Saturday, 14 March 2009 at 2:00PM
Tony Hsieh - Zappos.com
He started out with his own homegrown pizza business in university. Then founded LinkExchange and sold it to Microsoft ($265 million). He learned al lot of leassons about company culture with LinkExchange. When sold it had about 100 employees and he dreaded going into work. This forged much of the mission of Zappos. Now they have 1400 employees in Las Vegas. They look to Virgin as an example of diversifying and maintaining service.
About 75% of their customers are repeat customers. They use what would be marketing money and sink it into customer service. They recently surpassed $1 billion in sales.
What is customer service? Contact info is explicitly listed at the top of every page. They rely heavily upon the phone as a way to communicate their brand with the customer. Of course, their free shipping and return policy.
They only advertise what they physically have in their warehouse. They used to advertise what the manufacturers said they had the their warehouses, but this delayed shipping and was not always accurate.This shaves 25% off sales in the short run.
They always upgrade shipping so the customer gets a Wow! effect. This is very expensive for them, but they view it as part of their word-of-mouth marketing.
They will direct customers to competitor sites if the competitor offers a better deal. Strangely, that solidifies brand loyalty. This also happens over the phone so it is personal and the customer remembers this experiences.
They tell their reps that they can spend as much time as they want on the phone with customers.
Great customer service is a byproduct of great company culture. They have a two-level interview process: one for the job fit and one by HR for company culture fit. New employees need to pass both and either can be a basis for firing. Really?
They have training that involves doing a wide variety of jobs within the comany. They offer people $2000 to leave during training. This gets them people who really want to stay. The people who did not take the offer are people that have to commit and engage with the company.
They have a CultureBook in which all the employees write down why they work at Zappos. they make this available to all new employees.
Twitter is used extensively. They offer Twitter training to new employees and they use it for internal networking and it bonds co-workers. http://twitter.zappos.com/
The brand is created by the company culture and they are converging. Branding may lag a bit, but transparency directly links the culture to the branding.
Example: Woman accidentally left $150 in a returned wallet. She received a letter from the warehouse worker who found it returning it. This is a result of good company culture. Rather than spending gobs of money for surveillance of employees, put the money into the hiring process and let things take care of themselves.
They wish to won the 3 C’s: Clothing, Customer service and Culture
“People may not remember exactly what you did, but they will remember how you made them feel.”
Zappos Core values
- Deliver WOW Through Service
- Embrace and Drive Change
- Create Fun in a little Weirdness
- Be Adventurous, Creative and Open-minded
- Pursue Growth and Learning
- Build Open and Honest Relationships with Communication
- Build a Positive Team and Family Spirit
- Do More with Less
- Be Passionate and Determined
- Be Humble
Steps for building a brand that matters:
- Decide if you are trying to build a long-term and sustainable brand
- Figure out your values and culture
Do this early on when you are small. What are your core values and alignment and then live the brand. (I know this sound hokey) They try to have every employee know these core values. Example: When reporters visit, any person can be the company’s spokesperson. - Commit to Transparency
twitter.zappos.com; newsletter: askanything; zapposinsights.com - Vision
“Whatever you are thing, think bigger.” Idea: If you follow the vision instead of the money then the money will follow. - Build Relationships
This is not networking. Be interested - Build Your Team
“If you want to go quickly, go alone. If you want to go far, go together.” - Al Gore - Think Long Term
Repeat customers. This is not an overnight success story.
Happiness: People are generally very bad at predicting what will bring them sustained, long-term happiness. What if you spent a portion of your time learning the scince of happiness.
- Perceived control
- Perceived progress
- Connectedness
- Vision/meaning - being a part of something greater than yourself
Three stages of happiness:
- Pleasure - temporal stimulus
- Engagement - get lost in what you enjoy
- Meaning - higher purpose
Slides: http://www.slideshare.net/zappos/zappos-sxsw-31409
Misc. references made:
- Book: Good to Great
- Book: Peak
- Book: Tribal Leadership
- Book: Four Hour Work Week
- Book: Happiness Hypothesis