Tony Hsieh, 1 CEO of Zappos.com, is on shmula.com to answer your questions today.
Be sure to read our other interviews in our leadership series.
Update (12/23/2008):
Tony’s responses to the questions in the comment section of this post can be found in this 5-part series:
- Interview Questions from shmula.com blog readers
- Tony Hsieh, CEO of Zappos, Part 1
- Tony Hsieh, CEO of Zappos, Part 2
- Tony Hsieh, CEO of Zappos, Part 3
- Tony Hsieh, CEO of Zappos, Part 4
- Tony Hsieh, CEO of Zappos, Part 5
Similar to previous interviews we’ve held 2 — you, the readers of shmula.com, will have a chance to ask Tony anything you’d like in a structured and transparent conversation with a thought leader in customer experience management, a very successful entrepreneur, and a bona-fide social media freak (but has managed to use social media for the good of the company, adding value to its reputation, customer loyalty, and revenues).
Here are the Q&A logistics:
- Ask your questions in the comment section of this post.
- I will keep comments open until December 5, 2008.
- Tony will respond to any, or all, or no question at all.
- I will post his responses in succeeding posts beginning on December 12, 2008, so stay tuned to shmula.com!
To better frame your questions, here is a quick background on Zappos.com and Tony Hsieh 3:
Zappos.com is a Service Company that happens to sell stuff. In their words,
Internally, we have a saying:
We are a service company that happens to sell ________.shoes
and handbags
and clothing
and eyewear
and watches
and accessories
(and eventually anything and everything)
In terms of growth, below are their published numbers for Gross Merchandise Sales:
1999: Almost nothing
2000: $ 1.6 mm
2001: $ 8.6 mm
2002: $ 32 mm
2003: $ 70 mm
2004: $184 mm
2005: $370 mm
2006: $597 mm
2007: $840 mm
2008: Over $1 billion (goal)
What I find most fascinating about the company is their relentless drive for service to the customer as a core tenet. To engender a culture of service, Zappos subscribes to 10 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
The internal chatter is good, but the proof is in the pudding and — indeed — they have managed to create legions of Zappos.com promoters, recommenders, very loyal return customers, and die-hard fans. Take this example of a customer wishing to return some shoes that didn’t fit her mother’s feet and, unfortunately, her mother passed away shortly after the customer requested to return the shoes:
When I came home this last time, I had an email from Zappos asking about the shoes, since they hadn’t received them. I was just back and not ready to deal with that, so I replied that my mom had died but that I’d send the shoes as soon as I could. They emailed back that they had arranged with UPS to pick up the shoes, so I wouldn’t have to take the time to do it myself. I was so touched. That’s going against corporate policy.
Yesterday, when I came home from town, a florist delivery man was just leaving. It was a beautiful arrangement in a basket with white lilies and roses and carnations. Big and lush and fragrant. I opened the card, and it was from Zappos. I burst into tears. I’m a sucker for kindness, and if that isn’t one of the nicest things I’ve ever had happen to me
It’s incredible that a $1 Billion dollar company can still do the little things like this that make such a huge difference.
Be sure to read our other interviews below:
- Tony originally got involved with Zappos as an advisor and investor in 1999, about 2 months after the company was founded. Over time, Tony ended up spending more and more time with the company because it was both the most fun and the most promising out of all the companies that he was involved with. He eventually joined Zappos full time in 2000. Under his leadership, Zappos has grown gross merchandise sales from $1.6M in 2000 to $840M in 2007 by focusing relentlessly on customer service. In the spirit of transparency, you can follow Tony daily work and life on Twitter and on his Blog. ↩
- Read More Leadership Interviews ↩
- Tony focuses on continuing to grow the business at a rapid pace while maintaining the culture and feel of a small company. Prior to joining Zappos, Tony co-founded Venture Frogs with Alfred Lin. Venture Frogs is an incubator and investment firm that invested in Internet startups, including Ask Jeeves, Tellme Networks, and of course, Zappos.com. Prior to Venture Frogs, Tony co-founded LinkExchange, an advertising network that was successfully sold to Microsoft for $265M in 1998. ↩
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Karen Wilhelm says
I have some “wow” experiences with Zappos. I placed an order in the evening on Memorial Day a couple of years ago. My shoes were at the door the next day!
I don’t understand, however, how Zappos can have free shipping and free returns (for 365 days, I believe)in some cases. My daughter-in-law orders a lot of shoes at one time, then returns most or all of them. I’ve done the same, and I feel bad about doing it.
Can this be financially viable?
