Zappos CEO Talks Culture Fit and the Importance of Creating a 'Wow' Experience
Last week at the TED conference, Seesmic founder Loic Le Meur held an informal interview with Zappos CEO Tony Hsieh (pronounced Shay), whisking him away to a bathroom to learn more about this forward thinking company and the man social media experts are calling the master of customer experience.
We've embedded the video at the end of this post, but these are a few of the highlights.
According to Hsieh, the ultimate aim of the Zappos brand is to be the very best when it comes to customer service and consumer experience. "Our hope is in 10 years people won't even realize we started out selling shoes online," he explains, "we sell clothing and handbags, accessories - even electronics and house wares." He also points out that it doesn't necessarily need to be online. "20 - 30 years from now, I wouldn't rule out Zappos Airlines," he said.
Great customer service is not something offered by the majority of companies and Hsieh suspects a lot of people are frustrated by this. "In the long run, customer service is just good business," he says. "The problem, however, is that the payoff is usually two or three years down the line."
Given the company made over a billion dollars in gross merchandise sales in 2008 after starting with almost nothing in 1999, and that repeat customers and word of mouth were the main drivers of that growth, we can see how many businesses are trying to model themselves on the force that is Zappos.
So what is different about Zappos?
- The company provides free shipping both ways
- Zappos has a 365 day return policy
- Only products available in the warehouse are placed on the site
- The warehouse is open 24 hours a day
- The company is contactable 24 hours a day, 7 days a week
- The 1800 contact number is prominently placed on every page of the site
- The company trusts in its reps; sales staff don't have scripts
- If products are unavailable, sales staff direct customers to competitors
While some of these ideas are extraordinary, like the 365 day return policy, others are quite easy to implement - putting your telephone number on every page of your Website. Clearly this is only a sampling of the alternative methods implemented by the company and some of them are certainly not efficient to the company's bottom line, but Hsieh firmly believes creating a 'wow' experience for the customer and investing in a corporate culture that allows employees freedom and space is the essence of what makes Zappos so successful.
"If you get the culture right, then most of the other stuff, like great customer service or building a brand will just happen naturally." Hsieh says.
While the company has formalized the definition of its culture into ten core values and people are hired and fired based on those values, Hsieh believes the company culture is different because it is not driven by him, but the employees who themselves determine how they want the culture to evolve.
"We've actually passed on a lot of really talented people that we know would make an impact to our top or bottom line," says Hsieh, "but if you know they're not a culture fit we won't hire them. Similarly, he explains the company will fire people even if they're doing their job perfectly if they're bad for the culture.
The Culture Book, a book Zappos puts out every year, consists of thoughts from all Zappos employees about what the Zappos culture means to them. But for typos, it's unedited. Hsieh offers the book freely to anyone who wants a copy.
Ultimately, Hsieh believes that every company needs to determine its core values, and rather than have a vague sense of what those ideas should be, he insists it is important to select 'committable' core values. "By committable, you must be willing to hire and fire based on them" he explains.
So next time you're in Las Vegas, remember that Zappos offers tours every weekday; Hsieh suggests Mondays or Thursdays are best. "Just e-mail me and we'll pick you up in the Zappos shuttle, give you a tour and drop you off at your hotel." That's a fairly impressive offer, and one not many companies are likely to make.
If you truly want to get a feel for the young bright Zappos CEO, watch the video below, and perhaps you'll get a glimpse into why this company is wowing the social media set.
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Great article. I am very inspired by Zappos culture. Can you please email me a copy of the culture book.
Thanks!
what a wonderful business to highlight. Thank goodness someone in business has remembered who it is one tries to please in business: the customer.
Gives me hope for business in the future!
Good on those guys they deserve every good thing that come s to them. Will keep their business model in mind. It is actually all just good common sense and good business ethics!
bravo!
oh yes I would like a copy of the ebook as well, thanks!
Thanks for the writeup! FYI, my last name is spelled "Hsieh" (not "Hseih")
My experience with the website rates is as one of the worst good sites.
