Looking Back on the Legacy of CEO Tony Hsieh
With the recent passing of Tony Hsieh, CEO of Zappos, it is the perfect opportunity to look back on the legacy he left behind. While Hsieh may have passed on, the changes he made to customer service and company culture are lasting and have spread far beyond Zappos.
Making Novel Ideas Normal
Early on in the days of Hsieh’s leadership at Zappos, his ideas were considered novel and unusual. While that is still the case for some of them, many others form the bedrock of customer services in companies today. His knowledge was so well-respected that when he published his autobiography and book on corporate culture, Delivering Happiness, in 2010, it debuted in the top spot on the bestseller list of the New York Times.
Putting Customer Service First
The most crucial part of running a business like Zappos for Hsieh was customer service. Everyone in the industry strongly agreed that he significantly raised the bar and elevated customer service standards.
Instead of focusing on keeping costs low in the call center by limiting the time spent on each call or increasing profits via upsells, Hsieh had his team focus on attending to the customers’ needs. He encouraged employees to talk to customers for as long as they needed, send them cards and flowers, and go above and beyond, such as hand-delivering valuable packages or helping customers order pizza.
Hsieh guided Zappos employees to focus on customer service to get repeat customer visits and win new customers with word-of-mouth marketing. This goal included taking steps that were unheard of in the industry and are still incredibly rare.
One example is the fantastic return policy at Zappos, a full 365 days, and with customers being encouraged to order multiple shoes if they cannot make up their mind, then returning them. Zappos covers the cost of these returns, letting indecisive customers make up their minds in the comfort of their homes without breaking their budget.
That particular change showed what Hsieh knew to be true: spending a bit more on return shipping costs or other expenses to build up customer loyalty is worth it financially, as it leads to repeat customers and recommendations that bring in new customers.
Another example is that instead of focusing on metrics like high efficiency and low cost, Hsieh focused on customer happiness at the end of any interaction, going against the industry standard for contact centers. Another difference between working at a Zappos contact center and doing so in other companies is the lack of scripts. Every customer wants something unique from their experience, and Hsieh empowered agents to adapt their call to meet those needs.
Hsieh’s efforts paid off, with 44 percent of new Zappos customers hearing about the retailer from word of mouth and 75 percent of purchases coming from repeat customers.
Creating a Fun Work Atmosphere
Besides raising expectations for customer service, Hsieh’s legacy as Zappos CEO changed expectations about working for an online retailer for the better.
Throughout his leadership, Hsieh followed the principle that getting the work culture right would lead to success in customer service and branding.
One of Zappos’s values is “Create Fun and a Little Weirdness,” from occasionally blowing horns or ringing cowbells to requiring managers to spend time with their team members outside of the office. This latter requirement also ties into the philosophy and principle of using communication to build open, honest relationships. Hsieh encouraged open communication between employees as well as with customers, vendors, and other businesses.
Hsieh created a work atmosphere that was fun and full of life, where creativity is valued, as is individuality. Nothing shows this effect better than the annual Zappos Culture Book. This book features paragraphs and photos from employees sharing the meaning of the company for them. Employees have been creating this yearly book for over a decade, consistently showing their workplace satisfaction through the fact that not all submissions can fit in the book.
Lessons We Imbibed From Tony Hsieh
Hsieh’s philosophy was: ‘the customer always comes first’ and ‘the customer is always right.’ While most initiatives that can improve customer service lies with the brand, there are many learnings for BPM/BPO service providers.
At ContactPoint 360, we treat the telephone channel as a branding device. You get the undivided attention of a customer on the phone. We understand that if an engagement goes well, the customer will likely spread the word to their friends and family. Most brands see the lifetime value of a customer as fixed. We believe in growing the lifetime value by creating positive emotional associations with our partner’s brand. Ever since I founded ContactPoint 360, we have invested heavily in three key areas: our culture, employee training, and technology-driven customer service – because Zappos proved that these are fundamental to a company’s success.
Gone, But With Corporate Culture Changes That Lives On
At the time of his passing, Zappos’ legendary founder seems to have struggled with mental health and sleep issues, addiction, and loneliness. He felt alone for a person who drove a revolution in the customer service industry with an approach that fostered human connections.
Even with Hsieh’s passing, his impact on corporate culture lives on, at Zappos and in other companies that adopted similar principles upon seeing the retailer’s success. He illuminated the path for us to build sustainable businesses around repeat customers and word of mouth.
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