“Oh God!” he’s thinking, I can’t believe I’m about to do this…
A 5-man camera crew exits the adjourning office and sets shop; a crowded room gets progressively more crowded. Anticipation runs thick and clouds even the strongest urge to reconsider. He sits down and the room begins to buzz louder and louder until the buzzing of the crowd and the buzzing of the clippers blend seamlessly into one deafening hum.
What is this madness? That’s a great question…
I could tell you it’s an office (albeit a very unique one). I could also tell you that the office belongs to one Tony Hsieh—a 35 year old entrepreneur and softy for all things unconventional. Or I could tell you it’s a billion dollar story about social media (move over Zuck…). Does any of it make sense? No, not really. But then again, with a build up like that, it doesn’t have to.
So what is this madness? Ask Tony Hsieh. After graduating Harvard in 1995, Hsieh left his job at Quincy House Grille and put his degree to work at Oracle. It was a short-lived honeymoon though as Hsieh fled the technology giant—citing corporate culture as his reason for departure (remember this). Little did he know this would be the first of many life-changing decisions he would make over the next five years…
In 1996, Hsieh began developing an advertising network called LinkExchange. Within 90 days, it had more than 20,000 clients and more than 10 million banner ads on the web. Two years later, the site hit 400,000 with 5 million ads rotated daily. In 1998, Microsoft purchased the company for a cool $265 million…
With this, Hsieh had enough money to retire young and never work a day in his life—but he chose not to. Instead, he founded a small investment firm and hedged bets on many notable startups including AskJeeves, OpenTable, and…Zappos.
And that’s where our story begins.
In 1999, Hsieh and his business partner Alfred Lin were approached by Nick Swinmurn, an aspiring entrepreneur with an all-too-common problem: he couldn’t find the shoes he was looking for at the local mall. Frustration led to inspiration and soon Nick was looking to investors for the capital needed to start what later would become the online shoe store, Zappos. Hsieh and Lin scoffed at the initial approach.
But then Nick mentioned something amazing: “Footwear in the U.S. is a 40 billion dollar market and 5% of that was already being sold by paper mail order catalogs.” Say no more…
With Hsieh (as CEO) and Lin onboard, Zappos doubled revenue every year from 2000 ($1.6 million) to 2009 ($1.2 billion) before eventually selling-off to Amazon, netting Hsieh another serious, serious payday!
So, why has Zappos been so successful? One word: “Culture.”
Culture was the catalyst for Hsieh’s departure from Oracle and it became the catalyst for Zappos’ one, true competitive advantage. Other companies could migrate online, they could offer free shipping, they could even offer competitive prices and selection, but what they couldn’t offer was the patience, individuality, and friendliness of Zappos’ staff—and all of that is encapsulated in the company’s social media strategy.
Unlike their competitors, Zappos treats social media as a tactic, not a strategy. While some firms use social media to sell a product/service (and then ditch it when ROI gets low)—Zappos doesn’t believe in social media metrics. According to Hsieh, “The various tools of digital communication—blogs, microblogs and streaming video—have a different purpose […] these tools give the public “glimpses into how we act.””
So when Hsieh gets on Twitter and addresses his audience of 1.8+ million followers, he doesn’t sling shoes. Instead, he shares insights, office shenanigans, the book he’s currently reading, celebrity gossip, and tech news—literally anything and everything that catches his eye and makes Tony, Tony. If you can’t tell by his following, it’s paying off.
Not only that, but he encourages his employees to do the same. About 1/3 of the company’s employees are on Twitter and an untold number contribute to its “Inside Zappos” blog. Here, you can see the faces of Zappos and share in their quirky antics. What’s more, Zappos has taken Twitter and twisted it into a “more social” social network. Instead of displaying the congested Zappos Tweet stream, the company has aggregated its employees and followers into two separate pages. So, if you want to see what the Zappos employees are up to today, check out this page. Want to see what customers are sharing, check out this page. It’s that simple.
In doing so, Zappos has unleashed torrents of conversation surrounding their brand. Take note…
They even have a camera crew anxious to capture the day-to-day “happenings” around the office. On the phone? Now you’re on camera, smile! “We’re reporting in a microcosm,” says Houchins (cameraman) “we’re reporting events in the small little Zappos world where there’s always something going on […] a lot of it is completely spontaneous.”
And all this content gets fed into the social media channels Zappos inhabits—Facebook, Twitter and now, the more recent Zappos.tv where the company hopes to produce 2-3 original videos a day. Do they get a lot of play? No. But again, it doesn’t matter. At the very least, they’re an exercise in company relations, a morale booster that further stresses the commitment of Zappos to a laidback, personable corporate culture.
Anyone can talk the talk, but it takes vision and determination to walk the walk—that’s what Hsieh does best. If culture is the goal and social media is the medium, how can you expect employees to share their truest selves with their coworkers without going above and beyond the call of duty? That’s what happy hours (remember that), camping trips, and visits to the local shooting range are for—machine guns anyone?
While some say these activities waste resources and time, the byproduct of this atmosphere is synergy. When you have synergy, it’s undeniable; it’s a luxury you can’t afford. Happy workers, happy workers, happy workers—that’s the goal, and Zappos does it best!
The other goal is to create 1,400 spokespeople for the company, online and off. When those spokespeople are truly authentic, when they share their individuality, their character, it only goes that they’ll have more followers, and of those followers, more and more will share back. At this juncture, selling shoes is ancillary.
“It’s old-fashioned customer relationships, where it’s just a much more personal thing, rather than just focusing on, oh, what’s the most efficient way we could do something […] We want to create personal emotional connections.”—Hsieh
But, as Zappos long understands, social media can’t do it all. The real key is great online retailing, hallmarked by a commitment to do what you say you’re going to do. If you sell shoes, deliver the exact shoes that are ordered, on time; take returns and, above all, avoid complaints and frustrated customers.
Hsieh doesn’t use Twitter as a research or sales tool. Instead, he wants both insiders and outsiders to be talking about the company—and the outsiders to become customers for life. At Zappos, this is referred to as the “WOW” factor.
So when a bride-to-be called Zappos looking for shoes, the representative—under no pressure to sell a product or hang up—talked with the woman and soothed her pre-wedding jitters in a 4 ½ hour long exchange that did everything but result in a final sale. Instead, however, the exchange led future Mrs. “So and So” to blog about the incredible attention she received. That day, Zappos received a stream of referrals and instead of condemnation, the representative received praised—her story is now lore. That’s the “WOW” factor. That is what Zappos is all about.
With arguably the most committed brand following, Zappos (a take on the Spanish for “shoe,” altered so not to pigeonhole operations) has moved into several new and exciting industries with entire sites—some that don’t even bare the Zappos name—devoted to niche audiences. 6pm.com, for instance, offers heavy discounts on designer shoes and apparel. More recently, the company has moved into electronics. All this made possible with a visionary CEO, fun-loving culture and…social media.
So let’s bring this full circle…
The room is crowded, the clippers are buzzing and a 5-man camera crew sets up shop. Who’s the mysterious “man in the chair”? Well folks, that’s Tony Hsieh. After a couple drinks, he and his swath of friends/coworkers decide nothing would be funnier than for Tony to shave his head and post the whole thing online. Well, maybe one thing…
So, what is this madness? This, my friend, is Zappos…
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