

What factors prompted the launch of Zappos Rewards and what are your goals for the program from a customer engagement/customer loyalty perspective?
Deshpande: At Zappos, we’re always looking for ways to take our customer service to the next level. Developing a rewards program to benefit loyal customers was a natural next step for the brand. We designed the program with our customers’ needs in mind, leaning heavily on a key company value: To live and deliver WOW. We believe this program will truly wow our customers and we look forward to customer feedback. 

Why did you offer a four-tiered benefits program and what is the thinking behind the free two-business-day and free one business day shipping on all orders with no membership fees or minimum order values?
Deshpande: As we were building the program and evaluating other loyalty program models, we felt a tiered program would differentiate us from others in the e-commerce industry. We pride ourselves on fast, reliable shipping and wanted to give Zappos Rewards members free two-business-day and free one business day shipping on all orders as they make their way through each tier.

We continue to hear about brands that are looking to create alignment between their customer loyalty efforts and the brand promise. Should all brands try to become the next Apple or Amazon, or is it more realistic and beneficial for brands to understand their own unique brand identity, and then define objectives, process, and programs that align with that unique identity? 
Deshpande: We believe brands need to stay true to their unique identity to best understand and speak to their customers. Not everyone can be the next Apple or Amazon, nor should they try to be. We developed the loyalty program with Zappos’ loyal customers and with our core values in mind. Tailoring our program to those things has helped us to create a program that will provide value to the customers who have helped us build our brand.

How do employee loyalty and employee engagement fit into the customer loyalty discussion?
Deshpande: We gathered input from employees throughout the entire process of developing Zappos Rewards. Without employee input, especially from our customer service representatives who interact directly with customers on a daily basis, our program wouldn't be what it is today.

It’s a very attractive loyalty program. How much research and development was done prior to the launch?
Deshpande: Significant research and development went into the launch of Zappos Rewards. We looked at customers' responses to our VIP program - what they loved about it, what they believed it was lacking, as well as current market trends to create a truly distinctive program.

How sophisticated would you say your customer experience and customer loyalty initiatives are?
Deshpande: While we set out to build a program where earning and spending points is simple and easy for customers, we simultaneously wanted it to be more sophisticated than a simple cash back loyalty program. With that in mind, we included features like premium returns services including UPS pickup and returns beyond 365 days, dedicated phone lines for Zappos Rewards members, early access to sales and products, and other features that set us apart from other retailers.

How do you feel customers are changing and how are you adapting to that change? Is this just the case for your brand or vertical? Or is this affecting everyone?
Deshpande: More and more, customers are expecting to be recognized for their spending, whether they’re shopping for shoes, groceries, flights, or anything else. Not only that, but many customers now carry rewards credit cards where they’re incentivized to spend on anything and everything. Another change in customers is the expectation of personalization. In the early days of personalization, customers found targeted ads creepy and intrusive, but now the mindset has totally shifted to where customers are disappointed in marketing that isn’t personalized for them. The expectations of incentivized shopping and personalization aren’t new, so Zappos Rewards is partly about adapting to that change, and partly about going above and beyond that to make a program that’s truly special.

What metrics will you use to measure success of your new loyalty program?
Deshpande: Aside from delivering happiness – which is always our priority, no matter the initiative – we hope to see both new and existing customers sign up for Zappos Rewards.  From Zappos Rewards members, we'll measure success quantitatively and with qualitative feedback. ​

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