SXSW: Saturday Opening Remarks: Tony Hsieh

Surrounded by Zappos

Tony Hsieh is from zappos.com.  Last year when it rained zappos handed out rain ponchos. Impressed me. This year, no ponchos. Oh, well.

I’m surrounded by a sea of people in zappos t-shirts here in the second row of the second section. Yikes. Gotta watch what I type or the guy next to me will confiscate my computer. On the other hand, I can fill my time while waiting by reading the personalized messages hand inscribed on the backs of all the t-shirts.
Surrounded by Zappos

Hugh is welcoming everyone. He’s recognizing sponsors. Yea sponsors. Yea staffers. Yea volunteers. He’s talking about how sxsw listens to the bloggers and tweets. Which is why they are so successful. rate.sxsw.com is where to leave your feedback.

Hugh is talking about the rain ponchos. He explained that a mix up meant there were no ponchos this year, but that meant there WOULD BE rain this year. He thanked zappos for bringing the rain.

Tony came out and talked about zappos in Las Vegas and said they were giving away a trip to Vegas. He said more women than men shop at zappos, and one woman spent over 60,000 there. He apologized for causing any divorces.

Surrounded by Zappos

Tony said that it was pizza that got him into the idea of zappos. He worked in a pizza place and a guy kept coming by and getting large pizzas, which everyone thought he ate. But he was taking them upstairs and selling them by the slice. This guy is now working for zappos.

He and another guy bought zappos as part of another deal, but he realized that zappos was the most interesting and successful and took it over full time. From the beginning, they wanted the zappos brand to be about customer service and customer satisfaction. So they don’t want to be about shoes, as they are now, but about the very best customer service.

Most of their orders (70%) come from repeat customers. Happy customers come back. Repeat customers spend more. Do you hear that, Sprint?

What is customer service? An 800 number on every page of the site. The telephone is one of the best branding devices because you have the customer’s undivided attention It you get it right, the satisfaction grows from person to person. They offer free shipping both ways and have a 365 day return policy.

What is customer experience? Fast, accurate fulfillment. surprise upgrade to overnight shipping for repeat customers. Everything that improves the customer experience is a marketing expense. Sometimes direct customers to web sites of competitors when they don’t have something in stock. Do what’s right for the customer. Call centers have no scripts, no quota of customers to handle per day, lots of training. One customer phone call was four hours long. The warehouse runs 24/7.

Their number one priority is company culture. If the culture is right, then everything else falls in place. Hiring emphasizes culture fit. Can be fired as bad for the culture. Training lasts 5 weeks and includes working in the call center and warehouse before you can get to your ‘real’ job. During the training period, they will pay you $2000 to quit. In 2007, 3% took the offer. In 2008 only 1% took it. Maybe the offer isn’t big enough, they keep increasing it. The people are there because they want to be there! They have a 500 page culture book that contains paragraphs from employees about what the company culture means to them. Twitter helps company culture. They rolled it out to the entire company and have Twitter classes during the training. Over half the employees are on Twitter. Can see at twitter.zappos.com.

Culture and brand are two sides of the same coin. Customer service is the entire company, not just a department. So money goes into the hiring process and the training process instead of other places. They want to own clothing, customer service, and culture. The 3 C’s.

Zappos delivers happiness.

The zappos culture includes committable core values: deliver WOW, embrace change, create fun and a little weirdness, be adventurous and creative and open-minded, pursue learning, be honest, be positive, do more with less, be passionate, be humble.

It doesn’t matter what your core values are, as long as you commit to them.

Steps for building a brand that matters. Decide if you are building a long-term brand. Figure out values and culture. Commit to transparency. Chase the vision, not the money. Build relationships. Build your team (hire slowly, fire quickly). Think long term.

He asked us to think about what our goal in life is. He talked about happiness being perceived control, perceived progress, and two more that I didn’t get. Two or three minutes to go, but my battery is gone. Zap me.

2 thoughts on “SXSW: Saturday Opening Remarks: Tony Hsieh

  1. Pingback: SxSW Diary - sharing our experiences of South by Southwest Interactive 2009 | Keynote - Tony Hsieh

  2. Pingback: SXSW Notes » Opening Remarks (Zappos.com)

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