Delivering Happiness: Customer Service & Internet Marketing
Tony Hsieh, Zappos.com
Presented by NACPA
Tony Hsieh took the stage after sitting in on a North American Concert Promoters Association meeting. Although it’s not clear if this is how he learned the following, he’s definitely a quick learner.
“I’ve heard a lot of discussion about artists, and how to get the next artist in to draw the crowds,” Hsieh (pronounced “shay”) told the NACPA-sponsored open ses-sion. “Instead of worrying about artists, you can build a brand around your venue and the parties that you throw; something that will create memories. If I knew it was going to be a good time with friends, I would go even if I hadn’t heard of the band before.”
Hsieh is the CEO of Zappos, known for selling shoes online. The connection to the concert industry may seem strained but nothing could be further from the truth. The em-phasis of Hsieh’s company and presentation is customer service and how happy employees make for a successful environment. Last time we checked, the concert business includes customer service and employees.
As it turns out, Hsieh has been a customer of the concert business. He was not impressed.
He was one of many people to attend U2’s latest tour. The show was great, the party bus that he and 20 of his friends rented was a blast, but that was the extent of it.
“The VIP section seemed half-hearted, half-assed,” he said. “It seemed to just be a place to put up a tent and serve beer and wine, and have an excuse to charge more.”
They had to wait for the VIP tent to open. The ticket-taker didn’t look him in the eye. The security staff stared like Hsieh was up to something. There were long lines to the bathrooms and concession stands. Leaving the venue was a nightmare.
Sound familiar?
“My suggestion for all of you guys is to focus on the concert experience beyond just the ticket buying, like the way most of you seem to be thinking about it,” he said.
He found out that about 20 of his employees attended the same concert. It would have taken very little effort, and cost nothing, to learn this by an e-mail search and do something special for them, like set up a Zappos.com meeting area.
If this sounds foreign – to do extra work for no immediate benefit – understand that Hsieh’s philosophy has made him and his company a lot of money. Zappos.com is the No. 1 online source for shoes and since coming on board in 1999, Hsieh has grown Zappos from $1.6 million gross annual sales to $1 billion. It was recently acquired by Amazon but under the stipulation that Zappos remains completely autonomous.
Zappos was chugging along until about 2003 when Hsieh and his executives asked, “What do we want to be when we grow up?” They decided they wanted to build a brand based upon customer service.
They soon learned their employees believed in it, too, and quickly became more engaged with customers.
“Companies with passion that don’t care about marketing or profits end up being, ironically, number one in profits and market-ing,” Hsieh stated.
Here are a few of Zappos’ unique customer service-related features: First of all, free shipping, both ways. A customer can order 20 pairs of shoes, try them all on, and ship back 19 of them – or all of them – free of charge. There is a 365-day return policy. The 800 number is splashed across Zappos.com because the company prefers customers contact the engaging staff rather than buying on an impersonal Web site.
The call center is open 24 hours per day and so is the shipping department. It’s not uncommon for the shipping department to surprise a valued customer, who called in at midnight, with an overnight package. The call center is encouraged to surprise cus-tomers with free shoes or, if the customer mentions a birthday, to send them flowers. Does it dig in to profits? Of course, but the goal is to earn lifelong customers.
Employees of the call center work unscripted. Some tell jokes; others may hear a dog bark on the other end of the line and, being a dog lover, bond with the cus-tomer. If the shoe is not in stock, employees are required to tell the customer where it can be located on at least three competitors’ Web sites. Hsieh even relayed a story that involved a late-night drunken caller asking for pizza, and the employee who offered five restaurants in the area that were still open.
But that is not what Zappos is about. As much as the company emphasizes customer service, its main core value is developing a positive company culture. Zappos wants employees who believe in the long-term goals of the com-pany. In fact, after the training period, they are offered $2,000 if they decide they want to leave. After all, there are plenty of call centers elsewhere in Zappos’ home town of Las Vegas. Em-ployees start at $11 an hour so they need to have a long-term commitment.
Potential employees are asked unique questions like “On a scale of one to 10, how weird are you?” and “How lucky are you?” Zappos prefers employees that are “some-what” weird because the company doesn’t want the opposite – straight-laced bores. And it turns out, too, that “lucky” people tend to resolve problems quickly.
Zappos offers tours for anyone. The company will pick them up in a Zappos shuttle and Hsieh will give the tour. And, unlike some companies that hide their employ-ees, Hsieh ends with, “Here’s the kitchen, there’s the bathrooms. Go talk to anyone and, when you’re done, come find me.”
During the Q&A, an arena manager asked if there were problems giving call center em-ployees so much autonomy. One of them might give away too much free stuff, or another may make
a quip that the customer finds offensive. Hsieh said he has found that employees are too protective of the company and need to be encouraged to offer free goodies. As for making mistakes, it’s 99 percent good and “saying the wrong thing is fixable.”
Hsieh was asked how he can compete in a “Walmart world.”
“We don’t compete on price,” Hsieh said. “It would just be a race to the bottom.”
He also summed up his philosophy by quoting from “Notorious,” the movie about Biggie Smalls. It is a line attributed to Sean “Puffy” Combs, telling his new client, “Don’t chase the money; chase the dream.”
For further reading he suggested “Good to Great” by Jim Collins.
“Figure out what your core values are and build your culture to align around them,” he said.
|Joe Reinartz|