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PubCon 2009: Zappos CEO Tony Hsieh Keynote

Posted on Nov 10th, 2009
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    tony-hsiehZappos has grown gross merchandise sales from $1.6M in 2000 to over $1 billion in 2008 by focusing relentlessly on customer service – a potent digital marketing tool. Tony Hsieh, CEO of Zappos, kicked off day one of PubCon 2009 with a keynote on the importance of delivering happiness through service.

    Founded in 1999, Zappos has grown to 1,400 employees and is listed at #23 in Fortune Magazine’s “100 Best Companies To Work For.”

    Zappos is “Powered by Service.” Its goal is to provide the best online shopping experience possible.

    Customer service in action:

    #1 driver of Zappos’ growth is from repeat customers and word of mouth. Put a focus into the customer experience, create something that is worth talking about. Let customers do the marketing for you through digital (and physical) channels.

    Customer service:  What customers see first on the Zappos website:

    • 24/7 1-800 number on every page
    • Free shipping
    • Free return shipping
    • 365-day return policy

    Consumers are bombarded by thousands of marketing messages daily.  As low tech and unsexy as it may sound, the telephone is one of the best marketing devices out there.  Zappos encourages customers to call them – and yet, 95% of their orders are online.  What they have found though is on average, nearly all customers contact them at least once through the phone.  Zappos is actively building personal relationships with their customers, who in turn are helping them grow.

    What customers experience:

    • Fast, accurate fulfillment
    • Most customers are “surprise”-upgraded to overnight shipping (creates a WOW experience)
    • Friendly, helpful, “above and beyond” customer service – even directing customers to competitors if they are looking for something Zappos doesn’t have

    What Zappos does internally:

    • No call times, no sales-based performance goals for reps
    • Run warehouse 24/7
    • Inventory all products (no drop-shipping)
    • 5 weeks of culture, core values, customer service and warehouse training for everyone in Las Vegas office
    • Customer service is not just that department, it’s everyone
    • Culture book – all employees contribute a few paragraphs. Except for typos, it is unedited. Everyone reads it.

    Zappos wants to own the three C’s: clothing, customer service, culture.

    Customers tell them Zappos is “happiness in a box”. Whether that happiness is from the product, their customer service team or the internal culture, it’s all about delivering that experience through both digital channels and a tangible product.

    Zappos top 10 core values:

    1. Deliver WOW through service
    2. Embrace and drive change
    3. Create fun and a little weirdness
    4. Be adventurous, creative and open-minded
    5. Pursue growth and learning
    6. Build open and honest relationships with communications
    7. Build a positive team and family spirit
    8. Do more with less
    9. Be passionate and determined
    10. Be humble

    Tony touched on the importance of hiring people who consider themselves lucky/optimistic. People who consider themselves lucky pay more attention to detail and are cognizant of their surroundings. Luck is about being open to opportunity. This is important in a world where we are all connected: Your employees are potentially a great marketing asset to spread your brand in the right light.

    Committing to transparency – Zappos puts themselves in the public spotlight:

    During Zappos tours, visitors are free to walk around the offices and talk to whoever they want. They are comfortable doing that since they invest so much in hiring/training of employees up front. Employees are trusted to represent the Zappos brand just by being themselves. People leave buzzing about the brand.

    What Tony hears frequently: “That’s great for Zappos, but it would never work at my company …”

    The response: It doesn’t matter what your core values are, as long as you commit to them. First, figure out what your core values are. Second, seek alignment across all staff. Values must be “real,” not overly corporate/lofty.

    In terms of vision: Whatever you’re thinking, think bigger. Decide if the vision actually has real meaning. Then, chase the vision, not the money. The money will actually follow.

    For entrepreneurs: “What would you be passionate about doing for 10 years even if you never made a dime?

    For employees: “What’s the larger vision and greater purpose in their work beyond money or profits?”