Name: Zappos: No hard-sell here
Uploaded: 2014-04-09
Duration: 4 min 24 s
Description: Tony Hsieh, CEO of the online-retailer Zappos, says avoiding aggressive sales techniques breeds loyal customers.

[ MUSIC ] So am I to understand that your, your thesis is that Zappos, although it does deliver shoes, what it really delivers is happiness to its customers? That sounds. Silly, but you, you mean it, right? Yeah, well, it, I mean it's definitely evolved over the years, so we didn't have this plan from the beginnings that we've been around for eleven years, and in 1999 when the company was founded the vision was let's sell a lot of shoes and have the brand be about selection. And then, in 2003, fours years into it, was when we decided instead of being about the shoes let's actually be about customer service. And hopefully ten years from now people won't even realize we started out selling shoes online and in fact today we sell a lot more than shoes. We sell clothing, beauty products, housewares, kitchenware and so on. And, really, ultimately, build the Zappos brand [ INAUDIBLE ] the very best customer service, whether it's in e- commer, e- commerce, or even something offline, like airlines or hotels. Zappos has, a lot of, unusual practices, you know. Paying employees who aren't gonna fit in anyway to leave is one. You also have a policy against trying to up sell customers on the telephone. Can you explain that? Well, it's not really, I would say against trying to up sell. We, you know, if a customer wants us to make suggestions then we'll certainly do that for additional products, but it's more about just doing what would. Be the best service for the customer. So, most of the time customers don't want to be sold to, and we really just view every interaction that we have with customers through a branding lens, not through a revenue generation lens and not through an expense minimization or efficiency lens. It's, how do we brand Zappos to be about the very best customer servicing customer experience, and in most cases that means you don't try to up sell, and, and in fact if someone is looking for a pair of shoes and if we're out of stock of their particular size, everyone's trained to look, actually look on competitor websites. And direct the customer to that competitor if it's in stock there cuz that's the best, for that specific scenario. That's the best way to brand Zappos to be found the best service. Have you ever you know, mixed it up with whether it's other business people or business professors who have said, come on, up selling is a well established tradition. If you don't do it. You're not maximizing, you know, you're not maximizing your profit potential for example. We know we're, I mean obviously if we were referring customers to competitors, that's not maximizing profit potential. Well, I would argue that's good business. You can't satisfy that customer so it's a very good customer service to help them get satisfied. But sort of, passing on the opportunity to sell them more. Because you don't want to offend them. I could just see some saying that's you know, it's, it's, your almost acting like you don't care about making money. Well, for us, on any given day about 75 % of our orders are from repeat customers and that's really, you know, because of the loyalty that we've gained over the years. Because we're not always trying to squeeze every last dollar out of them. And, you know, despite the down economy over the past 24 months, we've actually continued to grow year over year. A lot of people ask us, what do we do differently during the bad economy. And the answer's nothing. We did nothing differently. And it's actually not about anything we did during the last 24 months, it's about what we did. Prior to that, and that included not trying to upsell them, not trying to get them off the phone. All in the name of efficiency. And really our customers remained loyal because of stuff we did two, three, four years ago. But events, theoretically, could overtake you. I mean, let's, I don't know how many years in the future we should you know, game play this. But let's say seven years into the future you've done a great job of hiring good people. You've continued to build the company, but for whatever variety of reasons revenue slowed dramatically. Mm- hm. What would you do then? I don't know. I guess we'll, we'll cross that bridge when we get there. Right now we're just focused on, continuing to, trying to actually trying figuring out how to keep up with a business that's growing quickly and That probably, for us I think, makes more sense to focus on that right now.

Tony Hsieh, CEO of the online-retailer Zappos, says avoiding aggressive sales techniques breeds loyal customers.