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.