Last week Kevin, Bob, and I were lucky enough to visit Zappos, a US company who sell a huge amount of shoes online, and spent half a day touring their facilities and spending time with a couple guys who work there.
Here is what I think are the most remarkable things about Zappos, which provide inspiration to us and are relevant to any consumer company:
1. The powerful and truthful brand that the whole company upholds. Their brand is founded on Core Values â€“ we call them principles at GD- and are religiously subscribed too. They do not claim to do too much, but what they say they do, they do 110%. External brand agencies have not been let anywhere near it. Their brand has been allowed to evolve over 10 years and pervades company culture to an extent I have never witnessed. The best effect of this in my opinion is that commercial decisions become no-brainers with the backdrop of such a prevalent sense of reason dâ€™etre.
2. All areas of the business are focused on Wowâ€™ing their customers â€“ striving to create a â€˜personal emotional connectionâ€™. Their â€˜Wowsâ€™ please customers, and the obvious offshoot of this is that they drive talkability, repeat purchase (and therefore lower costs of acquiring customers) â€“ because everyone is focused on creating new wowâ€™s, the whole company orientates their thinking (and, their spending) naturally towards the customer. At GD, our customer is our boss- and it is great to see a company that truly believes that their customer is more important than their management, shareholders, board and themselves, as well. And they go about every day and decision proving that. Zappos spends approximately just 2% of it’s annual revenues ($18m last year) on marketing. Wows are the reason why.
3. In terms of literal customer service, they’ve renamed it â€˜Customer Loyaltyâ€™. Customer Loyalty is not a call center, but an extension for them of brand marketing. CL agents are brand marketers driving loyalty – and they really do; 75% of sales revenues come from existing customers, which is a figure that we aim to one day achieve. Rather then spend their bucks on re-acquiring customers, they make absolutely customers have such a good experience that they come back.
The data speaks for itself in terms of results. In all 3 of the points above Zappos, â€˜a service company that happens to sell shoesâ€™, is stronger in my opinion than the ecommerce â€˜gold standardâ€™ Amazon which even if it is predominently in other verticals, already looks dangerously like the vulnerable incumbant. Companies like ours should study Zappos now to understand the future of ecommerce.