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Zappos Principles: How To Make Customers and Employees Happy

Digital Marketing
August 31, 2018
9 min

Online shoes and clothing store Zappos, has grown from a company with an office in a garage into a multibillion-dollar corporation under the direction of Tony Hsieh after he became a CEO. Today, this ecommerce store is among the TOP 20 worldwide most visited websites in the shopping category according to data from SimilarWeb 2018. appeared in the web space in 1999, just at the peak of the ‘dot com’ boom. But, unlike most of them, they managed to survive a fiasco. We were lucky to meet and communicate with Shereen H. Eltobgy, the co-founder of a culture ‘coach-sulting’ company ‘Delivering Happiness’, created on the principles of Tony Hsieh.

Today, we would like to share some curious chunks from this conversation with you.

‘Zappos system and approach can be applied to any business in large and small countries. The most important thing – is to deliver happiness. Our guiding principle is delivery of happiness to everywhere. This is not about shoes or the shop. It’s about happiness. Our goal is universal happiness’.

Steps to develop a brand awareness strategy for any company:

  • It is necessary for the team to work on a single column of values.
  • It is necessary to define your personal values. We always seem to know what these are, but we never formulate these exactly. It is necessary to define what is valuable to you.
  • It is necessary to determine everybody’s values and combine the answers into an overall, harmonious system. Moreover, you should ask about the values not only the current and prospective employees, but also those who are no longer working for the company.
  • Values should not be written on a board – they have to be vital and viable.
  • Values must be kept. You have to live them and apply them.
  • Extrapolation of values and collection of feedback is a bad thing. Values must be distributed throughout the company. People must feel that these values work.
  • Most importantly, values must turn into behavior. Without it, being simply a sign on the board, these are doomed.
  • After the initial survey, we had 47 values, but in the end, we had only 10. The uniqueness of our people made us the company that we are today. People work together, move on together. It ignites.
  • Values are fundamental, these are moving along with people and strengthen them.
  • People need three things in life: to live, to love and to leave something behind. The Zappos company is like a person: we also want to leave something behind, for example, a good experience or a feeling of happiness.
  • “The right people” are equal to “the right results”. Tony says – if you have the right culture, everything else falls into place. The most important thing is to find the right people.
  • The system of recruitment is essential. At a job interview, we ask how happy in your life you are according to a scale from 1 to 10. If the answer is less than 7 – this person is not for us. Anyone who has a positive attitude to life will attract happiness themselves. Such a person suits us. We just do not want to work with lean and sad people. Our formula is 20% – this is a personal culture or a list of personal values, 80% – is a customer orientation.
  • When all are united under the values with a single mood – the system starts working. Zappos works on brand promotion from the very bottom to the very top of management.
  • The main thing for employees is to be able to inspire themselves. They should be a little strange. They should be allowed to laugh when they want and dress how they want, as well as to decorate their desktops as they want. Employees should feel free. Then they are more creative. Then they are ready to go an extra mile to achieve something for the company.
  • Our employees have a right to make decisions.
  • We do not measure the duration of calls. This is not our KPI. We trust those who work in the service department. We do not supervise their work. We believe that they can solve any issues. This is total trust.
  • People always need feedback. They should feel the result. Personal contacts with customers should be encouraged. We call it a tuned and planned growth.
  • In 10 years we have grown from 0 to 1.2 billion dollars in sales. This is one of the fastest growing companies within the sector of U.S. online stores. We are engaged in teaching, we do not teach our employees only, but we also consult other companies. And as a result, all the people we communicate with, begin to change their culture. We are building brand awareness that is picked up even by the customers.
  • We have great analytics; its primary task is to offer purchase solutions and storage solutions. For example, winter boots sell faster than summer footwear, and children’s products are sold out more quickly than products for women.

‘The main task of the consumer service – to make consumers happy. When we understand the sense of value, it can be scaled. And happiness is for everyone – not only for clients but also for employees, owners, people all around, even just for the community and society’.

  • The primary target of Zappos is to create a WOW experience. Most of our customers do not call. They come to us online. There won’t be a second chance to create the first impression. The first impression is the website. It must leave an impression, be easy to use, everything important should be close and clear. It is vital that the products that you are selling look on the website like in real life too. We always visit our site to see how it works, how it functions, to see if there are any problems there. Only about 5-7% of users call after visiting the site. But this amount is the key to growth, as those who call, often make repeat purchases. 75% of our sales are repeat sales.
  • Our service department can take liberties. This is important for the brand awareness. They can give you a card, make a gift or a discount, and it is up to a specific operator who is interacting with customers. This right to make decisions is very important for employees.
  • Our culture gave us our growth. 75% of our buyers come back to us three times a year on average. Furthermore, repeat customers order more than new clients.
  • We have 8,000 incoming calls per day (remember, this is only 5-7% of all clients) (eds. as of 2013). 1,300 emails receive responses every day. There are several hundred people in our own call center. We do not give these services to outsource. Customer service team rotates between the internal departments.
  • Zappos delivery service also belongs to us. Our stores are our property. However, we do send our products via major market U.S. courier services. We do try to deliver our products within 24 hours, and we succeed in that. A customer can always return our product, even after a year of use.
  • Currently, we try to give nothing to outsource. From the very beginning, Zappos delivery service did not belong to us, and our warehouses were away. Indeed, we were not impressed by that experience. That’s why we decided to move to our own warehouses 2 years after the start of work.
  • Our top managers always communicate with customers on Facebook. We try to create the content which educates or entertains people. Moreover, our clients are happy if we ask them what we should improve. Many of them are professionals, and their help is particularly free. In addition to this, by this communication, you create a great experience.
  • If you’re a manager in a call center, you are on the front lines. Customers have to listen to you. You know more than top managers. Even though, you can’t cast pearls, can’t peddle – all changes must be incorporated into the common cultural line.

‘Our business model based on happiness, can such a model be successful? Tony says – If you do not want to go to work – then do not go there, even if you’re the president of the company’.

  • People will forget everything that you have said or done, but they will never forget the feeling that you have caused in their hearts, memories, and emotions. Zappos says – we will help you solve your issues, your problems, we will make you feel WOW! Without WOW there’s nothing.
  • All of our measurements, all our KPI – is brand awareness. This is Zappo’s Culture.

“Happy People” is equal to “Happy customers” which is equal to a “Happy Company”

  • Many people say that, yes, your principles are cool, but for our market (countries, companies) these will not work. I hear this very often. How can you calculate happiness? I say it can be calculated. Happiness is not just a term. This is something that can be applied to business. Happiness – is positive feedback, improvement of the quality of life. We regularly conduct surveys of what happiness is, and we can say that we know a lot about that. When our employees go to work, they are happy, when they do not go, they are sad. This is the key to success.
  • The happiness of an employee at work is an increase in sales by 37% and precision of performance by 19%, productivity by 31%. These are the figures of Zappos.
  • KPIs should be established on the level and the basis of happiness, and this is the only way.
  • The most significant investment in making your staff happy is not the money; it is time, it is communication, it is training. We have an internal network in which people create clubs and interest groups. This is the culture already. The leaders have to understand what stress influences the staff – and have to reduce it. Physical health is one of the KPI happiness (heart attacks, diabetes, time in the hospital, pressure, etc.).

We do share these principles in our company and do our best to make our clients happy as well. Feel free to get in touch with the Promodo team.

Written by
Dasha Yaskova

Marketing Content Manager

August 31, 2018
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