Zappos Company Culture - The Zappos Family on Nightline

Summary

This Nightline segment highlights Zappos, an online shoe retailer revolutionizing customer service and workplace culture. Despite economic struggles, Zappos thrives by offering a vast selection of shoes and free shipping. The company's success is attributed to its unique culture, combining fun with hard work, and its dedication to top-tier customer service. Employees receive full benefits and undergo extensive training, even being offered money to quit if they aren't passionate. CEO Tony Hsieh fosters a family-like atmosphere, with Zappos expanding beyond shoes into clothing and more, driven by loyal customers.

Takeaways

• 👟 Zappos revolutionized the shoe industry by selling a wide range of shoes online, offering over 1,000 brands and 4 million pairs from a warehouse in Kentucky.
• 📦 Zappos provides free shipping both ways, allowing customers to try on shoes and return them within 365 days if unsatisfied.
• 💼 Zappos’ corporate culture is focused on fun and creating a family-like atmosphere, with a 'work hard, play hard' mindset, including office parties and unique department greetings.
• 👨‍💼 Tony Hsieh, Zappos CEO, emphasizes company culture, aiming for the best customer service and ensuring employees enjoy their work environment.
• 📈 Zappos turned a 5% profit despite a focus on employee benefits, including 100% coverage of medical and dental benefits, free snacks, and a cheerful work atmosphere.
• 🧑‍🎓 All employees, from call center staff to executives, go through the same four-week training to ensure top-tier customer service, and employees are even offered $2,000 to quit if they're not fully committed.
• 🤝 Zappos prioritizes customer service over immediate profit, even directing customers to competitors if Zappos is out of stock.
• 📞 Zappos refuses to outsource its call center, believing customer service is core to its brand and needs to be handled in-house.
• 🛒 Although known for shoes, Zappos has expanded into clothing, electronics, and even cookware based on customer demand.
• ✈️ Some loyal customers have suggested that Zappos should start an airline, which the company hasn't ruled out for the distant future.

Q & A

What is Zappos known for revolutionizing in the business world?

Zappos is known for revolutionizing the online retail experience, particularly in the shoe industry, by focusing on excellent customer service and a unique company culture.

How does Zappos differentiate itself from other online retailers?

Zappos differentiates itself by offering free shipping both ways, allowing customers to return items within 365 days, and providing excellent customer service with a strong focus on customer experience.

Why is Zappos’ call center considered unique?

Zappos’ call center is unique because every employee, even executives, undergoes a four-week customer service training course. Employees are trained to go above and beyond, such as directing customers to competitors if Zappos is out of stock.

What cultural values does Zappos prioritize within the company?

Zappos prioritizes a family-like atmosphere, fun, a little weirdness, and individuality. The company promotes creativity, growth, and learning as part of its core values.

What benefits does Zappos provide to its employees?

Zappos provides several benefits to employees, including 100% coverage of medical and dental insurance, free snacks in the cafeteria, and opportunities for personal and professional growth.

How does Zappos ensure that only passionate employees stay with the company?

Zappos offers new employees up to $2,000 to quit during their initial training. This ensures that only those who are truly passionate about working at Zappos choose to stay.

What is the role of Tony Hsieh at Zappos?

Tony Hsieh, Zappos' CEO, focuses on creating a strong company culture where employees love working and customers enjoy shopping. Despite his success, Hsieh leads with humility and prioritizes customer service.

Why does Zappos choose not to outsource its customer service?

Zappos believes that excellent customer service is crucial to its brand and that outsourcing would compromise the quality of interactions with customers.

How does Zappos build customer loyalty despite sometimes losing a sale?

Zappos builds customer loyalty by prioritizing customer satisfaction over individual sales. For example, if a shoe is out of stock, employees are trained to find it on competitors' websites and direct customers there.

In what ways is Zappos expanding its business beyond shoes?

Zappos is expanding into other areas like clothing, electronics, and even cookware, based on customer suggestions. The company is willing to experiment with new product categories to meet customer needs.

Outlines

00:00

👟 Revolutionizing Shoe Retail at Zappos

The introduction highlights Zappos, a company that's transforming the shoe business. With over a thousand brands and four million pairs in stock, Zappos efficiently ships shoes from its warehouse to customers. Despite humble beginnings, Zappos is now on track to sell a billion dollars' worth of shoes. It creates a lively work environment, hosting parties and fostering a unique company culture that values happiness. Tony Hsieh, Zappos' CEO, emphasizes that the company focuses on building a great culture and providing excellent customer service, which sets Zappos apart in the corporate world.

05:01

☎️ Customer Service and Employee Culture at Zappos

Zappos puts significant effort into training its employees, particularly in customer service. Every employee, including executives, undergoes a four-week training program to learn how to communicate effectively with customers. The company even offers employees money to quit if they don't feel passionate about their work, showing their commitment to creating a dedicated workforce. Zappos instills a culture of fun, learning, and individuality through ceremonies and core values, all while maintaining customer loyalty by offering exceptional service.