Mack says
I think it’s great how focused you are on the customer. How do you financially justify going the extra mile and making cash money? Isn’t there a tradeoff? Are MBA programs, on the wholesale, wrong on this tradeoff assumption?
Gary James says
Zappos recently laid-off some of the workforce. I have a few questions:
1) How is morale these days?
2) Everyone is expecting a really tough Q4, what is Zappos doing to mitigate the effects of the downturn?
Bail Me Out says
Given your predisposition for the customer, what is the right thing to do with the Big 3 Automakers? It seems to me that bailing them out is more about the employees and the US Economy as a whole than it is about people’s experience with Ford, GM, or Chrysler.
Would Tony Hsieh bailout the Big 3 Automakers?
Dustin Robertson says
Your free next day air promotion in 2007 skyrocketed your growth. Have you looking into cutting marketing expenditures to fund benefits for the customer like fast shipping?
Nancy Low says
I see Zappos participating at leadership events – HOw do you measure your ROI on leadership development within your organization ?
chad says
I would like to know what Zappos is doing to monitor your brand on social sites like Twitter and MySpace. How many employees do you have monitoring social sites, and what is your strategic response when something negative is said?
Dave says
What are your plans for international expansion? Which markets do you see first, and why?
kc says
This is a general business question:
What is your advice on working within a de-centralized organization and being charged with growing the e-commerce portion (approx. 15% of the whole) within the realm of a traditional company offering little support or understanding of the business model?
Ben Shin says
Hi Tony,
Zappos started with the shoe category and is now selling other stuff. In one sense, Zappos is becoming more and more like Amazon. What is different between Zappos and Amazon?
Edward Cullen says
Have you seen Twilight yet? Did you like it?
Jeremy Hanks says
What are your thoughts about drop shipping/supplier direct fulfillment? I’d imagine that at some point as you expand into other categories, you’ll find yourself limited by space and $ that you’re willing to tie up in inventory. How would Zappos approach a strategy to use virtual inventory as a way to provide deeper SKU options for your customers? – Jeremy Hanks, Cofounder Doba
Nathan says
What leadership lessons have you learned in your time as CEO? Also, what mistakes have you made and how did those mistakes change you and change the company?
Joe Rawlinson says
How do you think great customer service will influence customers in a slow economy when many are becoming more price focused?
Aside from the layoffs that we’ve heard about, how else are you cutting expenses to stay profitable?
How do you balance expense cutbacks with continued investment so you can gain market share over competitors?
Brad Briscoe says
How do you set and monitor quality standards for the shoes and other products you offer so that product quality matches your service quality?
Marquis Parker says
I’m a frequent shopper at Zappos. As a customer, I noticeably observe Supply Chain and Service Excellence, but I have one question: the site seems to be lagging behind both, in terms of innovation, usability, and current-ness. The site is a way-back of the early nineties; a link-farm of sorts.
Don’t get me wrong — I’m still very loyal to Zappos, but the site is clearly behind, but Fulfillment and Service Excellence are top-notch.
Thomas says
How do you ensure that the people you hire into Zappos actually believe in your company culture and core values and aren’t just paying them lip service to get through the interview process?
Cheri Register says
Given the increasing diversity of the population in the US, why is it so difficult to buy women’s shoes in sizes smaller than 6? When 5s are available, which seldom happens in shoe stores, they are usually narrow in width. My daughter has a fairly typical Korean body type, with short, medium to wide feet. She can’t be the only one frustrated with trying to find shoes that fit–especially fashionable women’s shoes, not children’s sizes. Someone must want to serve this market.
jamie rozansky says
I am a director of operations in a small/midsize company, under 100 people. We pride ourselves on building our business based on customer service. I am so impressed and inspired by your organization, that I would love to know what you do to compansate, and reward your customer service reps. Is there a specific method you use? How do you combat negativity? How do you expand your business and maintain your culture? I would love to be an intern in your office and experience your operation. I have been equally satisfied by all of my personal experiences as a consumer dealing with Zappos. I have never been disappointed, nor experienced anything but consistant friendliness and service. I would love to learn from you, so that I can share your service model in our industry and business. Please feel free to contact me. Thank you
Rob says
The book “the best service is no service” — what are your thoughts on the thesis of that book? Do you agree that eliminating the need for the customer to contact the company is a good thing?
I personally hate dealing with any customer service and wish that companies made it easier for customers to have good experiences. Having to call customer service is a failure in the company and is sometimes made worse when customer service isn’t good. There can be two failures I guess.