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Slide 1: Building a Customer-Focused Culture Tony Hsieh CEO
Slide 2: Zappos at a Glance • Founded in 1999 • Zappos is powered by service • Providing the best service and online shopping experience possible. • Free shipping both ways. 365-day return policy. • Fast fulfillment. Expedited delivery. Fast, friendly & expert customer service. • Best selection • Over 1100 brands. • Over 150,000 styles. • Over 800,000 unique UPCs. • 3 million pairs of shoes. • Photographed in multiple angles. • 100% of products inventoried (no drop ship). • Zappos is a service company that happens to sell shoes, clothing, handbags, eyewear, watches (and eventually a bunch of other stuff).
Slide 3: Customer service value proposition in action… Zappos is committed to WOWing each and every customer. • Customers come… • 7.4M total purchasing customers (about 2.5% of US population) • 3.3M have purchased in the last 12 months • Customers come back… • On any given day, about 75% of purchases from returning customers • Repeat customers order >2.5x in the next 12 months • Customers come back, order more and order more often… • Repeat customers have higher average order size • $111.98 – first time customers in Q406 • $143.22 – returning customer in Q406
Slide 4: Word of mouth in action… Word of mouth enhances marketing investment significantly • Advertising spending… • 85% Internet • 15% Print • New customers acquired heard about Zappos… • 44% from Internet • 43% from word of mouth • 13% from other
Slide 5: Power of Repeat Customers & Word of Mouth $1,200 $1,000 $800 $600 $400 ) M n i $ ( e l a S s o r G $200 $0 Gross Sales 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008F 1.6 8.6 32 70 184 370 597 850 1,000 5
Slide 6: What is customer service?
Slide 7: Customer Service: What Customers First See • 24/7 1-800 number on every page • Free shipping both ways • 365-day return policy
Slide 8: Customer Service: What Customers Experience • Fast, Accurate Fulfillment • Friendly, helpful “above and beyond” customer service • Refer customers to competitors’ web sites
Slide 9: Customer Service: What We Do Internally • 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 • Culture book • Interviews and performance reviews are 50% based on core values and culture fit
Slide 10: 10 TIPS for building a service-focused culture
Slide 11: TIP #1 Commit to customer service. Make it part of your mission. It’s not just a department… Be true to your mission when making hard (or easy) decisions.
Slide 12: Zappos.com Mission To Live and Deliver WOW • Internally, we have a saying: • We are a service company that happens to sell _____________________. shoes and handbags and clothing and eyewear and watches and accessories (and eventually a bunch of other stuff) 12
Slide 13: TIP #2 Come up with committable core values. Do some soul searching. Don’t come up with core values just because they sound good.
Slide 14: Zappos Core Values 1. Deliver WOW Through Service 2. Embrace and Drive Change 3. Create Fun and a Little Weirdness 4. Be Adventurous, Creative, and Open-Minded 5. Pursue Growth and Learning 6. Build Open and Honest Relationships With Communication 7. Build a Positive Team and Family Spirit 8. Do More with Less 9. Be Passionate and Determined 10. Be Humble 14
Slide 15: TIP #3 Actively manage your culture based on your core values … … for every single department.
Slide 16: TIP #4 Make “WOW” part of your company’s everyday vocabulary.
Slide 17: TIP #5 Remember that customer service is an investment … … not an expense. Don’t hide your 1-800 number. Don’t measure call times.
Slide 18: TIP #6 Trust and empower your customer service team. Find people that are passionate about customer service.
Slide 19: TIP #7 Create a culture book.
Slide 20: TIP #8 Give great service to everyone: Customers Employees Vendors Investors
Slide 21: TIP #9 Make culture part of everyone’s performance review.
Slide 22: TIP #10 Have the entire company celebrate great service. Tell stories.
Slide 25: Q&A • Email me -- tony@zappos.com for: • Answers to any additional questions not answered today • A copy of our culture book • Tour of our offices when you’re next in Vegas • Job opportunities