Zappos’ culture: paying employees to leave is great marketing

Saw a fantastic video online today that I thought I’d share.

It’s a presentation by Tony Hsieh, the CEO of Zappos, the US online retailer famous for shoes. He talks about his goal to make Zappos stand for the very best customer service and customer experience on the planet. So far, so blah. It’s a hoary old claim many cynical CEOs make.

But Hsieh’s company sees this goal as a real crusade. And it’s based on belief in some traditional marketing values: do what you say you’re going to do; always strive to exceed the customer’s expectation; and, critically, only hire people who are passionate about these things, because if you don’t, convincing people will be like urinating into a particularly gusty Force 7 gale. His passion for customer service has seen Zappos grow way beyond shoes, achieve revenues of over $1 billion this year (from a standing start eight years ago) and attract more than three per cent of the US population as customers.

In this age of social networking, keywords and SEO, what’s really interesting is what Hsieh thinks about more traditional interactions, the ones using a device invented in the 19th Century: the telephone. Zappos believes that having a customer’s undivided attention on the phone for several minutes  is golden, the best branding opportunity a company can have. As a result, Hsieh aims to make that time as memorable as possible, a time, as he puts it, ‘to really wow customers’.

To achieve the wow factor,  Zappos is obsessive about the company culture and who it hires. Everybody who applies to join faces two stringent interviews, one to establish whether they can do the job and one for culture fit.

Once a decision to hire has been made, every employee faces four weeks induction training, during which time they can choose to leave in return for a $2000 one-off payment. Amazingly, only two or three percent of people take up that offer. Meaning the remainder are people who really, really want to work for the company and buy into the culture. And it cuts out the less committed ones before they have time to do damage. Getting a reputation for customer service is hard. Losing it is easy.

Once the call centre reps (called customer loyalty managers) get to work, Zappos wants customers to remember their interactions and tell all their friends. So there are no scripts, no measurement of average call times, no procedures to cut the cost of telephone calls, no recorded messages. Just  encouragement  – from the very top down – of highly motivated humans to talk to other humans and solve their problems. In the video, as a demonstration of how far Zappos’ people go, Hsieh tells a funny story about someone calling a rep and asking for help in finding a pizza at two in the morning and getting numbers for some local outlets.

Hsieh says that because the web makes every company and its actions totally transparent, a company’s culture and a company’s brand are now two sides of the same coin. Unlike in the TV advertising age, consumers today can quickly and easily see through companies that try to project an image that’s not really true to life.

We think that’s true in B2B too: it’s no good claiming to be the innovation leader  in a particular technology area when you’re not – just look at tech companies’ press releases to see how often they do this. Nor does it make sense to bang on about your commitment to the customer when there are countless examples out there proving the opposite. What Zappos shows is that there’s a huge gap between claim and reality. And that achieving the latter demands obsessive commitment 24/7.

It’s worth 15 minutes of your time to see what he says.