Zappos' unique approach to communications and customer service is helping to form influential relationships and drive growth.
Dedication to customer service has helped Zappos grow into a $1 billion online retail business, and CEO Tony Hsieh is happy to show anyone the unique corporate culture behind that success. In fact, he has issued a standing invitation to the general public to come to Zappos' Las Vegas office to witness that culture firsthand. There's even a Zappos bus that shuttles people from the airport, hotels, and other places around town to the office for a tour and back.
“Some days we have 50 tours,” Hsieh says. “A lot of people have heard of Zappos, but not until the tour do they see how our culture is so unique and different, and how that drives branding and customer service. Our culture is ultimately what our brand is about.”
Office tourists will see whatever is going on at the time, from Valentine's Day singing grams, to “random acts of kindness” staff parades, to marshmallow eating contests.
Zappos launched in 1999, selling only shoes. By 2001, gross sales had reached $8.6 million. That number nearly quadrupled to $32 million in 2002 and continued to grow before soaring to more than $1 billion last year. Product offerings also expanded; Zappos currently carries more than 1,300 brands and 2 million total products, including handbags, clothes, housewares, electronics, and jewelry.
“When we started, we knew customer service was important, but it wasn't the focus for the first few years,” notes Hsieh. “Once we made that transition, employees were more engaged and passionate.”
A recent Chief Marketing Officer Council survey of 480 executives (“Giving Customer Voice More Volume”) reveals that marketers agree that customer experience and word of mouth are critical to business performance. Yet only 31% report a high level of commitment to listening to customers, and 39% say they've increased personalization and intimacy in their customer communications.
All 1,400 employees are focused on ensuring positive customer experience. Zappos has an in-house marketing team that handles direct and brand marketing, and Kel & Partners was hired in December as PR AOR. A call center staff of about 370 mans the front lines of customer communication 24/7, answering more than 5,000 calls a day.
Hsieh explains that every Zappos employee is empowered to communicate with the public. All new staffers, regardless of department, are required to train working the phones for two weeks.
“Our philosophy is [communications] comes from everyone and it's driven by company culture,” he says. “If you get the culture right, other stuff like great customer service or building a long-term brand will happen on its own.”
As employees are key to Zappos' success, it has unique hiring and retention tactics. For example, all staff in training are offered $2,000 to quit at any time, something less than 1% accepted last year.
Blogs and videos have been great tools in helping Zappos share its unique culture with customers. Topics run the gamut from personal interest (family vacation spots and recipes), to office news (events and department moves), to industry news (designers cutting costs at Fashion Week and fashion trends).
Zappos also has Facebook and MySpace pages, while Hsieh is especially passionate about Twitter. (On February 20, he had more than 109,000 followers, and follows 112,000 other users. He has updated the account over 1,500 times). All staffers are introduced to Twitter in their training, and more than 400 are active on the site, interacting with each other and customers.
Hsieh Tweets about seemingly everything he does – from what he's reading and eating to presenting at an employee engagement conference with holes in his shirt. Yet, he's very careful about labeling Zappos' use of the microblogging tool.
“It's not a social media strategy,” Hsieh says. “The best way to provide customer service is to form relationships – with each other and with customers. The number-one way [we form customer relationships] is by phone. Our 800 number is on top of all our [Web] pages. We want to talk to all our customers.”
The door is always open
The company's openness to forming relationships extends to other businesses via ZapposInsights.com, a membership site where business owners can get advice from Zappos.
“A lot of private companies feel they need to guard the secret sauce,” says Aaron Magness, who is in charge of business development, brand marketing, PR, and video blogs at Zappos. “We're very open to talking about our business model and plans with everyone. We've learned a lot along the way and made mistakes that a lot of other companies don't need to make.”
Zappos is spreading the word about ZapposInsights.com right now, and Magness says communicating about expanded product offerings (particularly clothing) will be a main focus this year.
“We're changing the message from being all about shoes to telling customers that we are more than that,” he explains.
While Hsieh is much quoted by the media, he prefers to communicate directly with people.
“[My accessibility is] not specific to the media,” he says. “All Zappos' representatives are told to give out my e-mail if anyone wants to talk to me. It's usually easy to get a hold of me no matter who you are. Communication and relationships are part of my job. I sit in a cubicle just like everyone else here. The best way to have an open-door policy is to not have a door in the first place.”
By the numbers
2008 sales: More than $1 billion
2008 call volume: 1.7 million
Total employees: 1,400
Zappos.com traffic: About 700,000 visits/day
Number of customers: Approximately 10 million
Hsieh's Twitter followers: 109,000 (as of February 20)
Employees on Twitter: 440
Facebook friends: 9,000
YouTube videos: Inside Zappos + Zappos.TV Channel = 426
This story appears in print as "A perfect fit"