Keywords

💡Zappos

Zappos is an online shoe and clothing retailer that revolutionized how business is done by emphasizing customer service and company culture. The video highlights Zappos' unique approach to business, including free shipping and returns, and a focus on customer loyalty and employee satisfaction.

💡Customer Service

Customer service at Zappos is a key element of their business model, emphasizing exceptional care and support. The company invests heavily in training employees to ensure a positive experience for customers, including practices like looking up competitor stock to satisfy customer needs, which fosters loyalty and repeat business.

💡Company Culture

Zappos' company culture is described as fun, family-like, and supportive, with unique elements such as office parties and personalized greetings. This culture is designed to create a cheerful work environment and is integral to the company's identity and success.

💡Free Shipping

Free shipping, both ways, is a significant feature offered by Zappos, allowing customers to order multiple pairs of shoes, try them on at home, and return what they don't want at no cost. This policy reduces the hesitation of online shopping and enhances the customer experience.

💡Employee Benefits

Zappos provides comprehensive employee benefits, including 100% coverage of medical and dental costs and free food in the cafeteria. These benefits are part of Zappos' strategy to treat employees well, which in turn motivates them to deliver excellent customer service.

💡Tony Hsieh

Tony Hsieh, the CEO of Zappos, is portrayed as a visionary leader focused on building a great company culture and customer experience. Despite his significant wealth from selling an earlier company, he maintains a modest lifestyle and an accessible leadership style, reinforcing the company’s values.

💡Call Center

The call center is a central part of Zappos' operations, where actual human beings answer customer calls. This personal touch is a deliberate choice to ensure high-quality customer service, contrasting with the trend of outsourcing customer support.

💡Training Program

Zappos' training program is extensive, requiring all employees, including executives, to undergo a four-week training that includes working in the call center and understanding warehouse operations. This ensures that everyone is familiar with the company's processes and customer service standards.

💡Customer Loyalty

Customer loyalty is a major focus for Zappos, achieved through exceptional service and policies like free shipping and easy returns. By prioritizing the customer experience, Zappos ensures a high rate of repeat business, with 75% of sales coming from returning customers.

💡Core Values

Zappos has ten core values that guide the company's operations and culture, including creating fun and a little weirdness, and pursuing growth and learning. These values are not just slogans but are actively integrated into the daily work environment, shaping the company's unique identity.

Highlights

Zappos revolutionizes shoe retail by offering a wide selection of styles, sizes, and colors, with 4 million pairs in stock.

Zappos is on track to sell a billion dollars’ worth of shoes, nine years after going into business.

The company fosters a strong company culture, focusing on a family-like atmosphere and creating a joyful work environment.

Tony Hsieh, CEO of Zappos, emphasizes the importance of company culture, treating employees and customers well for long-term success.

Zappos offers free shipping both ways and allows customers 365 days to return items, creating a seamless shopping experience.

Zappos’ call center is staffed by real humans who are trained for four weeks to provide top-tier customer service.

Zappos pays 100% of employee medical and dental benefits and provides free food, contributing to high employee satisfaction.

The company encourages fun at work, with events like toga parties and Pinewood Derby races in the office.

Zappos offers employees $2,000 to quit during training to ensure only passionate individuals remain at the company.

Tony Hsieh makes a modest salary of $36,000 a year despite his wealth from previous ventures, focusing instead on Zappos' mission.

Employees are trained to check competitor websites for products if Zappos is out of stock, promoting customer loyalty over immediate sales.

75% of Zappos' business comes from repeat customers, demonstrating the success of their customer-centric approach.

Zappos is expanding into other product categories, including clothing, electronics, and even cookware, based on customer feedback.

Zappos emphasizes employee growth and learning with its core values, ensuring staff engagement and development.

Zappos’ Kentucky Fulfillment Center is a key part of the business, and employees are trained in every aspect of warehouse operations.

Transcripts

Tonight on Nightline, one giant step

The economy may be struggling but from strappy sandals to sexy

From cross trainers to crocs, this shoe store is revolutionizing how business

Gets done

From the global resources of ABC News with Terry Moran, Martin Bashi

And Cynthia Mcfadden

In New York City, this is Nightline

If you're looking for a certain pair of shoes, there's a warehouse in Kentucky

That probably has them. They've got a thousand brands in just about every

Style, size and color

Four million pairs of shoes

24 hours a day they're boxing them up and shipping them out

To shoe shoppers sitting in the comfort of home.

Good morning and thank you for calling Zappos.com

Where Elvis once was spotted in our warehouse looking for a pair of blue

Suede shoes

This is Zappos.com and what Amazon did for books

Zappos is doing for shoes. They're trying to revolutionize how business is done

And how people work. The name is an adaptation of the Spanish word for shoe

And this year, nine years after going into business

Zappos is on track to sell a billion dollars’ worth of shoes

You will have these shoes on Monday by free upgrade

yeah

And they're having a party doing it. One night it was a toga party

Work hard, play hard

Is everybody having a good time? Yeah

Tour the Zappos offices and there's a cheerfulness you won't find

In the dull offices of corporate America

Hi, everybody. Thanks for coming

Every department has its own way of greeting visitors

Zappos' headquarter is in Las Vegas, where they do have office carol like almost

Any other corporation

But right there in the middle, we may have missed him

There he is. Tony Hsieh, the emperor of shoes

With no more office space than Dilbert.

