Discussing Zappos’ Culture With Tony Hsieh

As I mentioned in my post about popular customer experience topics, I’m currently researching best practices for the 3rd principle of Experience-Based Differentiation: Treat customer experience as a competence, not a function. It’s a topic that I sometimes call customer-centric DNA.

As part of that research, I’m interviewing a number of executives. So I reached out to Tony Hsieh, the CEO of Zappos, a company that’s renown for its great customer service.

Given our schedules, Tony and I ended up speaking on Monday (Memorial Day) morning at 10:30 AM EDT (7:30 AM his time). I checked out Tony’s twitter right before we spoke and found this tweet:

About to do a conference call. Way too early to be awake, couldn’t find another time to do it. Getting out of bed was not easy. Red Bull!

So let me start by thanking Tony for getting on the phone so early on a holiday. That shows his commitment to getting the Zappos word out!

How good is Zappos’ customer experience? Well, my wife loves Zappos. And my mother-in-law, after finding out about my discussion with Tony, excitedly told me that she loved Zappos because “it is so easy it use.” She once ordered a pair of shoes at 10:00 PM and was amazed to receive them before noon the next day.

Those are not isolated impressions about Zappos; the retailer has a lot of adoring customers. As a matter of fact, Tony shared an interesting fact with me: the company’s Net Promoter Scores (NPS) are so high that they do not provide any guidance on areas for improvement.

Well, the interview was great. Tony was open, informative, and inspiring. Here are some of the interesting factoids from our discussion:

  • The company’s culture is defined in its ten core values that include items like “deliver WOW through service” and “be humble.”
  • Tony felt funny when the company codified those core values, because it felt a bit too corporate. But he realized that it needed to happen given the company’s growth.
  • Tony doesn’t want to prescribe actions for employees that show how much Zappos cares about customers; he wants employees to do things because they genuinely care about customers. 
  • Zappos uses its culture as a reason to hire and fire people. All new hire candidates have a separate interview with the HR department that focuses just on cultural fit.
  • New employees go though 4-5 weeks of training that includes education about the culture and spending time on the phone with customers.
  • To ensure that employees have a strong fit with the culture, new employees are offered $1,000 to quit after their first week of training. That way they weed out the people who aren’t committed to working at Zappos. Hsieh didn’t feel like enough people were taking the company up on its offer, so he discussed raising the bonus to $1,500.
  • Every year Zappos publishes its “Culture Book” in which all employees are encouraged to write about what the culture means to them.
  • Tony recognizes that cultures often go downhill when companies scale. He wants Zappos’ culture to get stronger as it grows.
  • Tony offers this advice to Zappos employees: It’s completely up to you guys. I can’t force the culture to happen; so part of your job description is to display and inspire the culture.

I asked Tony if I could share some of our discussion in my blog. He said yes. Why? It met his basic principle for deciding what he’s willing to share:

Would sharing it make the world a better place?

The bottom line: Most firms would be a better place if they were more like Zappos.

About Bruce Temkin, CCXP
I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and Emeritus Chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

16 Responses to Discussing Zappos’ Culture With Tony Hsieh

  1. Amy Madsen says:

    Thanks for an interesting post on Zappos. We have linked it to the Net Promoter discussion forum. Should any of your readers want to learn more about Net Promoter, we’d like to kindly direct them to http://www.netpromoter.com for discussion forum, blogs, newsletter, general info, job board, and more.

  2. Randi says:

    Every time I read something about Zappos, the message is consistent, whether it’s from the customers or the CEO. Zappos has risen above not only their competitors, but across and above industries. When will other companies take notice and start implementing changes in their organizations? If the customer is as important as many companies claim, what are they waiting for? They have a model in Zappos, and as Nike says, Just Do It! Your customers will thank you for it!

  3. Bruce Temkin says:

    Amy: Thanks for linking to the post. When I discuss Net Promoter in my blog, I usually do it in the context of Voice Of The Customer (VoC) I’ll be posting about Net Promoter over the next couple of weeks, so stay tuned.

  4. Bruce Temkin says:

    Randi: Great questions. I work with many large organizations to help them deliver better customer experiences. While there are still a myriad of issues, companies are starting to take the topic much more seriously. To really make a difference with customer experience, it needs to be seen as a transformational effort which spans at least 3 years. To better understand my point of view on this, I suggest that you read My Manifesto: Great Customer Experience Is Free and Experience-Based Differentiation.

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  6. penelope g says:

    I’ve been researching on this topid and yes, Zappos got it right! And what amazes me more is Tony himself; being an introvert (or he seems to me), he truly lives and believes in his mantra that it’s up to the people and its his people who will carve the culture and make a difference.

    Thanks for sharing your discussion with him.

    Penelope
    VP – Talent & Performance
    Al Rajhi Bank

  7. Loved this article on Tony Hsieh and Zappos. Very inspiring to how business and relationships ought to be around the world!

    Emmanuel
    Motivatorman

  8. Bruce Temkin says:

    Emmanuel: Thanks for commenting.

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  10. April Frantz says:

    Hi my name is April……. and I would like to know what I can do to get involved with zappo. I would like to be able to talk to Tony or e-mail him personally. I live in Indiana and I would love to start a zappo company where I live….. I love challenges and love helping people to be happy in life. If you could please give this message to Tony Hisch knowing he has someone who would love to start a zappo company I would greatly appreciated it so much. You many e-mail me at sunnddie3@hotmail.com Thanks so much and would be excited to here from you Thanks April

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  14. anne says:

    Tony Hsieh is a remarkable guy. I like the way his leadership style is analysed here – http://www.brandpilgrim.com/2010/08/valuation-of-values.html

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