5 things I learned by hanging at Zappos HQ that you can apply to your company

Zappos Front Desk

Zappos Front Desk

When you hear Zappos… you think service. Delivering happiness is actually the new mantra and there is also NO “customer service” department. There is however, a customer loyalty department tasked with the goal of creating happy customers who will go out and spread the Zappos word to the rest of the world.

Thanks to BlogWorld, the Zappos Insights team (@zapposinsights) and the Zappos Blog team / bus,  I had the opportunity of taking a tour of the Zappos HQ in Nevada with several other bloggers (@balanon, @bchesnutt, @wei_yang and others). This isn’t going to be a hip hip hooray post, but I’d like to discuss some things I’ve learned, what I plan to implement when I get back home and some other general thoughts about the company.

1. Companies are run (well or into the ground) by people.

The Zappos Shuttle picked us up

The Zappos Shuttle

I have a little supply chain background and definitely appreciate logistical advantages… which Zappos has. But companies are run by people. If you have bad people, you have a bad company. If you have good people, you could have a good company. One person can make a big difference. Zappos puts a great deal of focus on their people.

Front line hiring makes sure that the right folks are brought into the interview process and there are plenty of questions that focus around the company’s core values. How each candidate answers those questions is extremely important. We discussed one example of a candidate that had 16 – yes SIXTEEN – interviews before joining the Zappos team. Once you join the team, the folks in your department must all approve of you. In other words, YOU FIT THEIR CULTURE.

But wait! There’s more! Every employee goes through training and is then offered a bribe (my word not theirs) of $2,000. If Zappos isn’t for you, leave with $2,000 in your pocket. For Zappos, this is a small investment to avoid a bad seed working in their company.

  • A mere 1 to 2% of folks take the $2,000 to leave Zappos.

Now that’s all warm and fuzzy and we all know that joining a company with great core values gives you a burst of energy and enthusiasm, but what happens when that starts to dissipate over time? Each employee has a progression plan to document their horizontal and vertical growth. There are various coaches throughout the company and even a throne (literally) where you can sit and discuss your career progression. If you aren’t doing something you are passionate about, voice it and adjust. If it doesn’t exist, make it. There is even a company goal to have a very large percentage of the leadership team being “home grown” coming through the ranks at Zappos and not always sourced from the outside.

Another cool element… an employee bookshelf with tons of awesome books (Seth Godin, Jim Collins, Chris Brogan, etc) to read to further your personal development. Want one? Just take it with you…

2. Walk the talk and be authentic.

A Typical Zappos Office Space

A Typical Zappos Office Space

Making delivering happiness a tagline may get an extra customer or two. Saying it and meaning it is what creates strong customer bonds. Employees are empowered to do anything they can do to create an experience that may deliver happiness. There is even a budget for flowers and several great stories of customers dealing with tough times where Zappos has solved their issue and included flowers to show their appreciation.

A culture book is also compiled each year. Every Zappos employee shares what the company culture is doing for them – good, bad or ugly. The comments are not altered and are only edited for grammar or spelling. This is a direct indicator of what is going on in the company and allows management to read all the comments, pinpoint potential problem areas and try to identify ways to remedy any “unhappy” situations.

There is also a 360 evaluation – manager down and employee up – to get a good pulse of the work environment and additional skip meetings where a supervisor will bypass the manager to meet directly with the team and get feedback. These processes are in place to take care of their employees and to match their core values and value proposition.

3. Lead by example.

Henry poses as Tony Hsieh at his actual desk

Henry poses as Tony Hsieh at his actual desk

Tony Hsieh is a multi-millionaire. He had actually sold Link Exchange before starting Zappos for over $250 million. Now imagine what kind of office he would have. A huge corner suite. Tons of windows. Massive amounts of cool trinkets. Maybe even a putting green. A super expensive comfy office chair. An incredible view of the strip. Something akin to the sweet offices we’ve seen on television and in the movies right? Well Tony sits in a cube. Beside him is another executive. They are in the middle of the floor with everyone else.

When the holiday rush comes and millions of shoes are going out the door… who fields the calls? Every. Single. Employee. Including Tony Hsieh. Everyone has a mandatory four weeks of customer loyalty calls in their “initiation” and each holiday season, everyone is on the phone to keep and make customers happy.

4. Measure what matters or metrics are meaningless.

What are you measuring for your customer support or customer satisfaction success? Call time? Call quantity? Tickets opened? Tickets resolved? Response time? Are your metrics a true indication of customer satisfaction?

Zappos has a net promoter score (NPS) and a personal service level (PSL) for each rep. The goal is to identify if customers will shop again and spread the word and to see what percentage of time is spent with customers. Which with complex deduction (or just the ability to read), we can conclude that talking to customers for a longer amount of time increases your PSL.

We discussed several 7+ hour phone calls with some resulting in no sales. How would you react if one of your direct reports was on the phone for 7 hours and didn’t make a sale? What is the ROI on that? One thing that came up several times was that the most important part of the Zappos business is the unmeasurable. Sure, we need to be market focused and results driven, but creating an added value of great service from happy folks will surely have a positive correlation on the customer experience and their likelihood to spread your company’s gospel.

5. Word of Mouth is king – internally and externally.

Are you doing things to try to create word of mouth? Most folks focus on trying to get customers or potential customers talking (externally focused), but many folks neglect finding ways to get your own employees spreading the word of your company.

  • When Zappos asks “how did you hear about us?”  – the biggest response is friends and family.
  • 70-78% of their business is repeat customer business.

How are you changing the game? What is your purple cow? Are you innately trying to create an experience people will rave about? If not, I fear we have some meetings we need to schedule where we all work. I love what we do with Phonebooth and I think we are on the right track, but hanging out at Zappos was the shot in the arm I needed to try to make things even better.

As my friend Scott Stratten says, “people don’t spread meh.”

Let’s stop being so ordinary and corporate. Deal?

Update: We have some new information. :)

Shannon Smith

@EpicSkin Shannon Smith
@cnmoody Hi Chris… I went to @Zappos last week too. Enjoyed your post! BTW, they offer the “on the fence” employees $3K now! Woot!

Bonus Points

Zappos has a wall of fame for folks that accidentally hit reply-to-all on their emails… a joy that I also hold near and dear to my heart.

The Reply-to-all Wall of Fame
The Reply-to-all Wall of Fame

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Still not sure who wrote this post? I'm Chris Moody.

Comments

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  7. Thanks for sharing, Chris. Someday I hope to make it out to Zappos HQ for the tour – sounds like a magical place, especially for a Community Manager.

    I especially appreciate you pointing out the net promoter score and personal service level (PSL) for each rep. While I agree with the sentiment of “the most important thing is whether customers are happy” I think metric-less work is dangerous. I’m glad to hear that although the focus is still on making customers happy, there are *some* metrics at work in Zappos. Interesting that Tony didn’t point this out in his book (if I remember correctly).

    Reply
    • I completely agree. While the most important element of what makes a company stand out may be the “immeasurable”… there have to be some metrics that indicate performance and give you a baseline to improve upon.

      How are things on your side of the US these days?

      Reply
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