BiF-4 Insights – Tony Hsieh – Zappos.com

We have a Kentucky warehouse with 4 million pairs of shoes.

Importance of striking an emotional connection with customers.

Tony started LinkExchange before selling it to Microsoft:

  • Sold it because it went from five people to 100 people
  • Hired people without the thought of cultural fit
  • After the sale, formed an investment fund and invested in 20 companies including Zappos.com

Now we have 9 million customers and a focus on having the best customer service:

  • We sell clothing, handbags, and electronics now
  • We also look at Virgin for inspiration
  • We give a lot of customers free upgrades to overnight shipping
  • Our number one growth driver is repeat sales and word-of-mouth (WOM)
  • We want to talk to our customers (we put an 800# on all of our web pages)
  • We run our warehouse 24/7 to maximize speed even though it is not the most cost effective way to operate it
  • We are focused on building lifelong relationships, not on maximizing transactions

Our number one priority is not customer service, it’s company culture:

  • No call scripts, we hire well and trust our employees to serve the customers
  • Get the culture right to better control brand and customer service rather than planning every process
  • Treat customers like people (funeral and flowers story)
  • We do two different sets of interviews
    • Hiring manager and team
    • HR team does culture fit interview
    • Have to pass both interviews

  • We will also fire people if they are harming the culture
  • Everybody goes through the same four weeks of training, then weeks on the phone and one week in the warehouse in Kentucky
    • We have even fired people during training

Story about customer purchasing a wallet, trying it, and returning it:

  • The person left $150 in the wallet when they returned it
  • The person had been blaming their kids for the $150 disappearing
  • Warehouse worker sent letter to customer about the $150
  • Woman was very grateful and stopped thinking her kids took it

Core Values should be things you are willing to commit to, including your hire/fire decisions.

For more information on the talk, go here.

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Braden Kelley

Braden Kelley is a Design Thinking, Innovation and Transformation Consultant, a popular innovation speaker and workshop leader, and helps companies plan organizational changes that are more human and less overwhelming. He is the author of Charting Change from Palgrave Macmillan and Stoking Your Innovation Bonfire from John Wiley & Sons. Braden has been advising companies since 1996, while living and working in England, Germany, and the United States. Braden earned his MBA from top-rated London Business School. Follow him on Twitter and Linkedin.

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