zappos - naa - 02-17-10
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Delivering HappinessTony Hsieh – [email protected]
Follow me on Twitter: twitter.com/zappos
NAA Student Housing ConferenceFebruary 23, 2010
Slide 2
Slide 3
A Little About Me (Tony)
Slide 4
Zappos at a GlanceCorporate Background
• Founded in 1999
• 1500 employees (half in Las Vegas headquarters, half in Kentucky) #15 in FORTUNE MAGAZINE’s “100 Best Companies To Work For” in 2010 Second year in a row to make the list
• Zappos is “Powered by Service” Providing the best online shopping experience possible. Fast, Free Shipping. Free return shipping. 365-day return policy. Fast fulfillment. Expedited delivery. Fast, friendly & expert customer service.
• Best selection Over 1,000 brands Millions of items in warehouse 100% of products inventoried (no drop ship).
• Zappos is a service company that happens to sell clothing, shoes, handbags, eyewear, watches (and eventually a bunch of other stuff).
Slide 5
Recent Recognition:Nice, but we pay more attention to our customers
• TV Stories• Oprah (2008/2009)• ABC Nightline (2008)
• Fortune “100 Best Companies to Work For”• #23 (2009) – Highest ranking newcomer to list• #15 (2010) – Second year in a row to make the list
• Fast Company “50 Most Innovative Companies”• #20 (2009)
• BusinessWeek Top 25 “Customer Service Champs”• #7 (2009)
Slide 6
Customer service value proposition in action…Zappos is committed to WOWing every customer.
• Customers come… Over 12 million total purchasing customers Over 5 million have purchased in the last 12 months
• Customers come back… On any given day, about 75% of purchases from
returning customers Repeat customers order >2.5x in the next 12 months
Slide 7
Power of repeat customers and word of mouth...
Slide 8
Customer Service:What customers first see
• 24/7 1-800 number on every page
• Free shipping
• Free return shipping
• 365-day return policy
Slide 9
Customer Service:What customers experience
• Fast, accurate fulfillment
• Most repeat customers are “surprise”-upgraded to overnight shipping
• Friendly, helpful “above and beyond” customer service
• Occasionally direct customers to competitors’ web sites
Slide 10
Customer Service:What we do internally
• No call times, no sales-based performance goals for reps.
• The telephone is one of the best branding devices available.
• Run warehouse 24/7. Inventory all product (no drop-shipping).
Slide 11
Customer Service:It comes from our culture
• 4 weeks of culture, core values, customer service training for everyone in Las Vegas headquarters
• We’ll pay you $2000 to quit
• Culture Book
• Interviews & performance reviews are 50% based on core values & culture fit
• Twitter helps build company culture
Slide 12
Owning the 3 C’s
Clothing
Customer Service
Culture
Slide 13
Clothing
Slide 14
Customer Service
Slide 15
Culture
Slide 16
Owning the 3 C’s:Clothing, Customer Service, Culture
Customer Service
Clothing
Culture
Slide 17
ZapposDelivering Happiness
(customers and employees)
“People may not remember exactly what you did or what you said, but they will always
remember how you made them feel.”
Slide 18
Building Great
Slide 19
CULTURE“Committable Core Values”
Slide 20
Zappos Core Values
1. Deliver WOW Through Service2. Embrace and Drive Change3. Create Fun and a Little Weirdness4. Be Adventurous, Creative, and Open-Minded5. Pursue Growth and Learning6. Build Open and Honest Relationships With Communication7. Build a Positive Team and Family Spirit8. Do More with Less9. Be Passionate and Determined10. Be Humble
Slide 21
COMMITTING TO TRANSPARENCY
“Be real and you have nothing to fear”
Your culture is your brand
Don’t try to be someone you are not
Slide 22
Commitment to Transparency:Examples
• twitter.zappos.com
• “Ask Anything” newsletter
• Extranet for vendors
• Tours & reporter visits
• ZapposInsights.com
• Zappos Insights Live events
Slide 23
“That’s great for Zappos but it would never work at my
company…”
Slide 24
It doesn’t matter what your core values are…as long as
you commit to them.
ALIGNMENT
Slide 25
VISION“Whatever you’re thinking, think bigger.”
Does the vision have meaning?
Chase the vision, not the money…
Slide 26
VISION
“Don’t chase the paper, chase the dream.”
Sean Combs aka “Puff Daddy” to rapperBiggie Smalls aka “Notorious B.I.G.”
in Notorious
Slide 27
ENTREPRENEURS:
“What would you be passionate about doing for 10 years even if you never made a dime?”
Slide 28
EMPLOYEES:
What’s the larger vision and greater purpose in
their work beyond money or profits?
Slide 29
VISION
MOTIVATIONvs.
INSPIRATION
Slide 30
Evolution of Zappos BrandTranscends shoes & service
• 1999 Selection
• 2003 Customer Service
• 2005 Culture and core values as our platform
• 2007 Personal Emotional Connection
• 2009 Delivering Happiness
Slide 31
TAKE A STEP BACKWhat is your goal in life?
Slide 33
WHAT IS YOUR GOAL IN LIFE?
