Word of Mouth Marketing Summit 2008: Zappos’ Case For Customer Experience as a Core Competency
I had the pleasure of attending Zappos CEO, Tony Hsieh’s keynote speech at the 2008 Word of Mouth Marketing Summit in Las Vegas last Thursday. Zappos is a company that’s renown for their customer service. Tony spent an hour sharing his thoughts on why their customer service rocks and why word of mouth for them is so positive.
Here’s a hint… it has nothing to do with blogging, social media, or Twitter. In fact, it has nothing to doing with even *creating* word of mouth.
Founded in 1999, Zappos is the biggest online shoe store with over $1 billion in sales projected for 2008. But if you asked Tony – or any Zappos employee for that matter – to describe the company, they would tell you that Zappos is a customer service company that just happens to sell shoes.
Personally, I love this perspective and believe that the CEOs of many airlines and financial services firms should be listening and learning from the Zappos story. The main reason I say that is because I believe they are also customer service companies… but, in many cases, haven’t realized it yet.
Company Culture
Zappos employs about 1500 people. Tony stressed how important it is for every emlpoyee to feel like they have a stake in the culture. As a result, they’ve defined a set of core values that help keep them focused on the right things:
- Deliver “WOW” through service.
- Embrace and drive change.
- Create fun and a little weirdness.
- Be adventurous, creative, and open-minded.
- Pursue growth and learning.
- Build open and honest relationships with communication.
- Build a positive team and family spirit.
- Do more with less.
- Be passionate and determined.
- Be humble.
- No call times, no sales-based performance goals for reps
- Run warehouse 24/7
- Inventory all product (no drop-ship)
- 5 weeks of culture, core values, customer service, and warehouse training for everyone in Las Vegas
- Annual “culture” book that features stories from all of their employees
- Interviews and performance reviews are 50% based on core values and culture fit
The focus on culture results in customers experiencing something that looks a little like this:
- Fast, accurate fulfillment
- Most customers are “surprise”-updgraded to overnight shipping
- Friendly, helpful “above and beyond” customer service
- Occasionally direct customers to competitors’ web sites if stock turns out to be an issue
- 24/7 1-800 number of every page
- Free shipping
- Free return shipping
- 365-day return policy
Tony shared four specific pieces of advice for the marketers in attendance at last week’s WOM marketing summit:
- Chase the vision, not the money… “Whatever you’re thinking, think bigger.”
- Repeat customers are the lifeblood… “Great product, great service or low prices – choose and focus on 2 of the 3).”
- Transparency… “Be real, and you have nothing to fear.”
- Culture… “Create committable core values.”
If you’re focused on how to *create* word of mouth marketing, you’re focused on the wrong thing. What it takes to pull off positive word of mouth is so much bigger than how most marketers think about it. Great product and great service are fine places to start – but it takes a great company culture plus vision and committment to make it all come together to result in positive word of mouth.
Last 5 posts by Scott Weisbrod
- Weekly Points of Interest – February 5th, 2010
- My Take on the Apple iPad – January 28th, 2010
- Four Lessons from Starbucks: A Brand on a Mission – January 25th, 2010
- Weekly Points of Interest – February 22nd, 2009
- Weekly Points of Interest – January 26th, 2009
[...] Experience Matters posted a summary of Zappos CEO Tony Hsieh’s 2008 WOM Marketing Summit speech on how is company excels in customer service and how word-of-mouth works for them. Reading through the list of core company [...]
[...] for real business examples, look no further than the Zappos Case. Widely known for “digital humanism”, CEO Tony Hsieh would tell you their success has [...]
I completely agree with the Zappos strategy. WOM is created when a brand is able to provide consumers with a benefit, whether it’s from the brand directly or from an activity or event that a brand sponsors. The focus of a company should be on that benefit they offer and not the WOM that might come as a result.
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Caitlin…
kinda makes you wonder….