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- Notes on Slide 1
- Some folks were at a sales conference, went out drinking, some Zappos folks and Skechers folks. Back to hotel, Skechers person really wanted a pizza. Room service was done, so as a joke someone through out idea of calling Zappos to order pizza. Skechers called Zappos, put on speaker and asked to get pizza! OPPORTUNITIES FOR BRANDING! Bit please, don’t call us for PIZZA
- History: Drop Ship Model, Selection- own and control inventory Selection - Service Expand service to more product
- History: Drop Ship Model, Selection- own and control inventory Selection - Service Expand service to more product
- The goal is to WOW every customer. How do we do it?
- Big emphasis on continued repeat customers. New product to expand audience, scale the service model to new product types, learning. Don’t spend a lot on marketing,spend $$$ in other ways to improve the customer experience, shipping, phones, etc… nDoesnt it cut into margin? No, it is an INVESTMENT!
- What is Cus. Serv for us. Established some base policies to define the core aspect of our customer service. We want to talk to our customers. All contribute to the core aspect of CS. The beginning of Cust. Serv. … but what do they experience?
- My nerdyshirts.com order for Rick Rolled. They Rick Rolled me by allowing me to buy the shirt, and they didn’t sent it. All I got was a Rick Astley video at the end of checkout. That was my checkout confirmation.For Zappos: No cut off times, can order in evening, get it next day. CLT trained to direct customers to other web sites if we do not have it. It is about the best service, lose the sale, make the lifelong relationshp.
- No outsourcing. Encourage reps to talk on the phone. Phones at HQ, instills service mentality into our heads…constantly. No avg. handle time. Did our customer service rep go above and beyond????? The telephone is an amazing way to brand yourselves, what you say in those few minutes is impactful…you have direct attention. Avg customer will call at least 1x in their lifetime as zappos cust. Tool that helps build our brand.IF YOU HAVE THE RIGHT CULTURE, THE RIGHT THINGS HAPPEN!Brand an culture two sides of same coin.
- Ordered wallet, got it. Wast for her and returned. Didn’t realize that she sent back 150 withi.
- Asked ourselves what do we want to be when we grow up? Do we wan to be best shoe retailer or something bigger? Decided on best CS. Customers bought into it, employees, great for recruiting, people felt they were contributing to something more meaningful. It is a long term win, good long term profit as opposed to short term wins. Be passtionate about what you are doing. Twitter, Wikipedia, Craigs.
- Back in day spent $$$ on marketing, trying to acquire customers. Had enormous acquisition numbers, too high, something like in the thousands per customer. Learned a lot from the failure of other .com companies….focus on existing customers, service them better, longer term revenue. These customers became our marketing!Chose to focus on 2 of 3 retail principles: Service and Selection…NOT PRICE! More loyal customers who will come back for experience.
- Be wary of experts, do it your way.. Important, not just with customers but with employees. Don’t fear info getting into hands of competitors. Vendors are our extra eyes to manage or business. Leverage others who care for your business.
- Show them the real “you”. What is the DNA of your company? Give them a peek behind the scenes, under the hood…they will respect you more! LISTEN, RESPOND, CARE, BUILD.
- You are only as good as the people you have on your team. Happy Zapponians make good Zappos. Key word is COMMITTABLE, not just a thing on a wall. YOU ARE WILLING TO HIRE AND FIRE BASED ON! Took us about a year to come up with this, something we aspire to be.
- The list is as important such that you truly believe in them. We don’t hire if someone does not fit culture. If through interview process someone does not fit even if good skills, we don’t hire. Cumulative effect of culture fit compromises makes a company not fun to work at. What do you want yours to be?
- Some folks were at a sales conference, went out drinking, some Zappos folks and Skechers folks. Back to hotel, Skechers person really wanted a pizza. Room service was done, so as a joke someone through out idea of calling Zappos to order pizza. Skechers called Zappos, put on speaker and asked to get pizza! OPPORTUNITIES FOR BRANDING! Bit please, don’t call us for PIZZA
- All employees regardless of position go through a 4 week training course learning how to do the job of our CLT team. Also, then on to 1 week training in KY at the warehouse fulfilling product.
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Zappos - Online Market World - 10-2-08
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Desc: Presentation given at Online Market World about Zappos
Slideshow Transcript
- Slide 1: Building a Brand that Matters Tony Hsieh - CEO Twitter: @zappos Online Market World 10-2-08
- Slide 3: My background (Tony) • 1994-1995: Pizza • 1996-1998: LinkExchange (online advertising) • 1999: Venture Frogs • 1999-Today: Zappos.com
- Slide 4: Zappos at a Glance Background • Founded in 1999 • 1600 employees (half in Las Vegas headquarters, half in Kentucky) • Zappos is “Powered by Service” • Providing the best online shopping experience possible. • Fast, Free Shipping. Free return shipping. 365-day return policy. • Fast fulfillment. Expedited delivery. Fast, friendly & expert customer service. • Best selection • Over 1200 brands, over 200,000 styles, over 900,000 unique UPCs. • 4 million items in warehouse • Photography in multiple angles. • 100% of products inventoried (no drop ship). • Zappos is a service company that happens to sell shoes, clothing, handbags, eyewear, watches (and eventually a bunch of other stuff).
