Designing an Organisational Culture: Tony Hsieh Wrapping Zappos' Organisational Culture?

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Designing an Organisational Culture: Tony Hsieh Wrapping Zappos'; Organisational Culture?

 

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Under Tony, Zappos focused on delivering superior customer service over marketing. He considers “the customer service as an immense branding opportunity, a unique way to speak directly to your customers”.21 Zappos' website – a unique, easy to navigate and non-flashy advertisement site, is designed in such a way that it offers visitors the most pleasant and fulfilling online shopping experience. The simple layout of the site helps in loading the page in 0.879 seconds.22 Moreover, unlike its competitor's sites, at Zappos, customers can search shoes based on its brand, size, colour, style, width, price and also heel height in case of women shoes. While searching, customers can also view the shoes from seven different close up angles, including top, bottom, left, right, back, front, and pair. The primary focus was to deliver “wow” through service and make customers feel that it is very easy to purchase from Zappos. Tony explained, “Our philosophy at Zappos is to WOW with service and experience, not with anything that relates directly to monetary compensation.”23 Zappos concentrated on availability of a wide range of shoes (Zappos keeps an inventory of 1,095 brands

and 165,722 styles) and speed of delivery. With a tagline ‘Powered by service', it delivers shoes in almost a day, despite promising 4 days. Its fast and accurate free overnight shipping policy ensures that customers who order shoes as late as midnight also receive their merchandise on the next day. The shipping is free, both ways.

To remove the hassle of online shopping, Zappos extended their return policy from 30, 60 and 90 days to 365 days.²⁴ A major apprehension of customers who shop online is the complication involved in returning the product. However, with Zappos, customers are at complete freedom to order up to 10 pairs of shoes, try them and send them back without paying for the shipping in case they do not like them, all throughout the year. Zappos spends more on shipping than on employee wages. Unlike other online retailers that also offer free shipping, Zappos provides its customers a prepaid return shipping label that includes address confirmation, low-priced delivery, signature proof and low-cost parcel insurance. For repeat customers, Zappos makes placing orders simpler thr ough its ‘Bill me Later' policy wherein customers can place orders without presenting their credit card numbers again.

To guarantee that the customer service works, Tony focused on continuing to grow the company rapidly, while preserving the culture and feel of a small company. Tony said, “I think company culture is extremely important, and I also think that as the company changes and grows, the ideal company culture also will change and grow over time. If you get the culture right, most of the other stuff will just take care of itself.”²⁵ He also beleived that one of the biggest enemies to culture is hyper-growth. “You are trying to fill seats with warm bodies, and you end up making compromises”, Tony observed. Accordingly, he designed an organisational culture wherein, employees indulge in delighting customers by going out of their way. The customer loyalty team is encouraged to interact with the customers more on a personal level rather than just on a business level. Moreover, they send personal cards and bouquets to their customers if they get to know that they are buying shoes for some special occasions like birthdays, wedding anniversaries, etc. Tony said, “To me, the ZAPPOS culture embodies many different elements. It's about always looking for new ways to WOW everyone we come in contact with. It's about building relationships where we treat each other like family. It's about teamwork and having fun and not taking ourselves too seriously. It's about growth, both personal and professional. It's about achieving the impossible with fewer people. It's about openness, taking risks, and not being afraid to make mistakes. But most of all, it's about having faith that if we do the right thing then in the long run we will succeed and build something great.”²⁶

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21] Simo Fidji, “A lesson on Customer Service and Corporate Culture by Tony Hsieh, CEO of Zappos .com”, http://techiteasy.org/2008/04/ 23/a-lesson-on-customer-service-and-corporate-culture-by-tony-hsieh-ceo-of-zappos-com/, April 23rd 2008
22] McDonald Duff, “Zappos.com: Success Through Simplicity”, http://www.cioinsight.com/c/a/Case-Studies/Zapposcom-Succcess- Through-Simplicity/, November 10th 2006
23] “Zappos core values”, http://about.zappos.com/our-unique-culture/zappos-core-values/deliver-wow-through-service
24] “Tony Hsieh from Zappos”, op.cit.,
25] “Interview conducted with Tony Hsieh by Sravanthi Vemulavada and Priti Krishnan”, op.cit.
26] Miller Steve, “Two Hat Marketing – Would YOU Do Business With YOU: The Zappos Way?”, http://www.twohatmarketing.com/ ramblog/2009/01/what-is-culture-anyway.html, January 27th 2009