Giving Tuesday– in the midst of a pandemic– coupled with notice of the tragic death of Tony Hsieh, founder and former CEO of Zappos, the online shoe seller,  reminds me that more than ever it’s again time hammer home the importance of great Donor Service.

(Of course, the first step will be to promptly and properly thank your Giving Tuesday donors with something more than a digital autoresponder.  I’m sure every Agitator reader will have deposited those thank you notes in the mail by Thursday.)

First, a word about Tony Hsieh and why his commercial legacy should inspire every nonprofit fundraiser.

In the early days of Zappos the company had to overcome customer doubts about buying shoes without first trying them on.  The company removed that barrier by offering free shipping and free returns. In short, customers could order a half dozen pairs of shoes, try them on at home and keep only the ones they liked.

That was the first step.

The ultimate “secret” of Zappo’s success could be found in its friendly, reliable customer service.  The founder’s stated goal was to make customers say “Wow!”

Here are some of the techniques that Tony Hsieh employed to get to “Wow!” Techniques that some critics considered “visionary” and others thought “wacky”:

• Rather than outsourcing call centers Zappos made them a core in-house function.
• Phone numbers were displayed prominently on the website, and customers were encouraged to call Zappos representatives rather than use email. “The telephone is one of the best branding devices out there,” Tony wrote in his best-selling memoir, Delivering Happiness: A Path to Profits, Passion and Purpose.
• Tony considered a helpful call-center representative far more effective than a social media blast in cultivating loyal customers. He wrote that that some of them even helped customers find shoes on rivals’ websites when Zappos couldn’t supply the desired shoe.
• Tony was open to trying new ideas that might strike some as crazy. One of those ideas was offering new hires a month’s pay if they quit. This proved a good way to eliminate employees we weren’t highly committed.
• So that top notch customer service would be at the heart of the company rather than on the margins, Tony moved Zappos headquarters to Las Vegas for access to a labor pool skilled at customer service.

In 2009 Amazon bought Zappos for $1 billion but impressed with Tony’s focus on customer service and his quirky management ideas let him operate it independently as its CEO.

Seems to me there is significant similarity—and lessons to be learned—between the mindset of some commercial e-commerce stores, big box stores, burger chains and many nonprofits.

There are two types of consumer retailers.  Type A views workers who serve the public and activity that supports customers as a “cost center” and does everything possible to hold down wages, benefits, and other customer-related costs. Type B—like Zappos—view well-trained, motivated and friendly worker eager to help customers as a key investment in a sustainable and growing profit center.

Similarly, there are two types of nonprofits.  Type A views donor service as a “cost center” and does everything possible to hold down the costs and quality where donor services are concerned. (Thus, no prompt and friendly “Thank You” notes dropped in the mail right after Giving Tuesday [or any other Tuesday for that matter] …no easy to find phone numbers on the website…few or not properly trained and motivated donor representatives.)

The Type B nonprofit views donor services as an income or “profit center” believing that a donor whose inquiries or complaints are quickly and properly resolved will respond with higher donor loyalty and value.  These are the organizations that realize poor donor service accounts for a significant part (20%) of why donors drop out and they take steps to beef up thank you processes, onboarding processes, and provide ongoing ways in which donors can provide feedback.

Of course, I do realize that while every Agitator reader knows and appreciates the increased retention value that springs from good donor service, many have to battle upstream against CEOs who are not donor-centered and bean counters who have no idea why taking good care of donors is so fundamentally important.

As we wrestle with planning and innovation for surviving and thriving in both a Covid and Post-Covid world, now’s the perfect time to be asking: “How does our organization view donor service?  Profit Center or Cost Center?

Roger