- Slide 5: Customer service value proposition in action… Zappos is committed to WOWing each and every customer. • Customers come… • 8.6M total purchasing customers (2.9% of US population) • 3.7M have purchased in the last 12 months • Customers come back… • On any given day, about 75% of purchases from returning customers • Repeat customers order >2.5x in the next 12 months • Customers come back, order more and order more often… • Repeat customers have higher average order size • $111.98 – first time customers in Q406 • $143.22 – returning customer in Q406
- Slide 6: Power of Repeat Customers & Word of Mouth $1,000 $900 $800 $700 $600 $500 $400 M G $300 o n $ e a S s r ( ) i l $200 $100 $0 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008F Gross Sales 1.6 8.6 32 70 184 370 597 840 1,000
- Slide 7: Customer Service: What Customers First See • 24/7 1-800 number on every page • Free shipping • Free return shipping • 365-day return policy
- Slide 8: Customer Service: What Customers Experience • Fast, Accurate Fulfillment • Most customers are “surprise”-upgraded to overnight shipping • Create WOW • Friendly, helpful “above and beyond” customer service • Occasionally direct customers to competitors’ web sites
- Slide 9: Customer Service: What We Do Internally • No call times, no sales-based performance goals for reps • Run warehouse 24/7 • Inventory all product (no drop-ship) • 5 weeks of culture, core values, customer service, and warehouse training for everyone in Las Vegas • We’ll pay you $2000 to quit • Culture book • Interviews and performance reviews are 50% based on core values and culture fit
- Slide 11: 4 Things You Need to Build a Brand that Matters
- Slide 12: THING #1 VISION “Whatever you’re thinking, think bigger.” Does the vision have meaning? Chase the vision, not the money…
- Slide 13: THING #2 REPEAT CUSTOMERS “Great product, Great service, or Low Prices” (Choose and focus on 2 of the 3)
- Slide 14: Repeat Customer Data for Zappos.com
- Slide 15: THING #3 TRANSPARENCY “Be real, and you have nothing to fear.”
- Slide 16: Exposing ourselves as much as possible… • Zappos Blogs • http://blogs.zappos.com Zappos.TV • Zappos.tv (VIDEO) Twitter • Twitter.zappos.com Facebook
- Slide 17: THING #4 CULTURE “Committable Core Values”
- Slide 18: Zappos Core Values 1. Deliver WOW Through Service 2. Embrace and Drive Change 3. Create Fun and a Little Weirdness 4. Be Adventurous, Creative, and Open-Minded 5. Pursue Growth and Learning 6. Build Open and Honest Relationships With Communication 7. Build a Positive Team and Family Spirit 8. Do More with Less 9. Be Passionate and Determined 10. Be Humble
- Slide 20: Q&A Email me -- tony@zappos.com for: A copy of this presentation Answers to any additional questions not answered today A copy of our culture book Tour of our offices when you’re in Vegas Job opportunities Follow Zappos on Twitter! http://twitter.zappos.com
- Slide 21: Check out: http://twitter.com/zappos (Tony Hsieh - CEO) http://twitter.zappos.com (public mentions, employees) http://blogs.zappos.com (photos & videos of culture)
- Slide 23: Legal and Financial Disclaimer P.S. You might be wondering why we need to have a legal and financial disclaimer in this presentation, but you are still reading, so our lawyers, auditors and accountants would really like to make sure we make the following clarifications. Although an audit was underway and almost done, the financial information presented in this slide show was unaudited. We made every effort to present the best information we had at the time. Gross merchandise sales is a non-GAAP metric. We use it to express the total demand across all of our web sites and stores. This number measures the dollar value of the orders placed in the year before accruing for certain items such as returns, and it ignores certain timing cut-offs that are required by GAAP for revenue recognition purposes. If we were a public company, we would have to reconcile gross merchandise sales to the nearest GAAP metric (net sales), but we are currently a private company so the gross merchandise sales number should be viewed just as an interesting number that we want to share with our friends. This presentation contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by the forward- looking statements and assumptions. These risks and uncertainties include, but are not limited to, the risk of economic slowdown, the risk of over or underbuying, the risk of consumers not shopping online or at our web site at the rate we expected, the risk of supplier shortages, the risk of new or growing competition, the risk of a natural or some other type of disaster affecting our fulfillment operations or web servers, and the risk of the world generally coming to an end. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Zappos.com assumes no obligation and does not intend to update these forward-looking statements. Congratulations on making it through all the fine print. If you enjoy fine print, look for openings on our legal and finance team at jobs.zappos.com.
