Here’s an interview with Zappos CEO, Tony Hsieh. Zappos is the world’s largest online shoe outlet who generated $1 billion in sales in 2009. More than 75% of that was repeat business.
Zappos is a company that sells full price shoes. Shoes that people can buy anywhere else. No competitive product advantage whatsoever.
Hsieh puts his success down to putting the vast majority of his marketing and advertising spend into his customer service. That has created customer loyalty and word of mouth that every business would die for.
Here’s his take on building a billion dollar business…
1. Build a true customer service oriented culture…
Zappo Employees are interviewed for both technical job skills and their aptitude for customer service. That goes for every single employee.
Employees are paid to quit! At the end of their first week, every trainee is offered 2,000 dollars to quit. If they quit, they are obviously not the right fit. If they stay, they are.
2. Put your money where your customers are…
Hsieh takes the vast majority of his marketing and advertising spend and puts it into his customer service.
Zappos offer free shipping, both ways. A 365 day return policy. And for loyal customers, ‘surprise’ upgrades to express shipping.
3. Build a website for your customers, not for your product…
There’s no fancy flash banners on the Zappos site. No advertising, just reminders of their dedication to customers. Shopping basket abandonment is not an issue. Everything is focused on making the most useable, clean customer experience possible. Their website loads in .0879 seconds. They clearly display an 0800 contact number. Constantly. Everywhere. Customers can chat live 24-7. There is always someone there to help. It is all about the customer.
4. Treat your customers as friends. Real friends…
Instead of devising points or loyalty programs, Zappos just think: “what would I do with my actual friends?”
5. Extend your philosophy to your vendors…
Zappos do not consider vendor/supplier relationships as a zero sum game. They share markdowns, sales figures, operating costs. And find a mutually beneficial arrangement.
Finally, some food for thought…
Zappos sells shoes.
But actually they don’t.
They sell customer service.
Which creates incredible word of mouth.
Which is worth a billion dollars.
That’s a lot of food for thought.
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