Grow Company
Get a Great Job
Boyfriend / Girlfriend Be Healthy
Retire Early Make Money Find Soul Mate Run Faster
Spend Time w/ Family Buy A Home Get Married Run A
Marathon
why? why? why? why?
why? why? why? why?
HAPPINESSwhy? why? why? why?
Slide 34
RESEARCH HAS SHOWN:
HAPPINESSPeople are very bad at predicting what
will bring them sustained happiness.
“When I get ___, I will be happy.”
“When I achieve ___, I will be happy.”
Slide 35
HAPPINESS:
• There is a SCIENCE behind many aspects of business including:• conversion• psychology of buying• direct marketing• customer acquisition metrics• repeat customer behavior, etc.
• What if you spent just 10% of your time studying and learning the SCIENCE of HAPPINESS?
• How much HAPPIER could you be?
Slide 36
WHAT IS YOUR GOAL IN LIFE?
Grow Company
Get a Great Job
Boyfriend / Girlfriend Be Healthy
Retire Early Make Money Find Soul Mate Run Faster
Spend Time w/ Family Buy A Home Get Married Run A
Marathon
why? why? why? why?
why? why? why? why?
HAPPINESSwhy? why? why? why?
A Few Different Frameworks of
HAPPINESS
Slide 38
Perceived Control
Perceived Progress
Connectedness
Vision / Meaning(Being part of something bigger than yourself)
A FEW DIFFERENT FRAMEWORKS ON HAPPINESS:
Slide 39
Maslow’s Hierarchy:
Slide 40
Rock Star(Pleasure – chasing the next high)
Flow(Engagement – time flies)
Meaning /Higher Purpose(Being part of something bigger than yourself)
3 TYPES OF HAPPINESS
time
time
time
Slide 41
RECOMMENDED BOOKS:
PEAKChip Conley
TRIBAL LEADERSHIPDave Logan, John King & Halee Fischer-Wright
FOUR HOUR WORK WEEKTim Ferriss
HAPPINESS HYPOTHESISJonathan Haidt
Slide 42
Put a little Zappos in your day……some links to check out…
• Follow me on Twitter: @zapposhttp://twitter.com/zappos
• http://twitter.zappos.com (public mentions, employees)
• http://bit.ly/twitterbetter - “How Twitter Can Make You a Better (And Happier) Person”
• http://blogs.zappos.com (photos & videos of culture)
• http://about.zappos.com (more information about us & core values)
• http://www.zapposinsights.com (video Q&A, book recommendations)
• http://jobs.zappos.com (job opportunities)
Slide 43
Put a little Zappos in your day……to contact me or get a tour…
• Email [email protected] for:
A copy of this presentation
Copies of our culture book (need physical mailing address)
• Email [email protected] for:
Tour of our offices when you’re next in Las Vegas (takes about 45-60 minutes)
We’ll pick you up from the airport or your hotel in a Zappos Shuttle!
Slide 44
Profits
Passion
Purpose
GREAT BUSINESS
Slide 45
HAPPINESS
time
time
time
GREAT BUSINESS
Profits
Passion
Purpose
Pleasure
Passion
Purpose
Slide 46
What % of your time do you want to spend learning about the SCIENCE of HAPPINESS?
How can the SCIENCE of HAPPINESS help your business, your brand, and yourself?
Slide 47
If the research shows that vision / meaning / higher purpose
leads to happiness…
What is your company’s higher purpose?
What is your higher purpose?
Delivering HAPPINESS
Slide 49
My new book is titled“Delivering Happiness”
To be published June 7, 2010Pre-order on Amazon.com!
http://www.amazon.com/Delivering-Happiness-Tony-Hsieh/dp/0446563048
Delivering HappinessTony Hsieh – [email protected]
Follow me on Twitter: twitter.com/zappos
For Zappos HQ Tours, go tohttp://tours.zappos.com
Slide 52
Legal and Financial Disclaimer
P.S. You might be wondering why we need to have a legal and financial disclaimer in this presentation, but you are still reading, so our lawyers, auditors and accountants would really like to make sure we make the following clarifications.
Although an audit was underway and almost done, the financial information presented in this slide show was unaudited. We made every effort to present the best information we had at the time.
Gross merchandise sales is a non-GAAP metric. We use it to express the total demand across all of our web sites and stores. This number measures the dollar value of the orders placed in the year before accruing for certain items such as returns, and it ignores certain timing cut-offs that are required by GAAP for revenue recognition purposes. If we were a public company, we would have to reconcile gross merchandise sales to the nearest GAAP metric (net sales), but we are currently a private company so the gross merchandise sales number should be viewed just as an interesting number that we want to share with our friends.
This presentation contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by the forward-looking statements and assumptions. These risks and uncertainties include, but are not limited to, the risk of economic slowdown, the risk of over or underbuying, the risk of consumers not shopping online or at our web site at the rate we expected, the risk of supplier shortages, the risk of new or growing competition, the risk of a natural or some other type of disaster affecting our fulfillment operations or web servers, and the risk of the world generally coming to an end. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Zappos.com assumes no obligation and does not intend to update these forward-looking statements.
Congratulations on making it through all the fine print. If you enjoy fine print, look for openings on our legal and finance team at jobs.zappos.com.