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Zappos bai - lv - 101021



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  • 1. Building a Brand that Matters with Clothing, Customer Service and Culture Aaron Magness – Sr. Director - Brand Marketing & Business Development BAI Retail Delivery October 21, 2010
  • 2. Who is this Aaron character?• Work • Play – Sold trade show space – Family/Friends – Business Development for Williams- – Athletics Sonoma, Inc – Music – Business Development & Marketing for – Marathons (completed 8 so far) – Triathlon (Escape from Alcatraz) – Poker 2
  • 3. Corporate Background at a Glance, Inc. is a service Best selection company that • Over 1,000 happens to sell is brands, over clothing, “Powered by 200,000 styles, handbags, Service” over 900,000 shoes, unique UPCs. accessories, • Providing the 1700 employees best online • 5 million items in housewares, …. (half in NV, half in shopping warehouse KY) experience • 100% of products • #23 in FORTUNE possible. inventoried (no MAGAZINE’s “100 • Fast, Free drop ship). Best Companies Shipping. Free To Work For” 2009 return shipping. Founded in 365-day return • Highest debut 1999 policy. for a newcomer in 2009 • Fast fulfillment. • #15 in FORTUNE Expedited MAGAZINE’s “100 delivery. Fast, Best Companies friendly & expert To Work For” customer service. 2010 3
  • 4. Customer service value proposition in action… Committed to WOW’ing every customer Customers come Customers come Customers come… back, order more and back… order more often… On any given day, Repeat customers Over 10 million total about 75% of have higher average purchasing customers purchases from order size returning customers $123.86 – first time customers in Q407 Over 4 million have Repeat customers purchased in the last order >2.5x in the $156.27 – returning 12 months next 12 months customer in Q407 4
  • 5. Power of repeat customers and word of mouth... $1,000 $800Gross Sales $Ms $600 $400 $200 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Gross Sales 1.6 8.6 32 70 184 370 597 841 1014 5
  • 6. Recent Recognition: Nice, but we pay more attention to our customers• TV Stories – Oprah – ABC Nightline – 60 Minutes• Fortune “100 Best Companies to Work For” – #23 (2009) – Highest ranking newcomer to list – #15 (2010) – Moved up 8 spots!• Fast Company “50 Most Innovative Companies” – #20 (2009)• BusinessWeek Top 25 “Customer Service Champs” – #7 (2009)• STELLAService – #1 (2010)• NRF Customer Choice Awareds – #3 (2008) – #3 (2009)
  • 7. 3 fundamental things we’ve learned are necessary for WOW service online: What What What We Customers Customers Do See First Experience Internally 7
  • 8. Customer Service: What customers see first• 24/7 1-800 number on every page• Free shipping• Free return shipping• 365-day return policy 8
  • 9. Customer Service: What customers experience• Fast, accurate fulfillment• Most customers are “surprise”-upgraded to overnight shipping • Create WOW• Friendly, helpful “above and beyond” customer service• Occasionally direct customers to competitors’ web sites 9
  • 10. Customer Service: What is done internally• No call times • The telephone is one of the best branding devices available• No sales-based performance goals for reps• Run warehouse 24/7• Inventory all product (no drop-shipping)• 5 weeks of culture, core values, customer service, and warehouse training for everyone in Las Vegas office• We’ll pay you $2000 to quit• Culture Book• Interviews & performance reviews are 50% based on core values & culture fit• Twitter/Facebook/YouTube/Blogs help build company culture 10
  • 11. Owning the 3 C’s ClothingCustomer Service Culture
  • 12. Clothing
  • 13. Customer Service
  • 14. Culture
  • 15. Owning the 3 C’s:Clothing, Customer Service, Culture Culture Customer Service Clothing
  • 16. Delivering Happiness (customers, employees and shareholders)“People will forget what you said, people will forgetwhat you did, but people will never forget how youmade them feel.“ --Maya Angelou
  • 17. CULTURE“Committable Core Values”
  • 18., Inc’s Core Values1. Deliver WOW Through Service2. Embrace and Drive Change3. Create Fun and a Little Weirdness4. Be Adventurous, Creative, and Open-Minded5. Pursue Growth and Learning6. Build Open and Honest Relationships With Communication7. Build a Positive Team and Family Spirit8. Do More with Less9. Be Passionate and Determined10. Be Humble
  • 19. “That’s great for YOU but it would never work at my company…”
