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Building a Customer Focused Culture&

Inspire Employee Happiness and Engagement to Wow your Customers

Scott Klein Customer Loyalty Team Manager

Shannon RoyCustomer Loyalty Team Supervisor

Zappos CLT, Inc.

Kathy KoziatekZappos Merchandising, Inc.

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Zappos Family Video

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A little about us…

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Zappos at Glance Corporate Background

Founded in 1999

1700 employees (half in NV, half in KY)• #23 in

FORTUNE MAGAZINE’s “100 Best Companies To Work For” 2009• Highest

debut for a newcomer in 2009

• #15 in FORTUNE MAGAZINE’s “100 Best Companies To Work For” 2010

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, over 200,000 styles, over 900,000 unique UPCs.

• 5 million items in warehouse

• 100% of products inventoried (no drop ship).

Zappos is a service company that happens to sell clothing, handbags, shoes, accessories, housewares,….

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Customer service value proposition in action…Being committed to WOWing every customer

Customers come…

Over 10 million total purchasing

customers

Over 4 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

Customers come back, order more and order

more often…

Repeat customers have higher average

order size

$123.86 – first time customers in Q407

$156.27 – returning customer in Q407

Power of repeat customers and word of mouth...

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2000 2001 2002 2003 2004 2005 2006 2007 2008

Gross Sales 1.6 8.6 32 70 184 370 597 841 1014

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3 fundamental things we’ve learned are necessary for WOW service online:

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What Customers See First

What Customers Experience

What We Do

Internally

Customer Service:What customers see first

• 24/7 1-800 number on every page• Free shipping• Free return shipping• 365-day return policy

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Customer Service:It’s all about the experience!

• Fast, accurate fulfillment• Surprise your customers

• Create WOW, PEC

• Friendly, helpful “above and beyond” customer service• Don’t have it? Assist them with finding it elsewhere

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Customer Service:Inside message needs to match the outside message

• No call times• The telephone is one of the best branding devices available

• No sales-based performance goals for reps• Run warehouse 24/7• Inventory all product (no drop-shipping)• 5 weeks of culture, core values, customer service, and

warehouse training for everyone in Las Vegas office• We’ll pay you $2000 to quit• Culture Book• Interviews & performance reviews are 50% based on core

values & culture fit• Twitter/Facebook/YouTube/Blogs help build company culture

Times are changing!

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Customer experience extendsbeyond just your site!

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Time to figure out howto extend the experience!

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Social Media

What’s the ROI on Social Media?

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•No social media strategy•We have a COMMUNICATION strategy

Create more opportunities to communicate with your customers…

… and you enable more frequent and meaningful engagement with them

(Brand longevity)!

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Why?

Because people want to be heard!

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To gather information!

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To feel like they are part of it!

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To talk about their experiences!

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Why ask why?Probably all of the above, and more!

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That’s LOTS of people willing to help look out for your business, provide feedback and ideas, etc!

That is, if you are listening…

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Most peopledon’t pick up the phone and call us!

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Evolving Customer Connections

• Phone• 6,000+ Calls a day

• Live Chat• 800+ live chats per day

• Social Sites, Networks, etc…• 1,100,000+ opportunities to interact per day

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That’s right, 1,100,000 per dayin the social space… And Growing!

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We engage customers by using our best resource.

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Our people!

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Don’t plan great media,plan great People!

Have the RIGHT people, have the RIGHT voice

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Here’s a sampling of our People’s Voice

People PlanningTrain EVERYONE to be a customer service representative

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•Customer Service •Marketing•IT•Finance•Facilities•Fulfillment Center•Legal•HR•etc

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“Quite simply the best customer service experience I have ever had, period.  I was totally satisfied with the tone of the conversation, happy with the outcome, and impressed by Elsie’s knowledge and ability to explain and clarify the Zappos’ returns process.  This kind of experience makes for lifelong loyalty among customers.  Thank you so much for your help.”

Sincerely,Bob

Customer Prop

People PlanningRally the company behind the IDEA of proactively talking to customers

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Zappos Goal: Have as many employees as possible be a voice!

We believe People Planning is at the heart of our success

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How does one do that?

• Have the right culture and nurture it• Have committable core values and aspire to live them• INVEST in hiring and firing and pay people to leave ($$$)• Stay focused and make people focused investments• Education!

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Zappos Family Core Values1. 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

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A Little Sample of how we do FUN & WEIRD!

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Hiring for Culture

• The Application (Beyond the Basics)– If you entered a room and a theme song played, what would your

song be and why?– How lucky in life do you consider yourself to be on a scale from 1-10?

• The Tour• The Hiring Process

– Managers interview for technical fit and department culture fit.– Human Resources interviews for culture fit.– Must pass both in order to be hired.

• Hire slowly, Fire quickly

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Customer Connections: Personal Emotional Connection in Action

• “She went above and beyond…”• “What a gem of an employee…”• “I feel like a made a friend…”• “Kind hearted, genuine, and sincere…”• “The epitome of what customer service is…”• “Treated me like royalty…”• “Engaging, wonderfully pleasant…”• “Funny, a person that I have never met and probably

never will, touched my life in a lasting way.”

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Doing what the customer asks:Friendly, helpful, FUN…

• You are now chatting with JonathanJonathan: Hello Timmy. How can I help you?Timmy: do you know how wide the G-Shock Atomic Solar - AWG101 SKU #7403774 is?Timmy: i mean, how big a wrist it would fit?Timmy: Timmy has a big fat wristTimmy: Timmy need watch grandeJonathan: I'll see what I can find out for Timmy.Timmy: awesome. and can we please continue to talk about Timmy in the 3rd person? Timmy likes to boost Timmy's ego by talking about Timmy that wayJonathan: Jonathan would be happy to neglect the use of pronouns for the duration of this conversation.Timmy: Jonathan and Timmy shall get along just fineJonathan: Will Timmy be able to measure Timmy's wrist?Timmy: Timmy's wrist is big, but not Biggie-Smalls big. Timmy doesn't have the required measurement instruments.

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Teams and Relationships• Relationships

– Socialize with co-workers– ZCN Clubs– Twitter– Facebook

• Manager’s Role:– Drive the culture– Build their team (Team Building)– Inspire new ideas and creative thinking– Help employees find their calling, reach their peak– Personal Development for employees (Pipeline classes) – Recognition

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Staying Focused

“One team --- One dream!”

Thank you for allowing us to put a little happiness in your day!

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