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TheStreet Open House

Amazon-Zappos Highlights Customer Service

Stocks in this article: AMZN VZ S

SEATTLE ( TheStreet) -- It's Business 101: Happy customers become regular customers. And maintaining a core of regulars can be less time-consuming and expensive than constantly marketing to attract new business.

But can a company thrive by making customer service the centerpiece of its mission? Yes, in the case of online shoe retailer Zappos.com, which was recently acquired by Amazon (AMZN - Get Report). Selling shoes isn't exactly a game-changing or particularly high-margin business. What sets Zappos apart, and attracted Amazon, is its customer-focused culture and buyer loyalty.

Could above-and-beyond customer service make your business stand out, too?

For many companies, catering to customers is seen as just another expense. Training employees to be effective and empathetic costs money. Perks like free shipping or no-questions-asked returns cost more money. Even setting out free coffee for office visitors adds up over the course of a year.

In these cost-conscious times, cutting back on those extras seems like an easy call. But companies like Zappos are taking the opposite tack. They still offer free shipping not only on every order, but for returns as well. And those returns are accepted for a full year after the date of purchase.

In a letter to employees announcing the Amazon deal, Zappos Chief Executive Officer Tony Hsieh wrote: "Our vision remains the same: delivering happiness to customers, employees and vendors. We just want to get there faster."

Delivering happiness? (I thought the mission was to deliver shoes.) Whether you find Hsieh's goal inspiring or hokey, there's no denying that his company's focus on the customer has given it a clear identity in the marketplace. Zappos estimates that 75% of its sales go to repeat customers. As those customers request new items, from sunglasses to hats, the company has gradually expanded its retail reach.

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