  • 20. It doesn’t matter what your core values are…as long as you commit to them. ALIGNMENT
  • 21. How does one do that?1. DECIDE what kind of brand you want to build2. Figure out VALUES & CULTURE3. Commit to TRANSPARENCY4. Have a VISION5. Build real RELATIONSHIPS6. Build your TEAM7. Think LONG Term 21
  • 22. Step #1 DECIDE• Decide if you’re trying to build a long term sustainable brand• Requires more patience with revenues & profits in order to lay the foundation• Decide sooner rather than later 22
  • 24. VALUES & CULTURE Figure out values & culture sooner rather than later• What are your PERSONAL core values?• What are the COMPANY’S core values?• Start EARLY.• It is surprisingly HARDER than you think.• It doesn’t MATTER what the values are.• The most important thing is ALIGNMENT.• …LIVE the BRAND 24
  • 25. Step #3COMMIT TO “Be real and you have nothing to fear” Your culture is your brand Don’t try to be someone you are not 25
  • 26. Commitment to Transparency: Examples • • “Ask Anything” newsletter • Extranet for vendors • Tours & reporter visits • 26
  • 27. Transparency Tools 27
  • 28. Get your partners involved! 28
  • 29. Transparency Tools Zappos.TV 29
  • 30. Transparency Tools Facebook Page 30
  • 31. Transparency Tools Facebook Page 31
  • 32. What does a Snuggie have to do with nothing, but it has everything to do with an engagement opportunity! 32
  • 33. Step #4 VISION“Whatever you’re thinking, think bigger.” Does the vision have meaning? Chase the vision, not the money… 33
  • 34. ENTREPRENEURS: “What would you bepassionate about doing for10 years even if you never made a dime?” 34
  • 35. EMPLOYEES:What’s the larger vision and greater purpose in their work beyond money or profits? 35
  • 37. Step #5 BUILD RELATIONSHIPS (not networking or marketing)Be INTERESTED rather than trying to be INTERESTING 37
  • 38. Step #6BUILD YOUR TEAM“If you want to go quickly, go alone. If you want to go far, go together.” (African proverb) Hire slowly Fire quickly 38
  • 39. Step #7 THINK LONG TERM Repeat customers Customer service There is no “get rich quick” formula“Overnight” successes are years in the making (both personally and in business) 39
  • 40. some links to check out… • (public mentions, employees) • “How Twitter Can Make You a Better (And Happier) Person” • (photos & videos of culture) • (more information about us & core values) • (job opportunities) 40
  • 41. 42
  • 42. Thank you for allowing me to be here! Email for a copy of this presentation or a copy of the Culture Book (it’s a physical book, so I need a physical address). 43
  • 43. Legal and Financial Disclaimer P.S. You might be wondering why we need to have a legal and financial disclaimer in this presentation, but you are still reading, so our lawyers, auditors and accountants would really like to make sure we make the following clarifications. Although an audit was underway and almost done, the financial information presented in this slide show was unaudited. We made every effort to present the best information we had at the time. Gross merchandise sales is a non-GAAP metric. We use it to express the total demand across all of our web sites and stores. This number measures the dollar value of the orders placed in the year before accruing for certain items such as returns, and it ignores certain timing cut-offs that are required by GAAP for revenue recognition purposes. If we were a public company, we would have to reconcile gross merchandise sales to the nearest GAAP metric (net sales), but we are currently a private company so the gross merchandise sales number should be viewed just as an interesting number that we want to share with our friends. This presentation contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by the forward-looking statements and assumptions. These risks and uncertainties include, but are not limited to, the risk of economic slowdown, the risk of over or underbuying, the risk of consumers not shopping online or at our web site at the rate we expected, the risk of supplier shortages, the risk of new or growing competition, the risk of a natural or some other type of disaster affecting our fulfillment operations or web servers, and the risk of the world generally coming to an end. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. assumes no obligation and does not intend to update these forward-looking statements. Congratulations on making it through all the fine print. 44