I had a "holy shit" moment when I first ordered from Zappos.
This happened over a decade ago. I chose the slowest shipping option to save money.
I expected the shoes to arrive in 7 to 10 business days.
My shoes arrived the next morning.
Remember this was it Years before Amazon made 2-day shipping the standard.
There were other little things that I noticed about Zappos as a customer.
- Other companies hid their customer service phone number to save costs. Her phone number was at the top of each page in bold.
- I called customer service expecting the agent to be overseas. No It was in Las Vegas.
- Most companies had a 30-day money-back guarantee. They had a 365 day money back guarantee.
Zappos set the standard for customer service on the Internet. Because of their initiatives, the rest of the e-commerce world had to improve their game.
Its former CEO, Tony Hsieh, was the heart and soul of the company.
For those of you who don't know, Tony Hsieh passed away last week at the age of 46.
I usually don't pay too much attention when a celebrity dies. But Tony's death felt different. I lost a big brother I never met.
I read Delivering Happiness in 2010. It was the first biography I ever read. As I researched and went through my notes, I did not know how many of my personal philosophies were based on his.
I didn't just want to share a picture of him on social media. Tony spent so much of his life sharing his wisdom. The best way to honor him would be to keep his teachings alive.
The following are some of the best lessons I learned from Tony Hsieh.
The value of customer service
“To make WOW, you have to differentiate yourself, which means doing something unconventional and innovative. You have to do something that is beyond expectations. And whatever you do has to have an emotional impact on the recipient. We're not your average company, our service is not average, and we don't want our people to be average. We expect every employee to deliver WOW. “- Tony Hsieh, CEO @ Zappos
Every company want having great customer service but none of them are willing to do what it takes.
Zappo is known for its customer service. At first, it wasn't a conscious strategy. You were broke and couldn't afford marketing.
The levers for business growth are simple:
- Get new customers
- Increase the average order value
- Increase repeat purchases
They couldn't afford to get new customers. Their inventory was limited so it was difficult to increase the average order value.
They realized that improving their customer service would encourage existing customers to return.
Now, "good" customer service doesn't just answer emails faster.
Tony's goal was something that "Wow effect.”
In this case, there is a huge difference between customer expectations and what actually happened. This difference causes a flood of positive emotions. The positive emotions lead to word of mouth and repeat purchases.
Here are various ways you can "inspire" your customers:
- They'd upgrade people to free overnight shipping.
- They manned camps around the clock. This is not cost efficient from a logistical point of view. However, this meant they could complete orders a few hours early.
- They put their customers' happiness above their own profits. If the customer wanted a shoe that size was out of stock, the agent stopped and did some research. If they found it available on a competitor's website, they encouraged the customer to buy it there.
- One woman had sick feet. She ordered 6 different pairs of shoes and returned them all. Zappos sent her flowers to get well.
Yes, these things cost money. But it worked so well that they didn't have to spend as much money on marketing as their competitors.
75% of their orders came from repeat purchases. A great experience means that people are more likely to recommend their friends.
A few years ago I visited a workshop for a commercial apprenticeship. The material was good, but I had to think about how little effort they went into. I spent several thousand dollars on the workshop and they didn't connect us with lunch.
Later I started my Super Affiliate Intensive Workshop. I was motivated by Zappo's philosophy of the "wow" effect. I sat down and thought of all the little things we could do to give people a “wow” experience.
This resulted in:
- I think everyone is nervous when they fly the first night. We had a welcome party at the hotel bar. We also had a farewell party on the last evening.
- The events took place in a beautiful hotel. Every lunch and dinner was catered for.
- We had bags of copies of cashvertising, USB sticks, etc.
- A folder full of slides, notes, etc.
We calculated that giving the “wow factor” costs me an additional five digits for each event. I didn't care. I did it because I wanted to develop from a workshop into an unforgettable weekend experience for people.
You don't have to spend a lot of money to get the wow factor. Here is a story from that weekend.
I recently ordered a succulent from Etsy and had a wow experience.
The plant was carefully packed. She included a handwritten note thanking me for helping her business. She threw in a few stickers of succulents.
I will buy all of my succulents from her from now on.
