Why focusing on customer
experience is probably the
best ever viral strategy
Z a p p o s B us i ne s s Ca s e
mardi, 4 août 2009

Tony Hsieh, 34 years old
(pronounce shay)
mardi, 4 août 2009

Zappos birth
Tony hsieh almost deleted the mail he received from the founder of
this shoe internet startup who asked him to fund his company;
because selling shoes online sounded silly...
Until he noticed that «catalog sales» represented around 4% of a total
market of 40 billion dollars
He invested 500‘000$ in the company and because of the challenge
this company represented and the good results they were making,
started to jump on board
mardi, 4 août 2009

Zappos brand
The company had started in 1999. He joined in 2000 when the
turnover was 1.6$ million. In 2008, they hit 850$million with a unique
culture
Tony created a company in which he would be proud to go to
work everyday
He thought that making customer happy was the best ever
marketing tactic and that instead of investing in adverstising,
he would devote all his budget efforts to create the best ever
customer experience
mardi, 4 août 2009

Because happy customers having
had a unique experience repeat
buying and eventually advocate
‣They provide free shipping both ways 365 days
return
‣Whenever possible upgrade to free overnight
shipping (get your parcel 8hours after order)
‣Only show products they have on stock
‣Find products and refer at competitors when out
of stock
‣Work 24/7
mardi, 4 août 2009

Because you can’t ask your employees
to care about your customer if you do
not care about them first, they
showed they cared
‣Free food and snacks
‣100% medical insurance & dentist
mardi, 4 août 2009

Because brand are about culture they
cared to make sure people would fit
into that culture
‣This drive the recruitment process (hiring
interview, training)
‣This also drives the assessment process :
50% of people’s review is based on culture
‣Make sure people stay for culture and not
money : 2000$ cash if you leave
mardi, 4 août 2009

Because they cared to take any
opportunity to talk to their
customers
‣No time limit on phones (call center
metrics on customer satisfaction, not
numbers)
‣They published the 800 direct numbers on
their website
‣Take advantages of all given opportunities
to talk to customers and be helpful to them
mardi, 4 août 2009

Because they want a long term
relationship and not short term profits
‣They don’t try to maximize all of their
actions by reducing the time they spend, or
the efforts they give
‣They persue exceeding expectations
services, including when they cannot help
directly : deliver WOW
mardi, 4 août 2009

How unique is this ?
mardi, 4 août 2009

So unique that from initial
footwear delivery
customers have asked
them more (clothes,
accessories, cookwear...)
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Zappos is a service
company offering
exceeding expectation
level of service
mardi, 4 août 2009

They don’t outsource because
you cannot give such service
when outsourcing
They were bought this year by
amazon for 920 million dollars
mardi, 4 août 2009

Sources and more info on :
‣Crunchbase : company description http://www.crunchbase.com/company/zappos
and Inc. http://www.inc.com/magazine/20060901/hidi-hsieh.html
‣Slideshare : values of Zappos http://www.slideshare.net/krianbalma/zappos-pg-
presentation-82008-presentation
‣Article : why Zappos continue growth in economic downturn http://
knowledge.wpcarey.asu.edu/article.cfm?articleid=1736
‣Youtube :
‣Video at web 2.0 summit http://www.youtube.com/watch?v=JQ2DmNk3YjQ
‣Video by nightline http://www.youtube.com/watch?v=tFyW5s_7ZWc
‣Video at SXSWi http://www.youtube.com/watch?v=63WFjoFiXns
mardi, 4 août 2009