Zappos lessons: Building a Customer-Focused Culture

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Tony Hsieh, CEO of Zappos, provides his 10 tips for building a customer service focused culture.

Tony Hsieh, CEO of Zappos, provides his 10 tips for building a customer service focused culture.

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  • Simply awesome!
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  • Tony Hsieh is a remarkable guy. He seems like an introvert, somebody whose mind is constantly processing multiple ideas and figuring out innovative solutions that would further the Zappos empire. And yet, at the end of it all, this man weighs his achievements on 2 parameters - values and culture. I like the way his leadership style is analysed here -
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  • A very good example of customer centric organization and how you can get the commitmento of your employees. Goog Work!
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  • Zappos' culture is what I describe in my writing, speaking and teaching as a Connection Culture. It motivates employees to give their best efforts and align their behavior with organizational goals because it connects emotionally and rationally via aspects of identity, empathy and understanding. Recent Corporate Executive Board research shows that 90% of employees today are either not engaged or aligned with the business so what Zappos is doing is important. I would go as far as to say that the future evolution of corporate culture is on display today at organizations such as Zappos, HCL and Google.

    Michael Lee Stallard
    Author of Fired Up or Burned Out: How to Reignite Your Team’s Passion, Creativity and Productivity
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  • Tony this was the best presentation at the Inc 500 awards. thank you for sharing this info. its a very important part of what we are doing at MediaTrust. technology and cultural innovation are very power full hand in hand. this is a must read by all.

    Peter Bordes
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  • 1. Building a Customer-Focused Culture Tony Hsieh CEO
  • 2. 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).
  • 3. 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
  • 4. 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
  • 5. Power of Repeat Customers & Word of Mouth
  • 6. What is customer service?
  • 7. Customer Service: What Customers First See
      • 24/7 1-800 number on every page
      • Free shipping both ways
      • 365-day return policy
  • 8. Customer Service: What Customers Experience
      • Fast, Accurate Fulfillment
      • Friendly, helpful “above and beyond” customer service
      • Refer customers to competitors’ web sites
  • 9. 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. 10 TIPS for building a service-focused culture
  • 11. 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.
  • 12. 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)
  • 13. TIP #2 Come up with committable core values. Do some soul searching. Don’t come up with core values just because they sound good.
  • 14. 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
  • 15. TIP #3 Actively manage your culture based on your core values … … for every single department.
  • 16. TIP #4 Make “WOW” part of your company’s everyday vocabulary.
  • 17. TIP #5 Remember that customer service is an investment … … not an expense. Don’t hide your 1-800 number. Don’t measure call times.
  • 18. TIP #6 Trust and empower your customer service team. Find people that are passionate about customer service.
  • 19. TIP #7 Create a culture book.
  • 20. TIP #8 Give great service to everyone: Customers Employees Vendors Investors
  • 21. TIP #9 Make culture part of everyone’s performance review.
  • 22. TIP #10 Have the entire company celebrate great service. Tell stories.
  • 23.  
  • 24.  
  • 25. 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
  • 26.