Customerville PRO Resources. Measuring customer experience is now part of the experience
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1 Customerville PRO Resources Measuring customer experience is now part of the experience
2 PRO Guide Series How Zappos Delivers Happiness With $1 billion in annual gross sales, online clothing retailer Zappos isn t just another successful company. They re freaking geniuses. After we read Delivering Happiness: A Path to Profits, Passion and Purpose, we realized that many of Zappos innovations could find homes in all kinds of companies. Written by co-founder and CEO Tony Hsieh, the book covers a lot of ground: Hsieh s rise to success as the co-founder of LinkExchange, a dot-com giant eventually acquired by Microsoft for $265 million; the tenuous, rollercoaster-like start-up of Zappos; and most importantly the current, deeply innovative practices that make the company the success it is today. Delivering Happiness is definitely worth your careful attention, but just in case you don t get around to it, we ve distilled what you need to know. First, a little background... When a youthful Tony Hsieh was deciding after graduating from Harvard what he wanted to be when he grew up, he determined that he wanted to own a company that combined profits, passion and purpose. After a financially successful but less personally fulfilling career building and investing in companies that focused mostly on the first of those three elements, he knew as a multi-millionaire that he didn t need or want more money. What he wanted was to love what he did. He wanted what he did to mean something in the world. And he wanted to have a lot of fun along the way. Microsoft told him that he would forego a huge chunk (20 percent!) of his $40 million share if he didn t remain at his former company, LinkExchange. So Page 2
3 after its acquisition, he took a risk and did what felt right. He quit. Then his quest for something truly awesome really began. When the idea for Zappos (a name deriving from zapatos, the Spanish word for shoes ) was pitched to him over the phone one day several years later, he almost deleted the message until he heard the stats. Intrigued by the business potential, he met with the company s founder, Nick Swinmurn, and decided immediately to invest. But that s all he decided. Though the company showed early promise, other investors were slowly backing out and, at first, Hsieh wasn t sure whether or not to follow. Little by little, though, his personal interest in the company grew. Eventually, he decided that he no longer wanted to invest smaller amounts of capital in a lot of different companies; instead, he wanted to fulfill his goal of having a single focus and a singular passion. Hsieh chose Zappos. His investment company had earned approximately $50 million, so he began putting that money toward Zappos, slowly pulling out of other assets. Then his involvement grew. He moved Zappos into one of his own San Francisco apartments a loft above his own home and joined the company full-time. The results weren t what he expected. In just two years, Hsieh had drained his investment fund com- Delivering Happiness is a book by Zappos CEO Tony Hsieh. It details his life as an entrepreneur, with emphasis on the founding of LinkExchange and Zappos. Page 3
4 pletely. And so he did what any truly passionate person would consider: he began dipping into his personal bank account to keep the company afloat. Eventually, Hsieh sold every property he owned except the one he lived in and the Zappos loft (formerly known as the party loft ). That s when the real risk-taking began. Only after nearly failing did Hsieh and his team realize that in order to dig themselves out of their hole, they would have to do something radically different. They d have to offer something that none of their competitors could. Zappos Family Core Values These are the ten core values that we live by: 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 Communication 7. Build a Positive Team and Family Spirit 8. Do More With Less 9. Be Passionate and Determined 10. Be Humble Hsieh says: Little did we know that this was actually a blessing in disguise... In 2003, we would decide to make customer service the focus of the company. This decision wasn t made out of the clear blue, of course; the focus had been there already. Just the year before, they had done away with the most profitable sector of the company, their drop-ship department. Due to logistics problems, customers were often disappointed in the availability of the drop-shipped products and the speed at which they received them. After chucking it completely, they were able to reach 70 percent of customers within two days by UPS ground. But when it came to improving their customer service, they still had a long way to go. Then something happened that changed everything: a loan from Wells Fargo Bank. No longer did they have to sit down every week, deciding which vendors to pay and which to put off. The company was saved. Now, for the first time, they were ready to become profitable and grow. Zappos was ready to become a legend. Soon after the Wells Fargo loan, Hsieh and his team decided that some changes were in order. First, they rethought their location. Believing the California culture prevented people from viewing customer service jobs as careers partly due to the high cost of living there they decided they needed a new home. While on a business trip to Las Vegas, they realized that Vegas would do just fine. Incredibly, 70 of their 90 employees decided to relocate with the company, a place some of them described as a family unit. Page 4
5 The changes didn t stop there. After they moved, the managers decided to take a hard look at the way they chose who to hire. To keep our culture strong, we wanted to make sure we only hired people who we would also enjoy hanging out with outside the office, Hsieh said. They also created The Zappos Culture Book, which features descriptions of the Zappos company culture in the words of the employees themselves. These changes were a calculated part of their overall corporate goal: to create their ideal company culture. We thought that if we got the company culture right, then building our brand to be about the very best customer service would happen naturally on its own, Hsieh said. That philosophy remains at the core of the company today and is responsible, Hsieh believes, for most if not all of their success. In July 2009, Amazon acquired Zappos for $1.2 billion. Though this decision meant that he would no longer have a controlling stake in the company, for Hsieh, it was a time of deep fulfillment the kind of fulfillment that he d been seeking for so long. At the all-hands meeting where the announcement was made, the company surprised each of the employees with a Kindle and a very large bonus. Hsieh recalls the moment: A lot of [the employees] had tears of happiness streaming down their faces. Just like we surprise many of our loyal repeat customers with upgrades to overnight shipping, we had just made our already happy employees even happier. It wasn t just about the Kindle or the bonus. Those were just... bonuses. The moment signified far more: We had found our path to profits, passion and purpose. We had found our path to delivering happiness. Page 5
6 Video: Engaging Customers in Sharing Feedback Your CEM initiative requires healthy participation levels by your customers. Here's how we ensure this happens. Video Talk To An Expert In the research phase of your CEM project? Talk to an expert no pressure and no strings attached. USA Europe Webinar: The Surprising Cause of Survey Fatigue You hear the term "Survey Fatigue" a lot, but its root causes are actually poorly understood. Listen to a recorded webinar, which brings together concepts from design to research on Asperger's Syndrome. Webinar Customerville USA Seattle Tel. +1 (206) info-usa@customerville.com 6042 Seaview Avenue NW Suite #101 View on Google Maps
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