My fiancé is into Korean skin care. One of her favorite websites, Sokoglam, offered her a zoom consultation with a skin care professional. She learned so much about her skin and is now a loyal fan of their website.
The online shopping experience is increasingly becoming a commodity. We go online and with one click click on anything we want from Amazon.
Going the extra mile for your customer is one way to stand out in a crowded world.
The Similarities Between Poker and Business.
After selling LinkExchange to Microsoft for $ 265 million, Tony began to delve into poker. He spent an entire summer delving deeply into poker strategy and analysis. What fascinated him were the similarities between good poker strategy and good business strategy.
Here are some of the highlights he shared:
1. Do not confuse the right decision with the individual result.
It is possible to make the wrong decision and get a good result.
It is possible to make the right decision and lose.
Imagine receiving AA before the flop. This is the strongest pre-flop hand in poker. The guy has 10 10. The result? He got lucky with a 10 on the river that gave him a triple 10.
You would win 81% of the time.
You made the right decision, but it was the wrong result. The worst thing you can do is change your future behavior based on it.
This happens all the time in the real world. It reminds me of survival bias or anecdotal evidence.
I worked in a gas station. People came in every day to buy scratch cards. One of my regular customers paid $ 1 and won $ 100.
This is an example of a wrong decision with a good result. Do you think he walked away with his winnings? No This is how they get you. That encouraged him to play the lottery more. He thought he was lucky.
He ended up spending several thousand dollars that summer before quitting. He didn't get his money back.
2. Table selection
When choosing a table, you choose which table you want to sit down at and play. This is the most important decision you can make in poker.
Would you rather play at a table with 9 mediocre tourists who are drunk or at a table with 9 freshly emerging poker pros?
This applies to choosing the markets in which you want to operate.
Think Goldilocks … it has to be spot on.
You want to conduct a pet training program that focuses on raising tigers. The market is too small.
They want to compete with Amazon and Walmart by offering the lowest prices. That could be too competitive. It's like volunteering at the same table with Phil Ivey and Daniel Negreanu when you don't have to. Also, you don't have the right bankroll for the table.
Tony realized that there were several advantages to the business of table selection. He could create create your own table aka your own market. It reminds me of what Cameo did.
A poker table has ten seats. In business, you can increase the size of the table. He entered the existing shoe market and made the table even bigger. Poker is a zero-sum game.
3. Don't play games you don't understand, even if you see lots of other people making money from them.
Tony did a little bit of day-to-day business and stocks. He hated it because he didn't understand. He had no advantage. And he realized he wasn't building anything with trading.
An example from my own life is real estate. I've been pressured to buy real estate from my parents and other people for a number of years.
Do people make money with real estate? Yes. It's a great investment for the right person.
But not me. I am not "practical". I have no advantage.
Could i learn For sure. At what price? I prefer to spend this time and energy getting stronger at the things I'm already good at.
I could invest $ 150,000 in a house to rent out. Better option? I could invest this money in online businesses where my skills can help grow it.
This reminds me of the Bright Shiny Object Syndrome. When jumping from one store to another, you don't go deep.
When you go deep, you build unique knowledge.
Don't outsource your core competency
Zappos started drop shipping brands in America.
A customer would place an order.
Zappos would send a message to the shoe company.
The shoe company would send the shoes directly to the customer.
The problem? That was in the late 1990s. Not many retailers have had the ability or desire to dropship.
This meant that Zappos did not have a full range of shoes. You certainly didn't have many shoes that customers actually wanted.
It would take years to build some of these relationships with the shoe companies. They found a "hack". You could buy a local shoe store that wasn't doing so well. This would mean they are "grandfather" in many relationships with bigger brands.
Her office lobby pretty much turned into a shoe store to make it official.
Next, they switched from a dropshipping model to being on stock. They have teamed up with a company called eLogistics to take care of their warehousing.
It was a disaster.
They lost 5 digits a day because sellers oversold what their company could actually do. Tony and several employees moved to Kentucky for a few months to build their own warehouse.
