Recipe For Success – 5 Things Zappos Does Differently

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Zappos announced that it would no longer be posting jobs using traditional outlets.

Huh?

Breaking the mold again, they decided to use their own social network to find new employees.

“Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand. For individuals, character is destiny. For organizations, culture is destiny.”

– Tony Hsieh, Delivering Happiness: A Path To Profits, Passion, and Purpose

…Just another example of how Zappos does things a little bit differently from the competition.

The payoff?

In 2009, Amazon acquired the company for $1.2 billion, earning Zappos founder Tony Hsieh an estimated $246 million.

Not bad.

Equally important, Zappos is consistently voted one of the most popular places to work!

I thought I’d share five business secrets that have made Zappos such a success (while doing things their own way), so maybe you could find yourself earning a whopping hundred million dollar payday too.

1. Hire For Cultural Fit

Zappos takes hiring the right people very seriously.

As shown in this video, Tony Hsieh applies the principle of “hiring slowly, and firing quickly when it’s not the right fit.”

Zappos wants employees who mesh with the company’s culture.

…That means people who bring passion, have a sense of fun, and are committed to providing exceptional customer service.

Zappos employees are not discouraged from “being themselves.”

In fact, it is actively encouraged!

Personal development of the employees is considered key to success.

Each employee is provided with their own goals coach, who helps them get what they want – both inside and outside of their work at Zappos.

The end result is happier employees, which leads directly to satisfied customers.

2. Ensure The Customer Gets Results

Zappos offers a 365 day return policy – no exceptions and no catch.

All customers need to do is return the product in its original packaging and in the same condition.

Return shipping for the customer is provided for free.

You may be wondering whether such as generous return policy is actually profitable…

Craig Adkins, Vice President of Services and Operations at Zappos, offers a clue:

“Our best customers have the highest returns rates, but they are also the ones that spend the most money with us and are our most profitable customers. These best customers have a 50% return rate.”

3. Understand What Your Customer Really Wants

Tony Hsieh understands the difference between selling a product and giving a customer what they really want. As Hsieh has noted:

“We asked ourselves what we wanted this company to stand for. We didn’t want to just sell shoes. I wasn’t even into shoes – but I was passionate about customer service.”

Simply put, Zappos is about “delivering happiness,” not just selling shoes.

That translates to providing exceptional customer service every single time someone buys.

Stories abound of Zappos over delivering on customer service.

The “best man” story is typical:

Jay was best man at a wedding and ordered his shoes from Zappos (because they were the cheapest deal he could find). Unfortunately for Jay, the shoes were delivered to the wrong address. When Jay called Zappos with his problem, they went to work to solve it immediately. An overnight replacement of the shoes were sent to Jay at no additional cost. Jay was also upgraded to a VIP account and given a total refund of his purchase.

Jay’s impression of Zappos? They have “earned a customer for life”.

That commitment to customer service has paid off handsomely for Zappos:

75% of Zappos customers are repeat buyers.
(Source)

4. Have A Long-Term Vision

Tony Hsieh has, at times, passed on short-term opportunities when it didn’t fit with his long-term vision for the company…

San Francisco may be the heart of the tech community, but the area didn’t have enough potential employees who would deliver the customer service Hsieh was looking for.

So…

Hsieh made the somewhat controversial decision to move the company Las Vegas – a city hardly known for being a tech hub.

Hsieh’s commitment to the vision for his company was again tested when he was approached by Amazon to sell…

He was originally approached by Amazon in 2005, but felt that the chance of the company’s (at that point) fledgling culture being subsumed was too much of a danger…

Consequently, he rejected the offer.

Four years later, the recession drove Zappos to need fresh capital.

Hsieh was again reluctant to sell, and it was only after a personal conversation with Jeff Bezos, assuring him that the company’s culture would be preserved, that Hsieh finally agreed.

5. Be Persistent

“Persistence and resilience play a big role.
I think a lot of people give up way too early.”
– Tony Hsieh

The company’s persistence has been tested many times during their rise to the top.

It’s easy to look at the success they’ve enjoyed, and forget about the struggles that Tony and his team went through to get there.

When Hsieh invested $500,000 of his own money to start an online shoe store, it was almost universally called a bad idea…

That was further reinforced when the company almost ran out of money in 2000, and failed to receive backing by multiple VCs.

The company only survived because Tony decided to invest his own money yet again.

After the dot-com crash, half of the Zappos staff had to be laid off – and by 2002, Tony had to sell his San Francisco loft to purchase a vitally needed warehouse for the company.

The situation didn’t really turn around until the holiday buying season of December 2007, when Zappos finally turned a profit.

By 2009, annual sales had reached over $1 billion.

It may have required grit and determination, but in the end Hsieh’s vision of “delivering happiness” won the company a lot of business, and in turn, a lot of money.

Zappos built success from the ground up by sticking to their principles, even in the face of adversity, and going out of their way at every turn to deliver amazing customer service to every last one of their shoppers.

What are you committed to?

In your corner,

Charlie

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