CX Stories

Million dollar CEx lessons from Tony Hsieh, CEO and Founder of Zappos

Written by Sonal Jaiswal | Evangelist, Customer Guru

“Zappos is a customer service company that just happens to sell shoes.” – Tony Hsieh.

This week we have some million-dollar customer experience lessons from Tony Hsieh – the CEO of  Zappos, which is widely believed to be one of the most customer centric companies ever! The quote above explains the tremendous customer centric nature of Zappos.

Zappos has been the centre of many delightful stories where its employees went more than the extra mile to help customers. And its customer-focussed nature comes from none other than the CEO himself.

Zappos is truly a revolution when it comes to customer experience. At Zappos, unlike in most other call centres, call times are not measured. Generally, most other service centres measure the time in order to understand how many calls an executive can take. But at Zappos, what matters is an executive creating an emotional bond with the customer.

Here are a few quotes from Tony Hsieh on how to achieve excellence in customer experience.

“Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand. For individuals, character is destiny. For organizations, culture is destiny.”

Such a profound thought that an organization is analogous to a person. Just as lot of effort goes in transforming a child into a mature and responsible adult, converting any organization into an organization with values, character and the focus on customer-experience requires tremendous effort and resources.

Zappos leaves no stone unturned in finding the people that they believe are the right fit into their culture. And they don’t hesitate to let go those who, despite having all the credentials, don’t fit in the culture. Also, it has a core customer-centric value system, and it is willing to hire, and fire employees based on it.

“Over the years, the number one driver of our growth at Zappos has been repeat customers and word of mouth. Our philosophy has been to take most of the money we would have spent on paid advertising and invest it into customer service and the customer experience instead, letting our customers do the marketing for us through word of mouth.”

Only pumping in money for marketing and advertising will seldom help. It may attract first time customers for you. But, if your product/service is not up to the mark, the customers will not stay. But, it is the repeat customers that are the treasure trove of revenue-generation. It is 6-7 times more expensive to acquire a new customer than to retain an old one.

75% of the purchases of Zappos comes from repeat customers! Isn’t that an awesome stat to maintain?

“We must never lose our sense of urgency in making improvements. We must never settle for “good enough,” because good is the enemy of great.”

Mediocrity is the enemy of excellence. No better way to put that than this!

“At Zappos, we really view culture as our No. 1 priority. We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself.”

Here is what happens at Zappos. Post the initial two-week period, employees are offered $2000 to leave the company. Hsieh believes that those who stick on, despite the offer, are the ones who really want to make a difference to people’s lives, spread happiness and are the right fit in the culture.

Also, Zappos is a quintessential example of a company that established the customer-centric culture right from its early days. It is a well-known fact that Hsieh personally interviewed his first employees to ensure that they fit in the culture.

Zappos also believes in giving ownership to its employees and empowering them. It has no script for the employees and the employees are free to do what they think is the right interests of the brand. Is that not a welcome change from the general scenario all around?

Are there any other such business leaders that have inspired you make your organization more customer centric? Let us know and we will be more than glad to bring in some lessons from them!

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