“We have learned that we should never outsource our core competencies. As an e-commerce company, we should have considered warehousing as our core competence right from the start. It was one of our biggest mistakes to outsource this to third parties and trust them to look after our customers as much as we do. "
So many companies want to outsource different parts of their business. You can work with a 3PL to get your fulfillment done. You can work with different agencies to handle your marketing. You can hire headhunters to recruit your employees for you.
Find out what your core competency is and keep it in house.
Getting the culture right
Culture is such a catchphrase in the technology world.
It is not a set of values that top executives develop at a corporate retreat. Culture is not lunch and bring your dog to the work day.
It is a set of values, goals and attitudes shared by an organization. So treat yourself daily.
Tony realized the importance of culture when he built LinkExchange. They hired the smartest people they could find. Not all of them were a great fit with the culture. It was obvious that some people were just there for the money.
It created a toxic environment for him that was afraid to come to work. He knew there was a problem when he hit the snooze button seven times one morning.
At Zappos, he wanted to develop and protect culture at all costs.
One thing that Zappos is amazing at is filtering out people who don't fit into a great culture.
You must pass both a technical test and a culture test. They don't want assholes to work in the company. Zappos is based in Las Vegas. You have a lot of people flying in for an interview and they are picked up at the airport.
Everyone thinks the recruitment test starts as soon as you sit in the office. What actually happens is the chauffeur takes notes on how you treat them. Someone who treats a driver like shit is not someone they want to hire.
Everyone who is hired at Zappos goes through the same 4-week training program. This includes two weeks of customer service on the phones. This means that you will have to help pack the boxes. It doesn't matter if you are Vice President!
Finally, there is the famous $ 2,000 test.
Every potential employee goes through 4 weeks of intensive training. After that they get the offer.
The offer is $ 2,000. They'll pay you $ 2,000 to cancel.
Tony believed this was the best way to filter people out. When someone is overwhelmed by the experience, this gives them an easy way out.
It reminds me of dating. Some people have "tests" to see if the person is a suitable partner. Tony did this because he wanted to find a suitable employee.
Resumes and interviews can only go so far. You can see how proficient they are during the workout.
But such an offer? It's the final test to see if you have a good culture fit.
So my question is what kind of culture do you want to build in your company?
How are you going to filter for that?
Are you ready to do what it takes?
You cannot be good at everything. A strategy is about consciously choosing what you can do and what you are willing to sacrifice.
Zappos has some of the best customer service in the world. Can you name a single memorable message from them? I can not. If they don't invest in marketing, they can put more resources into customer service.
Costco's strategy is: low prices. That said, their bearings are ugly. Your website is terrible. These choices contribute to low prices.
Noma has been named the best restaurant in the world four times. They had 2 Michelin stars. They had a waiting list for months. Then he closed the restaurant.
Why would the owner do such a crazy thing?
"Routine can be comforting, but it's also a killer for your creativity," says Redzepi over lunch at Barr Restaurant, which is now on the original Noma site. "It was time not just to change the physical address, but to give up the old routine, move into something new and build a small urban farm."
In memory of Tony Hsieh
I did a lot of research for this article. I scanned Delivering Happiness again, read a dozen articles, and watched every speech he made that I could find on YouTube.
I couldn't think of what influence it had on my thinking. I read Delivering Happiness when it first released in 2010.
I looked up at Tony because I didn't have many Asian-American role models. Yes, there are Asians in technology, but most of them are behind the scenes as developers.
Here was Tony as the face of a billion dollar company. For me he was the Bruce Lee of entrepreneurship.
For the longest time I believed that getting rich was the key to happiness. That's how society made me think. It is this mentality that has pushed me so much to be successful in affiliate marketing.
And then I became a millionaire when I was 24. I was a little happier because I no longer had to worry about debt. But it wasn't this life changing thing that I was expecting. Then I looked it up Bring good luck.
Whoa, here's something that went through the same thing. With a lot more money, of course.
That led me on a journey to study happiness even. Reading the book gave me the courage to realize my dream of living in Asia for a few years.
Thanks Tony. Thank you for not being apologetically weird. Thank you for showing me that you can build a brand while remaining humble. Thank you for showing everyone the need for a higher purpose in life than just making money.
Photo of Web donut from Pexels.