Defining Service and Culture: The Zappos Model

Core Value 10 - Be Humble. Even CEO, Tony Hsieh had time to take a picture with me!

Core Value 10 – Be Humble. Even CEO, Tony Hsieh had time to take a picture with me!

I’ve just returned from a three day Zappos boot camp in Las Vegas where I learned about a company that is undeniably one of the most unique companies on planet Earth. Sound like an exaggeration? It’s not!

So here’s the quick skinny on Zappos. They started selling shoes in 1999 when founder Nick Swinmurn couldn’t find the shoes he was looking for at any of the stores in the local malls. There was a .com explosion happening and internet e-commerce was in its infancy. So Zappos was born. What’s interesting is that while many of Zappos’ peers lived a short life, Zappos continues to thrive having crossed over $1,000,000,000 (that’s a Dr. Evil, $1 BILL-ION DOLLARS) in gross sales in 2008 alone. Since then, the company has continued to crush it with continued expansion of employees and corporate space.

So what makes Zappos so different? They’re a company that sells shoes right? WRONG.
Turns out Zappos is a Customer Service company that happens to sell shoes. And let’s take that to another level. Not just a company offering great service to its customers, but also great service to their own employees. This brilliant master plan has multiple levels making them successful, but all levels fall under one word: CULTURE. The ‘go to’ of all decisions from hiring to firing is based around the existence of the companies’ culture. You could say it’s like the Bill of Rights of Zappos.

So, if you need to make a decision on hiring someone…the priority is not so much that individual’s skill set, but how they effect the culture if hired. If the right personality and values are there, then the second examination is the skill set. If the two don’t align then an open job position could remain vacant for months until the right person is found.

The Zappos Core Values

• 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

Marketing
In terms of marketing, look at what Zappos has created for itself. How big do you think their marketing team is? Zappos’ marketing team consists of multiple thousands of people, like me, who are amazed by the service offered. People are stunned by such a high level of service that they shout to the rooftops using social media about their Zappos experience. This blog isn’t being written because I was underwhelmed! I am writing about a company who isn’t paying me a dime to express my amazement. By creating a culture that amazes both the customer and the employee, word of mouth marketing spreads like wildfire. What Zappos has done is separate themselves from the competition by offering what no one in the marketplace can…amazing service.

The Importance of Core Values
The core values sets the standard and atmosphere for all things and holds everyone accountable from the CEO on down. If management doesn’t follow these standards then the culture doesn’t work. Brilliantly, the core values weren’t written by management and handed down. Management asked the employees to create them! Everyone contributed in creating their own culture.

Hiring the Right People
Imagine the coolest people you’ve ever met in your life. Now imagine working with them everyday! That’s how it is at Zappos and that’s not by coincidence. It is said that getting into Zappos is more difficult than getting into Harvard! Having reviewed their amazingly challenging interview process, it’s a daunting task to say the least. The reason for the intense employee screening is to protect the culture. Imagine hiring a total negative-Nancy into a great atmosphere…we all know, it only takes one bad apple. So, Zappos does all it can to keep out anything that may disturb the cart.

Now check this out…after a candidate is hired, their four week training period begins. Four weeks!! And here’s the real head turner. To ensure that a new hire really wants to be at Zappos, the company will offer $3,000 for that new hire to leave if they are unsure about the fit at all. This money allows the new hire to walk away without the financial stress of finding a new job elsewhere. Crazy or brilliant? I’d hedge on brilliant. An added protection to ensure that the culture is upheld.

Empowering Their People

Once trained, the people of Zappos are empowered. This is not a culture where big brother is always watching. Zappos encourages its employees to make good decisions based on the very first core value of delivering ‘WOW’ through service. A great example of this is the empowerment of employees who work in the call center. When a customer calls, a call center employee has the power to:

- Send a personalized thank you card
- Send cookies to that customer
- Send a bouquet of flowers to that customer
- Offer a discount on the purchase or the next purchase
- Give an entire order away for free (typically under a difficult circumstance of the customer).

All of these offers are done at the company’s expense and do not need management approval. The flowers by the way – not some cheapy floral arrangement – they’re nice and would cost us around $90!

Happy People Deliver Service

The culture at Zappos encourages happiness. The employees are well-trained, well-treated, empowered and work amongst other great people. Let’s not forget about the pride one has in working there. After all, not just anyone can work at Zappos. (Before anyone can get cocky about this, be sure to reference Core Value #10 – Be Humble). So this overwhelming sense of happiness spills over naturally when delivering WOW service.

A quick look at some of the benefits of working at Zappos:

a). Individual work stations. (All call center employees have their own work stations which is really impressive and actually inefficient in terms of space, but it makes the employees feel good).

b). Freedom to express yourself. Paint the walls if you like…employees literally do!

c). They know you’ll be on Facebook! Just spend 80% of job time doing your job..the other 20% can be grabbing a free coffee at their amazing coffee house or surfing the web or even taking a nap in the designated nap room. I’m not making this up!

d). Awesome health benefits that includes medical, dental, vision, LTD, life insurance, AD&D insurance and 401K with great matching. Copays..you won’t have any!

e). Opportunities to grow within the company.
Everyone can progress if they desire too. They say the more you learn, the more you earn. They have training programs for every career path you could want within the company. A-MAZING!

f). Free lunch everyday. Yes please!

g). Third Party Services
– need your dry cleaning done? Leave it in a bag in the lobby, it will be picked up and returned at a nice discounted price. Need your car washed? It’ll be done by the end of your shift.

h). Need a discount on shoes or apparel?
40% OFF for all Zapponians. (I found myself looking at everyone’s shoes…these people have good taste).

i). No Performance Reviews or TPS reports (NICE!). Instead of performance reviews there is a cultural assessment once a year based on the Core Values.

j). Opportunity to meet with the company’s full time life coach! (That’s Coach Augusta…one amazing lady!)

My Takeaways from Zappos:

1. Inspired: After seeing what a positive culture Zappos has created, I left inspired by the people who are passionate about what they do everyday. It gives great hope just knowing that a company like this exists.

2. Dream. Having seen what Zappos has been able to achieve by offering great service, I leave dreaming bigger. By nature, I’m a dreamer, but I realize I haven’t been dreaming big enough. The beauty of what Zappos has taught me is that any company can be this.

3. Create. Should I be fortunate to see my company grow, the growth will be based around what I saw at Zappos. We will have fun at Beyond Marketing! Like Zappos, I desire to create a company culture that everyone will want to be part of.

4. Shop. I’ve only ordered one thing from Zappos and it wasn’t for me. I am already a lifetime customer!

 

About James

James La Barrie is passionate about marketing and changing a company's service culture. Originally from the Caribbean island of Antigua, James melds his approach of marketing and delivering elite service together as one. James has injected his 'service marketing' approach throughout his career to transform companies from good to great.


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