SXSW Opening Remarks with Tony Hsieh

14Mar09

Austin, Texas

Tony Hsieh is CEO of Zappos.com the world’s largest online shoe retailer.

Approx half the room has purchased from Zappos. 2-1 Female/male buyer ratio.

(I’m sitting near Darryl Orht from Plaid.)

Tony originally co-founded another dot com that was sold to Microsoft. Left when lost desire to turn up to work.

Zappos was a company he invested in (one of several) then decided to work in.

Zappos is about the brand and excellent customer service. Doesn’t see it staying as a shoe retailer only. Could be an airline in the future.

Recognised as Best Company to Work In in 2009.

75% of orders are from repeat customers. Put most of the marketing budget into the customer experience.

Now a $Billion sales company from zero in 1999.

Encourages customers to order multiple sizes and return wrong size. 365 day return policy.

Not about shoes. About customer service. Gave up 25% of top line revenue to concentrate on this approach.

Loyal customers get shipping upgrades, Ie overnight shipping to WOW them. They consider the cost to be marketing.

Number 1 priority is company culture. If get that right then the other things will follow. The new hires must fit the culture despite qualifications.

They have a 500 page Culture Book. Paragraphs from employees discussing their culture. Prospective employees get to read it.

Twitter has become important to Zappos. Learned it at SXSW 2007. Went from finding out about great parties to tracking friends to rolling it out to entire company. Employee training includes learning Twitter. 400 of the 700 employees in Las Vegas on Twitter. Use it internally for social networking plus with customers. Improves company culture.

Culture and brand are the same thing to Zappos. Ie. the airline industry is known for bad customer service and their brand is stuck with it.

Want to own the 3 C’s: culture, clothing, customer service.

“Happiness in a box” said one customer letter. And so Zappos aim at “delivering happiness”.

What is Zappos culture. Committable 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 & learning

6. Build open and honest relationships with communication

7. Build a positive team spirit & family spirit

8. Do more with less

9. Be passionate and determined

10. Be humble

Its important for whole company to be in alignment to work.

How to create a long term sustainable brand:

#1 Decide if your trying to build a long term sustainable brand

#2 Figure your values and culture (personal & company)

#3 Committing to transparency Ie. twitter, ask anything newsletter, extranet for  vendors, tours and reporter visits, Zappos insights newsletter service

#4 Vision – “Whatever you’re thinking, think bigger” everyone involved can sense the bigger cause. Chase the vision, not the money Ie. craigslist.com

“What would you passionate about doing for ten year even if you never made a dime”

#5 Build relationships (not networking) Be INTERESTED not INTERESTING

#6 Build your team – “If you want to go quickly go alone, if you want to go far go together” – Al Gore

# 7 Think long term – repeat customers, customer service, There’s no “get rich quick” formula

Happiness

Most people are not good at predicting what will make them happy. Tony researches how to achieve happiness for all involved.

• Perceived control

• Perceived progress

• Connectedness

• Vision meaning (be part of something bigger)

3 types of happiness

• Rock star – always chasing next high

• Flow – engagement, time flies

• Meaning/ higher purpose – being part of something bigger than yourself

• Should do this in reverse. Meaning – Flow – Rock star pleasure

Conclusion: get the happiness right for you and company then the rest will follow.

Email tony@zappos.com for copy of the presentation.

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