Zappos started out in a living room with the original goal to get people to buy shoes online. Ten years later, it was bought by Amazon for $1 billion during one of the worst economic recessions back in 2008-2009.
How did Tony Hsieh take an unthinkable business model and turned it into a billion-dollar business?
He built using world-class customer service, not just relative to e-commerce, but world-class service by anyone’s standards.
Less Marketing, More Customer Experience
Zappos produced higher sales by focusing less on marketing and advertising, and more on customer service and customer experience.
They took most of the money they would have spent on paid advertising or paid marketing and rather spent and invested it into customer service and the customer experience. Then the customers would do the marketing for them through word of mouth.
They built their brand on the concept of “deliver WOW through service,” and it worked tremendously.
Zappos offered free shipping and free returns just to get people to give them a try. For instance, they’d encourage customers to buy at least three pairs of shoes, pick a pair, and just return the other two back. This gave customers more confidence in the brand since there’s zero-risk.
They’re one of the first companies to do that, which a lot of organizations still don’t do today because of the cost. Instead, Zappos saw that as an acquisition cost where they’re willing to pay this amount because they know it’s going to pay off.
Company Culture as Their #1 Priority
Zappos’ number one priority is not customer service – but their company culture. Hsieh’s belief is that if they get the culture right, most of the other stuff like delivering great customer service or building a long-term, enduring brand or business will just be a natural byproduct of that.
As a result, they’ve developed a cult-like following within their own brand and their 1300-team members that are referred to as “Zapponians.” They’re not paid any more than someone in a similar position in the same or different industries. They just really buy-in and love what they do and completely understand the mission.
For more information and resources on Tony Hsieh’s legacy and how he built a customer experience powerhouse, check out The Customer Service Revolution podcast. If you’d like to listen, head over to Episode 034: The Legacy of Tony Hsieh, The Man Who Built Zappos Into a Customer Experience Powerhouse.