Zappos lessons: Building a Customer-Focused Culture

Building a Customer-Focused Culture Tony Hsieh CEO

Zappos at a Glance
Founded in 1999
Zappos is powered by service
Providing the best service and online shopping experience possible.
Free shipping both ways. 365-day return policy.
Fast fulfillment. Expedited delivery. Fast, friendly & expert customer service.
Best selection
Over 1100 brands.
Over 150,000 styles.
Over 800,000 unique UPCs.
3 million pairs of shoes.
Photographed in multiple angles.
100% of products inventoried (no drop ship).
Zappos is a service company that happens to sell shoes, clothing, handbags, eyewear, watches (and eventually a bunch of other stuff).

Customer service value proposition in action…
Zappos is committed to WOWing each and every customer.
Customers come…
7.4M total purchasing customers (about 2.5% of US population)
3.3M have purchased in the last 12 months
Customers come back…
On any given day, about 75% of purchases from returning customers
Repeat customers order >2.5x in the next 12 months
Customers come back, order more and order more often…
Repeat customers have higher average order size
$111.98 – first time customers in Q406
$143.22 – returning customer in Q406

Word of mouth in action…
Word of mouth enhances marketing investment significantly
Advertising spending…
85% Internet
15% Print
New customers acquired heard about Zappos…
44% from Internet
43% from word of mouth
13% from other

Power of Repeat Customers & Word of Mouth

What is customer service?

Customer Service: What Customers First See
24/7 1-800 number on every page
Free shipping both ways
365-day return policy

Customer Service: What Customers Experience
Fast, Accurate Fulfillment
Friendly, helpful “above and beyond” customer service
Refer customers to competitors’ web sites

Customer Service: What We Do Internally
No call times
No sales-based performance goals for reps
Run warehouse 24/7
Inventory all product (no drop-ship)
5 weeks of culture, core values, customer service, and warehouse training for everyone in Las Vegas
Culture book
Interviews and performance reviews are 50% based on core values and culture fit

10 TIPS for building a service-focused culture

TIP #1 Commit to customer service. Make it part of your mission. It’s not just a department… Be true to your mission when making hard (or easy) decisions.

Zappos.com Mission
To Live and Deliver WOW
Internally, we have a saying:
We are a service company that happens to sell _____________________.
shoes
and handbags
and clothing
and eyewear
and watches
and accessories
(and eventually a bunch of other stuff)

TIP #2 Come up with committable core values. Do some soul searching. Don’t come up with core values just because they sound good.

Zappos Core Values
Deliver WOW Through Service
Embrace and Drive Change
Create Fun and a Little Weirdness
Be Adventurous, Creative, and Open-Minded
Pursue Growth and Learning
Build Open and Honest Relationships With Communication
Build a Positive Team and Family Spirit
Do More with Less
Be Passionate and Determined
Be Humble

TIP #3 Actively manage your culture based on your core values … … for every single department.

TIP #4 Make “WOW” part of your company’s everyday vocabulary.

TIP #5 Remember that customer service is an investment … … not an expense. Don’t hide your 1-800 number. Don’t measure call times.

TIP #6 Trust and empower your customer service team. Find people that are passionate about customer service.

TIP #7 Create a culture book.

TIP #8 Give great service to everyone: Customers Employees Vendors Investors

TIP #9 Make culture part of everyone’s performance review.

TIP #10 Have the entire company celebrate great service. Tell stories.

Q&A
Email me -- [email_address] for:
Answers to any additional questions not answered today
A copy of our culture book
Tour of our offices when you’re next in Vegas
Job opportunities

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Zappos lessons: Building a Customer-Focused Culture

by Thor on Feb 06, 2008

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Zappos lessons: Building a Customer-Focused Culture — Presentation Transcript