One of the things that's really important for us

Actually probably the most important focus for Zappos is to make sure we have

The absolute best company culture

And part of our culture is just having a family like atmosphere

And at times it looks like one of those

Internet startups that disappeared when the bubble burst

Go! Here's the entire finance department racing

Pine wood derby cars in the office but unlike those failed startups

Last year Zappos made a five percent profit. Not bad

And in multiples how many times more than a call center worker do you make?

I don't have a calculator, but I...

My salary is $36,000 dollars a year, so...

I think someone may make more than me

Some of the people in the call center make more? Yeah

Of course, he can afford it

Just a few years after college, Hsieh sold the Internet company to Microsoft for $265 million dollars

But you wouldn't know it

How many pairs of shoes do you have?

I probably have about 10 pairs right now

But prior to Zappos, I used to have one pair that I would wear for two years until it has holes in it

And then buy the same pair again

So you are not that into shoes I’m not that into shoes

What he's into is building a company where

People love to work and customer like doing business

We would just want to be about the very best customer service and the very best

Customer experience

Selling shoes over the internet would seem difficult

People wanna try them on, see the size and color. Zappos overcame that with

Free shipping, both ways. Order as many shoes as you like

You have a year, 365 days

To return what you don't want. Okay and then once we get it back in

And it can take 48 hours to process back in

But we will refund you for the $41 dollars

And if they treat the customers well

They do pretty well by the employees, too. Free food is always available in the cafeteria

So even the snacks are free

Go E5

And here we go

I'm enjoying it

But that's nothing. The company also pays 100% the medical and dental benefits

Why in this world there's such a revolutionary idea to treat your employees and your customers well?

Yeah, I think just because you don't really see the payoff right away

You see the payoff year two years sometimes three years down the line

It's a great day here at Zappos. This is Stephanie. How can I help you?

At the heart of the Zappos' revolution is the call center

Where actual human beings answer the phone. Hi, pal, how are you doing?

A lot of companies have learned that they can be rude to their customers

They can give them bad service They can even not answer the telephone

And people still have to do business with them

And right today that's because they don't really have a choice

How can I help you today? 95% of Zappos’ business comes over the Internet

But they spend a lot of time and money

Training people to talk to customers on the phone

There's a four-week training course that every single employee

From the executives on down are required to take, even if their job don't usually require talking with customers

I’ll be happy to help you with that Do you know that you know your order number?

You don't know your order number. OK, no problem

Do you have a phone number that would be on your account?

Sari Levine already works in the design department

But she was a member of the latest call center class

And just before they were hired

She and the rest were offered cash to walk away

We are actually increasing the offer to $2,000 dollars

But today is the last day

Were you gonna...The truth is...

We offer them money to quit because we really want to make sure that

People that are working at Zappos are truly passionate about the company

And this is the place that they want to be

Very few take it Are you ready to get started?

For the graduates business ceremony

And circumstance, diplomas, the Zappos pledge

I'm on a Zappos mission to live and deliver WOW

I'm on a Zappos mission to live and deliver WOW

I'm with core values and gonna start now I'm with core values and gonna start now

They actually do have a list of 10 core values

Create fun and a little weirdness

It's just a fun way of saying that we really respects and celebrate everyone's individuality

Pursue growth and learning Do a lot of people tend to get kinda stuck?

I think it's just really important for people to feel engaged

They always need to feel like they're learning and growing

I noticed immediately coming in

At a graduation ceremony people smiling and laughing and clapping and making jokes

But you were very reserved

Yeah, and that's part of what I mean. When I say, I'm not the one that is

Saying okay here's what the culture should be

Why isn't your phone center in India?

Because we don't think you're gonna be able to give

Great customer service by outsourcing it

And for us, customers...if customer service is what our brand is going to be about

Then you can't outsource that If a customer is looking for

A specific pair of shoes and we're out of stock their size, say

Everyone here is trained to look on at least three competitor web sites

And they find the shoes in stock of our competitor, direct the customer to the competitor

And that… What do you get out of that?

Somebody else sells the shoes Yeah, we lose that sale

What they get they think is customer loyalty

75% of their businesses is people who come back

And part of their training is exposing employees to every part of the business

Remember Sari Levine?

After finishing her training at the call center she's now shipping shoes in Kentucky

And your last number should be 3184

Part of the training program we call it KY boot camp

We got our Kentucky Fulfillment Center

And you do understand

Every single aspect of how the warehouse works

Now Zappos is branching in the things like clothing and electronics

They're not stuck on shoes

And so we'll listen to our customers and try out different suggestions

They even suggested cookware, so we're selling cookware

So you just have customers who like you so much

They just want to do business with you

Almost no matter what it is they're buying

Yeah, we have received emails from customers that have asked us to

Start an airline and you know we're not gonna do that this year

But thirty years now I wouldn't rule out as a Zappos Airlines

In that case you probably have to pay for shipping

This is Brian Rooney for Nightline in Las Vegas

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