Management & Leadership December 30, 2009, 5:00PM EST
By Christopher Palmeri
The online shoe seller is marketing its playful, customer-friendly model to other businesses
Visitors touring Zappos.com’s suburban Las Vegas headquarters can see Chief Executive Anthony C. “Tony” Hsieh waving from his cubicle or get their photos taken in goofy, mullet-shaped wigs. On the tour, which the online shoe retailer offers 16 times a week, staffers blow horns and ring cowbells to greet the guests, who move among the aisles in groups of 20, trying to get a handle on the company’s unique culture. “The original idea was to add a little fun,” Hsieh explains. Then it all escalated “as the next aisle said, ‘We can do it better.’ ”
Zappos already knows how to sell shoes. Now it’s hoping to profit from people’s fascination with its friendly, antics-filled business model. Last summer, the company began holding two-day, $4,000 seminars on how to recreate the essence of its corporate culture. At the third such session, last October, the 25 attendees included an executive from the Girl Scouts, some competing e-tailers, and an entrepreneur from Scotland—a market Zappos doesn’t even serve. In coming weeks the company will also relaunch Zappos Insights, a Web site offering management videos and tips from staffers at a cost of $39.95 a month.
The goal behind these activities is to build more buzz around the Zappos brand and its extreme customer service. Hsieh, 36, is an avid consumer of management tomes. He has 1.6 million followers on Twitter—more than either CBS News or the NFL—and he regales these fans with inspirational quotes, riffs on the news, and whatever else is on his mind. In the October seminar, which will be repeated once every quarter, Hsieh, the chief financial officer, and two dozen other staffers shared tips on hiring, compensation, customer care, and creating the right work environment.
One big Zappos fan is Amazon.com (AMZN) founder Jeffrey P. Bezos. On Nov. 2, Amazon completed its purchase of Zappos for shares worth $1.2 billion.
There’s certainly much for students of management theory to try on at Zappos. For example, pay for call-center operators starts at a modest $11 an hour, and there are no bonuses or 401(k) matching contributions because Hsieh believes the most productive employees work for the psychic gratification in helping others. Customer service reps are given plenty of freedom. They may chat for hours with customers, write thank-you notes, send flowers, and even direct shoppers to rival Web sites if an item is out of stock. In a tough year for retail, sales are up by double digits.
Zappos rep Michelle Robles recently showed a reporter how the approach works. She offers coupons and free shipping to one unhappy customer while grabbing a returned pair of shearling boots for another. Robles knows her top priority is to establish an emotional connection. More than 95% of Zappos’ transactions take place over the Web, so each actual phone call is a special opportunity. “They may only call once in their life, but that is our chance to wow them,” Hsieh says.
A Zappos seminar last July impressed David Brautigan, who runs a family heating and air-conditioning repair business. It prompted him to fire 12 employees who were “just not being nice,” while rewarding those who remain with such perks as sky diving trips. “The nicer we are to people,” he says, “better things are happening.” Hsieh appears pleased to spread that message: “Sharing is how we build our brand.”