This Was As Good a Presentation About How to Run a Successful Business Than Any I Have

Zappos

This was as good a presentation about how to run a successful business than any I have ever heard. Keep this presentation in a file. Back it up . If you are ever asked to give a business presentation about what is important for running a successful enterprise… this is the model.

The Culture Book is particularly interesting (they are on the way and we should have them when you return from holiday).

Please watch the videos in the Zappos file..particularly the 60 minutes and Oprah pieces.

Their web site is an excellent model for how to do e-retailing (almost as good as Gap…yes Gap). If you want to keep up with the latest and greatest on e-retailing watch those sites).

I am planning a for credit trip to Zappos next Oct Break…(DC in KY…fly to Las Vegas…spend a day at Zappos…spend a day at MGM or Mirage (seeing what they do)…some free time…home.

Here is what you learned:

·  Zappos is powered by service (This is on all their product mailing packages): providing the best service and online shopping experience possible, free shipping both ways, 365 day return policy, fast fulfillment, expedited delivery, fast, friendly and expert customer service

·  Zappos is committed to wowing each and every customer.

·  75% of customers repurchase (I do not know if they have done the research but I would ask them to find out why the 25% don’t come back…missed sales reports)

·  2.5% of people in US shop Zappos

·  Most new customers acquired heard about Zappos by word of mouth (43%). Treat each customer as an individual and special creating an experience. (This suggests social media campaigns..viral marketing…youtube…flickr…facebook.. etc)

·  Zappos posts their phone number on every single page of the website

·  Zappos refers customers to competitor’s website if they do not have the product the customer wants. Customers remember this and come back to Zappos.

·  Zappos has one warehouse in KY which runs 24/7. (equivalent to 18 football fields)

·  As long as you have the service, you can sell anything.

·  Founded in 1999

·  Zappos has over 1100 brands, 150,000 styles, and 3 million pairs of shoes

·  Repeat customers order 2.5 times in next 12 months

·  Warehouse receives orders within 4 hours of being placed

·  After the 5 week culture program, Zappos offers the potential employees $2000 to walk away right there if they don’t feel like they fit. Only 3% actually take the offer

·  Customer service is an investment, not an expense.

·  Every employee goes through customer loyalty training and has to do at least 40 hours on the phone with customers.

·  24/7 800 number on every page.

·  No call times measures (this is very important. Many call centers have calltime goals (usually short because that increases productivity. If these companies then say that customer sat is important the reps are getting mixed messages and will do the thing that gets measured- usually calltimes) , no sales-based performance goals for reps.

·  Reps have the power to do everything that managers can do for the customer

·  85% internet advertising

·  Commit to customer service, live and deliver the wow, come up with committable core value, make wow part of your company’s everyday vocabulary, remember that customer service is an investment…not an expense, trust and empower your customer service team, create a culture book, great service to everyone, make culture part of everyone’s performance review, have the entire company celebrate great service.

·  Most important: wowing the customer-word of mouth will result

·  Product sells itself. Zappos is there to help them find it

·  Commitment to core values is what drives the group: making a personal/emotional connection with customer, doing more with less

·  Be yourself-easy to tell when someone doesn’t care much

·  Obvious that everyone working there wants to be there and is committed

·  Employees are treated well and work well in return

·  99% of customer will receive shipment within 24 hours

·  Great training classes-everyone gets a feel for all aspects of the company

·  Keep the work culture fun and like a family-it keeps people coming back to work and excited to be there-leads to better customer and c-worker interaction

·  Everything sold on the website is actually in stock

·  Use quality analysis team to evaluate their customer service reps

·  Customer loyalty is very important. Repeat customers have higher average order sizes

·  Loyal customers become advertisements. Be nice to your customers so they speak highly of your business

·  An average call is 5 or 6 minutes, which is higher than the industry standard

·  In DC (for those of you not in retailing that is Distribution center) Robots take the product to a person who packs it

·  Zappos uses multi-angle photography when capturing their shoes. This gives a more in-depth look at the product making the customer more comfortable with the purchase

·  Advertising spending runs 85% on the internet and 15% in print.

·  Zappos is a company that offers as much personal growth as well as company growth that they can handle

·  7.4 million total purchasing customers

·  Zappos hopes to increase their sales from $850,000,000 in 2007 to $1 billion in 2008

·  Zappos is considered more of a service company that happens to be in the online retail industry

·  Serena Williams is just one famous person they use to wow their phone customers through messages (Try the joke of the day)

·  The company encourages unsure customers to purchase more than 1 pair because of the free shipping (I did not ask…what percentage of customer return those second and third items?)

·  Zappos asks interviewees how weird they are

·  Be open-minded about career options when interviewing: where you start is not where you end up, don’t hold yourself to a certain job

·  They look for people with varied backgrounds….having experience and experiences is important (If you were going to highlight that on your resume how would you do it? – (first 10 responses that are effective get extra credit)

·  They take about 5000 calls a day (5000 x 365= a lot of calls)

·  Didn’t come up with core values just because they sound good

·  Nearly 4 million items in warehouse

·  New vocabulary: a Zapposer is someone who works at zappos.com

·  Now sells not only shoes, but also handbags and electronics (You can increase business by selling more of the same thing…selling the same thing to more people…or increasing your share of the customers wallet by selling different things). (Did you hear them say electronics returns during a year period allowed).

·  Zappos is devoted to customer service as the basis of their mission – it’s not just one department, it’s the entire company. It’s not the product, it’s the service.

·  Zappos encourages people in its culture to be adventurous, creative, open-minded, passionate, determined, humble and to create fun and embrace change

·  Zappos has an intensive screening process to only capture and keep the true wow-ers.

·  There are no limitations on expense when it comes to serving a customer and correcting a problem that might not even be Zappos fault, but they make it their problem to make sure the customer is satisfied.

·  Zappos is not a business, but also a culture

·  Interviews are 50% based on core values and culture fit

·  They have a joke of the day. This helps build a comfortable relationship with their customers.

·  They have sent flowers to customers before who they knew were going through tough times. Pretty impressive for such a large company.

·  Advertising through the internet is inexpensive and very efficient

·  Give great service to everyone: customers, employees, vendors, investors

·  Monitor calls to ensure customer satisfaction – must make a personal connection, ask if they need anything else, and give correct information

·  Because Zappos offers free shipping, customers can order shoes in multiple sizes, try them on and return the ones that don’t fit. This ensures the customer will actually be more likely to keep a pair of shoes, instead of purchasing, returning and just giving up.

·  Employees have a personal choice on their growth and learning in the company

·  The way a customer is treated directly impacts their impression of the company

·  Only 6-7% of customers ever call in

·  Culture in business is one of the most important things to create a positive and enlightening place to work, which creates great customer service

·  Be good to everyone in your business. It will make your job easier to do if you are good to people

·  Open door policies with everything. No cubicles or walls.

·  Zappos return policy applies to all merchandise except electronics

·  First-time customers spend on average $111.98 (goes to $170 something on repeat purchase- this is a very important metric).

·  Been on Oprah, 60 minutes and Night Line

·  We are a service company that happens to sell everything

·  3.3 million have purchased in last 12 months

…and so it goes…good work

Yo