You can learn a lot from Zappos.com. With over $1 billion in sales, it is one of the Web’s fastest growing shopping sites and has built the majority of its brand equity online. Seventy five percent of their sales come from repeat customers, so they have very high levels of customer loyalty.

How do they do it? Over 80 percent of their customers hear about Zappos.com through either word of mouth or online advertising. Print advertising accounts for only 15 percent of their media spend.

It starts with service through their Website. “Powered by Service” means: free shipping both ways, a 365-day return policy, fast fulfillment, and fast delivery. Zappos promotes its toll-free number visibly on the home page and you can talk to someone 24/7 via phone or live chat. They also use their website for customer testimonials.

Zappos also has the Associates Program, which allows online publishers to add a simple text link to their Website advertising Zappos.com’s shoes. They in turn earn referral fees if the link results in a sale. The current referral fee is 12 percent, and the average associate makes about $12 per order. They can choose one of Zappos.com’s banners and link straight to its homepage, recommend specific shoes and add a search box to their Websites.

Zappos also uses search engine marketing (SEM). They buy both generic keywords, such as “shoes” and brand terms, such as ‘”Clarks” on Google and other search engines. Then they uses Web analytics tools to track the sales from each keyword to look at which ones are the most effective.

For retention programs, Zappos sends out e-mails to customers with information about new styles and new brands. Customers also can sign up for specific, targeted mailing lists, depending on their interests. A customer looking for a specific item that is out of stock can sign up to receive an e-mail once it is available. They also have an e-mail newsletter called Shoe Digest, which lets customers talk about shoes with other Zappos.com customers. The opt-in e-newsletter discusses different topics every time, depending on what readers are interested in.

Zappos.com also has created a corporate blog that gives an insider view to the company’s culture. This helps with search engine optimization and provides another feedback loop from customers and most recently the company has been using Twitter to build brand equity. The company has 408 employees Tweeting at anytime with 5,681 “followers” signed up to read their Twitter updates.

The really amazing thing is that Zappos does not use coupons, promotions or specials. They don’t want customers to buy from them solely on the basis of price.