“Our number one priority is company culture. Our whole belief is that if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own.”
This is a quote from Tony Hsieh, CEO of Zappos. Shoe selling shouldn’t come to mind when you hear the name Zappos. While the company does sell shoes and other retail goods, it’s not what it sells that makes Zappos successful. It’s how it sells (that is, what it does for its employees and customers) that makes Zappos what it is today. The company has revenues in excess of $1 billion annually, and in 2009 Amazon acquired Zappos for an astonishing $1 billion.
The acquisition by Amazon wasn’t your typical transaction where the founder and team got rich, retired, and you never heard from the company again. Today, nearly seven years after the acquisition, Zappos has not changed and the people that hit the big $1 B back in 2008 are still the ones sustaining the company culture.
This blog is not about Tony Hsieh, nor about Zappos and it isn’t about shoes. It is about what Zappos represents and how their example can benefit other businesses. Hsieh discovered that the company culture is the biggest driver for business. And here’s why.
Putting the Customer back in Customer Service
There is customer service and there is Customer Service. More often, companies seem to have a customer service or contact center because they think they should. Granted, a real-time customer service is better than a tape that says what numbers to dial, only to be redirected to the next tape. However, many companies overlook the fact that customer service is a strategic choice, which can make or break a company.
How many examples do we know from companies that (supposedly) say that they are pro-active on social media and telephone? They are ready to help you with all of your questions, complaints and comments, but in the meantime they will do whatever it takes to let you wave your white flag and surrender. What they are left with is a lot of irritated customers who are ready to burn them alive. In a time when disgruntled customers are digitally armed to the teeth, companies have the chance to turn disappointment into an opportunity and exceed their expectations. It is time that we put the customer back in customer service.
Fortunately, there are exceptions. Well-known examples include Dutch online retailer Coolblue and the Dutch airline KLM, who go the extra mile with their pro-active customer service and try their best to deliver a wow experience for all their customers. This is largely in line with the vision of Tony Hsieh and Zappos, where “delivering happiness” is the basis of every (business) decision. For Zappos, everything started with looking at the pains customers were experiencing and the options they faced when making purchase decisions. In 2003, they turned their business model upside down toward a customer-centric organization powered by service. After ending their drop shipping activities, which were stopping Zappos from delivering great service, and taking control of its inventory, the new customer service program resembled that of industry retail giant Nordstrom where the customer experience was paramount. Leaders of both companies stated that this focus had a direct correlation with increases in customer loyalty, repeat business, and word of mouth, as well as increased revenues. Therefore, it should not come as a surprise that 75% of Zappos’ orders come from repeat customers.
Almost immediately after the turnaround, the Zappos team noticed a difference. Customers weren’t the only people singing Zappos’ praises. As a result, employees were more engaged and passionate as well. The new focus gave representatives a vision they could stand behind. Customers could hear the passion of the person on the other end of the line. They cared.
They cared. Maybe these two words are the best way to describe the way employees should act toward customers. You can imagine that this change in attitude affects the company culture. Ultimately, the entire staff creates a culture, not just the customer support department. That the strategic focus on customer intimacy, especially in this time, is far from a hail Mary is shown by the results of Zappos. By the end of 2004, the Zappos team realized that focusing on customers and their experiences had not only boosted revenues by 600%, but doing so also created a global community of enthusiasts and advocates for the Zappos brand. A culture was born.
Research and performance made it clear that improving the company culture affects the happiness and engagement of employees, which ultimately has an positive effect on customer happiness.  Keep in mind that we are not only talking about improving the happiness of the people with headsets and the ones handling Facebook. We are talking about the whole staff. It takes every single employee to make a culture come alive.
So, what can you do for your business? Good question! Determining your strategic value discipline starts with getting your core values straight. These are the foundation for every future business decision, or as Tony puts it:
“We formalize the definition of our culture into 10 core values at Zappos. And one of the really interesting things I found from research is that it actually doesn’t matter what your values are, what matters is that you have them and that you align the organization around them. And the power actually comes from the alignment not from the actual values..”
Tony states that your company’s actions should represent its core values at all times to create, sustain and continuously improve your company culture. After you made this relatively simple yet important step, it is time to keep your promise! Some tips:
- Let employees be themselves (as long as it fits the culture and is work-appropriate, let them get that pink Mohawk!)
- Let employees explore their passions and express their creativity (give personality a podium to shine)
- Empower employees with tools to succeed (coaching, involvement, team building; stimulate happiness)
- Provide opportunities for continuous learning and inspire (ever heard of holacracy?)
- Allow employees to fulfil their higher purpose (stimulate personal vision and ambitions and align them with your company’s core values to maximize the gains for both parties)
At Virtuagym we cherish our start-up culture as we believe this is one of the key elements to our success. We have a flat organization, we highly encourage personal development and initiative, and we are constantly working to enrich our culture based on employee feedback. In the meantime, we separate ourselves from competing companies looking for talented people, by focusing on employee happiness.
Naturally, employee happiness will affect the happiness among customers, because they will have more fun doing their job. Delivering happiness doesn’t have to be hard. It is actually pretty easy. The small things in life can make a huge impact and boost customer loyalty in the long run. Pro-active communication (throw away the corporate play book!), giving unexpected extra services (create a wow experience), be human, act human (stay humble). I am sure you can think of a few more actions that would wow you.
A great example of delivering happiness, instead of driving sales, is the record for the longest customer service phone call ever. Guess who set this outrageous record.. Yup, Zappos! Believe it or not, but the phone call lasted a good 9 hours and 37 minutes and all the customer and the Customer Loyalty Team member Shaea talked about was life, movies and favourite foods. Shaea stated: “Sometimes people just need to call and talk,” she said. “We don’t judge, we just want to help.”
This is exactly what makes the difference between delivering happiness and just doing your job. Passion, fun and a sprinkle of (personal) happiness will boost your brand image and drive your sales in the long run.
In this modern society every business should think twice about embracing customer service. If you do it, make sure you do it right. It can affect both your internal and external organization for better or for worse. This doesn’t mean you have to invest a boatload of money in your company culture, nor do you need to have a lot of employees. No, it is about changing your mindset and making the strategic decision whether or not you are going all-in on customer intimacy. It is a top-down commitment, but every employee should be willing to commit as well.
Setting your core values is paramount to build a blossoming company culture, after which your (business) decisions (e.g. hiring process, employee happiness) will determine your commitment to them. These critical milestones will set you well on your way to build and/or sustain and improve your company culture. Just remember: great customer service or building a long-term enduring brand will just happen naturally on its own, when you get the culture right.