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May 24, 2010

Zappos.com's $1.6M Mistake That Boosted its Brand

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Zappos + 6pm Logo

Zappos.com, the popular shoe site that embraces exceptional customer service and successful use of social media, made an expensive mistake over the weekend that cost them $1.6 million but ultimately used the blunder to boost their brand image.

So what happened? Zappos.com's sister site, 6pm.com , ran into a technical glitch that priced everything on the site at $49.95 or under for several hours on Sunday morning. Items that ranged up to thousands of dollars could be bought at $49.95.

When Zappos.com realized the mistake, they shut down the site to fix the problem and restore the original prices. But here's the best part: the company honored the prices they mistakenly sold the products at.  Aaron Magness from Zappos.com stated, "While we're sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million - ouch) selling so many items so far under cost. However, it was our mistake. We will be honoring all purchases that took place on 6pm.com during our mess up."

What can marketers and business owners learn from this?

Staying consistent with their core value of building honest relationships with their customers, Zappos.com held up their end of their promise to deliver phenomenal service. Instead of allowing the media to criticize the mistake, they used the press to display their commitment to consumers. The free publicity helped generate buzz for Zappos, secured its reputation for stellar customer service, and greatly increased the reach of 6pm.com across the web.

For many businesses, it is important to remember that social media and traditional media can play a huge role in generating buzz for your company and impacting your brand image. Taking advantage of PR, even in bad situations, can help your company shine amongst your competition. By flipping an unfortunate incident on its head, your company will not only gain credibility for admitting its mistake but also receive customer trust for handling the situation in a transparent and honest way.

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Topics: Public Relations

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