Yeah, oxymoron, but the site is technically a "wow" site, but the real customer experience that I, and friends, have had make it seem like someone is trying to 'play' Amazon without thinking it through.
Go enter "BOWLING" into the site. You think maybe shoes would be a good match.. how about a Deep Fryer? Well, I am glad they had that in stock, but that isn't what I want and well, I am not sure how it relates to Bowling.
Want to send me to a competitor? How about including the competitors products inline?
I wanted to get my friend a pair of specific Brunswick Bowling Shoes. Zappos didn't have them. But when he saw all the other stuff on the page, he was immediately turned off.
You can branch out, but don't sell me everything AND the kitchen sink when I want something specific.
It was a nice touch that the CEO responded to my tweeet that he would have the "web team" look into it.
But do some usability studies please.
Heck.. hire me to come by and tear it all to pieces. I am available =)
@R.Moose: true if you type "bowling" into Zappos hardly 50% of the goods are related to "Bowling". At startup wouldn't dare todo this when presenting to a VC.
Let's see how well Zappos survives the recession.
Hsieh has it write, be open and honest and the customers will love you. I have found better deals than those on Zappos but I stick with them because of the great customer service and knowing that if the product is not perfect, they will take it back no questions asked.
Awesome article !!
Check out the Visual preso on
"Zappos The King Of Customer Service" @ www.VizEdu.com
thanks
Zappos has had a big impact on how we run our company and think about service. Great company.
Zappos' profit is downright horrible compared to their spend. Their website is less than impressive from UX perspective, not to mention ugly.
As a customer though, I was impressed. That level of service is pretty extreme for how little they make on an order.
I have a feeling their just building the company up, and then they will start cutting back on things like employee perks and CS to tweak their profitability.
I met Tony at PubCon 2008 in Las Vegas at a party sponsored by Zappos. My company specializes in online branding and I was very impressed how the company culture ties in with the branding of Zappos.
I just made my first purchase it was a very easy experience. I saw the shoes from every angle and I purchased in 3 clicks.
I do believe, though, that if the site wants to "wow" the customer it does have to be more visually appealing.
Zappos is the epitome of awesome. I've been so pleased in dealing with Tony Hsieh and Brian Kalma of the Zappos team and have found my transactions with them most convenient -- they really do go above and beyond, and that's what I like about them.
If only other companies would follow suit, they'd be performing so much better.
I e-mailed in to Tony to have the corporate culture book sent to me (in Calgary, Canada). We were pulling an all nighter to finish a project, I sent the e-mail Sunday night (late).
Monday morning I got a response from Tony (or at least from his e-mail account) - it was in the mail.
7pm Tuesday, I notice a package in my mailbox.
Now that was speedy.
Very cool book too, basically employees and customers talking about the culture and experiences with Zappos.
Totally impressed, it teaches us that even if you are responding to something that has nothing to do with your core business (i.e. me ordering shoes), you should treat that with the same values you hold your business to (great service and speed).
Plus, I am so impressed I think I'm going to order a pair of shoes now ;)
Cheers,
Mike
I enjoyed your interview on the culture of your comoany.
Thank you for sending me a copy of your book. I look forward to receiving it.
Best wishes,
Charlote
I do believe, though, that if the site wants to "wow" the customer it does have to be more visually appealing.
Very cool book too, basically employees and customers talking about the culture and experiences with Zappos.
Loved the interview very inspiring. I am speaking at a conference on customer culture and will mention what I heard on the interview. Please send me the ebbok asap. Thanks
Dolly
President of International Customer Service Asssociation
Canada - Toronto
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Tony is pure awesome, as is the culture he has created at Zappos. I was lucky enough to get Tony to give his advice to entrepreneurs on what they should focus on. The video of that interview is here: http://blog.adsdevshop.com/2009/11/19/advice-for-entrepreneurs-from-tony-hsieh-ceo-of-zappos/
Thank you again for all the knowledge you distribute!I am glad to post my views and points in this blog! I will keep visiting this blog very often.