April 03, 2009
Zappos on Core Values
This week I heard Tony Hsieh of Zappos speak about their corporate culture to a group of 450 small to mid-sized business owners.
In tech circles, Zappos has been a sterling example of a consumer-facing company that has used social media right early on and attracted an ongoing passionate fan-base. While some still think of them as a "shoe company," most now know that they have moved into clothing, handbags, eyeware, watches and other products. Their mission became "providing the best service." The Zappos brand today is about the best service and customer experience.
Tony looks to Virgin for inspiration. He says, "the Virgin brand is more about being hip and cool, but we just want to be about the best customer service and great corporate culture." Instead of putting money into advertising, they put it into customer service above and beyond, such as a 24/7 call center and free shipping for returns.
One of my pet peeves: most websites make it really hard to find a phone number to call. How many people experience the same frustration? Zappos' actually wants to talk to their customers.
Advertising and brand people ask Tony all the time, “how do you build your brand amidst all the noise?” "The telephone is one of the best device out there," says Tony. "If you get the interaction right, they’re going to remember it for a long time."
Each customer contacts them at least one time by their phone and their goal is to make it a very memorable experience instead of simply cutting costs on the call center level. After pushing the buy button is where they really differentiate themselves. Tony explains how.
They offer fast accurate fulfillment and most of their customers get aha 'surprise' moments throughout the buying process, such as a free upgrade to overnight shipping. Suddenly there's a WOW moment they didn't expect.
If they don't have the product in stock, they direct customers to competitors websites. They look at three other competitors websites and then redirect them so the customer can buy instantly.
The result: immediate satisfation and who created that satisfaction for them? You betcha: Zappos. They may lose that transaction but their win is customer loyalty. They are trying to build a long term relationship with that customer........over a lifetime.
“We encourage reps to use their personality to really shine and connect with their customers," says Tony. "We want them to develop personal emotional connections one at a time." Because of that philosophy, they don’t upsell or have caller time restrictions.
Tony believes that if they have the right corporate culture in place, everything else will follow. This starts with their initial interview with a candidate. Interviews and performance reviews are 50% based on core values and cultural fit. Twitter also helps build company culture and every employee goes through their call center ritual, which involves taking calls from customers for two weeks.
Says Tony, “if we’re serious about our brand being about customer service, then every employee needs to have that training. At the end of the first week, we make everyone an offer. We will pay you for the time you’ve worked with us up until four weeks and then $2K if you leave right now."
This weans out the people who are not serious about working with them. If you think about it, $2K is a lot of money when compared to a call center salary which can be around $11 an hour. If they give up that $2K, then they’re that much more committed to the company long-term.
He asks the 450 in the room who is on Twitter and roughly a dozen of us raise our hands. It's a non-tech crowd and most are selling their products and services in an offline world.
Their Core Values:
- Deliver WOW through service
- Embrace and drive change
- Create fun and a little weirdness (on a scale of 1-10, how weird are you?)
- Be adventurous, creative and open-minded
- Pursue growth and learning
- Build open and honest relationships with communications
- Build a positive team and family spirit
- Do More with Less
- Be passionate and determined
- Be Humble
Step one he suggests is to decide whether you're about short term or long term - do you want to build a long term sustainable brand? It's an important question and one of the first things I ask clients. It's better to figure that out as early as possible in the game.
It requires more patience to lay that foundation. Secondly, says Tony, "figure out your values and culture and your personal core values. It doesn't matter what the values are as long as they are in alignment. And then, LIVE the brand."
They don’t restrict press when they come to their offices. "When everyone’s values are aligned," says Tony, "why worry about the press?" It's one thing you can do to commit to transparency. They have a newsletter called Ask Anything encouraging employees to send in what's on their mind.
Tony encourages companies to think bigger. Regarding vision he says: "whatever you’re thinking, think bigger. Does the vision have meaning? Chase the vision, not the money. What is the larger vision beyond profits? There’s a bit difference between motivation and inspiration – tie core values to something that employees believe in. This is much more compelling than incentives."
And then the core....build relationships. This is key for companies who really want to build a sustainable brand that is around for a long time. This is for people who don't want to flip their company; they want to build it.
Some of these core values are tied to what the best customer service and sales reps have been doing for years, such as being interested rather than being interesting.
Hear hear Tony. Every time I walk into a room, I have this thought: if I dig deep enough and look hard enough, there’s something interesting about everyone I will meet here.
In trying to recruit partners, I find that the creators more often than not want to go it alone. I love this quote which is a great reminder to focus on the long-term.
“If you want to go quickly, go alone” “If you want to go further, go together” Al Gore quoting an African proverb at the Inaugeration
I love the fact that Tony really honed in on executives personal motivation in life first and foremost. It's amazing how few people know what their goal is in life.
When you keep pushing for more clarity, very often get it. "Why do you want that?" Once you have the answer, ask again, "why do you want that and what will that give you?"
If you think about it, people are very bad at predicting what will bring them sustained happiness. "There's a science behind many aspects of business," reminds Tony, "there's also a science behind happiness." Imagine if we spent more time focusing on that science than all the other clutter in our lives.
"Happiness is about four key things," suggests Tony.
- Perceived Control
- Perceived Progress
- Vision / Meaning (being part of something bigger than yourself)
Bottom line: apply all of them to your business, your customers and partners.
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How wonderfully quaint- the telephone is NOT dead! And it takes so much less time, there are many fewer glitches in communications- what's not to love? What? Real relationship? Glad to hear it from Tony, too!
Posted by: Sharon | Apr 4, 2009 2:32:49 PM