Leading online shoe retailer Zappo's has cheerful employees, satisfied, loyal customers, and a C.E.O. who doesn't see himself as an irreplaceable demigod. So naturally, people wonder if it's some kind of cult. Alexandra Jacobs investigates for the new New Yorker.
OK, it's not as dramatic as all that. The story is fascinating if you're into learning how a successful company operates, but there's just not much dirt, beyond some rather half-hearted accusations of cultishness; if there are people willing to criticize Zappo's, Jacobs didn't find them. (Well, she does mention that upscale designers like Jimmy Choo and Gucci won't deign to be sold by Zappo's — unfortunately, I couldn't find a better shoe picture for this post — but even that's neither unexpected nor nasty enough to be very exciting.) The most scandalous thing we witness is one member of the "Customer Loyalty Team" hanging up on a woman and remarking, "Sometimes you just need to let them natter on." But she says it "not unkindly," according to Jacobs — and at a company where the longest recorded customer service call was 5 hours, 25 minutes, 31 seconds long ("We started talking about her sister"), that sounds like a fair point.
So how did Zappo's get such a great reputation? Well, by doing things like letting customer service calls go on for hours. And offering overnight shipping and a 365-day return policy. And having a selection so ridiculously vast — including sizes that are extremely difficult to find in bricks-and-mortar stores — that pretty much every shoe in existence not produced by one of those hoity-toity brands appears to be available there. And relying on a word-of-mouth marketing policy that means customers had damn well better be satisfied. And creating the kind of work environment where, in the words of 35-year-old C.E.O. Tony Hsieh, "we all want to be there, including me." "How can we create such a great environment," he asked himself, "where employees get so much out of it that they would do it for free?"
It's true, as Jacobs point out, that some employees are doing it for not much more than that, although $11/hr — the lowest wage she reports — is still considerably higher than the minimum. (Apparently, a good chunk of order fulfillment is done by robots. Cool!) And some of the team-building exercises and examples of self-conscious zaniness described are a bit eye-rolly — hula-hooping, random bell-ringing, an in-house a capella group called The Zappettes — which is where the concerns about what's in the Kool-Aid come from. As Jacobs puts it, "Zappos may not be a cult, but working there seems akin to sitting in a sports arena; you have to be prepared to stand up and do the wave at any time." Still, the employees generally do indeed seem happy to be there, even the one who took the 5-hour call.
I'm always amazed when companies that make a genuine effort to keep employees and/or consumers happy are held up as groundbreaking innovators, as though aiming for productive workers and satisfied customers is some kind of newfangled genius business strategy. Granted, not a lot of corporations manage to get either right, let alone both, which is why Zappo's is such a standout. But seriously, does it take an MBA to figure out that people who don't dread going to work will do a better job, and customers who are pleased with your service will let their friends know? Wait, actually, a lot of people with MBAs apparently haven't figured that out. Never mind.
There are limits, of course, to Zappo's greatness. Jacobs points out that the word-of-mouth marketing has only worked "up to a point" — recently, I learned my own husband had heard of Zappo's but thought it was a brand of shoes; he was shocked and delighted to learn he could order new Chuck Taylors there. ALONG WITH EVERYTHING ELSE IN THE WORLD, HONEY. Their generous return policy means they have to give back a lot of the money they gross, and operating costs are high, which may or may not be why Hsieh was happy to let Amazon buy the company recently. But still, perspective: Last year's net profits were $10.8 million. They're doing something right.
And if we've learned anything from the Dooce/Maytag showdown, it's that big corporations will not survive long without both outstanding customer service and an awareness of how word-of-mouth operates in the age of social networking. ("[U]nlike most companies," says Jacobs, Zappo's "encourages employees to let it all hang out on Twitter and Facebook.") Among my favorite things about Zappo's are the extensive customer reviews, which make me a lot more inclined to buy something I can't try on — I can usually get a pretty decent sense of whether a pair of shoes run a half-size big or small, whether they're as comfortable as the manufacturer claims, and — knowledge I can't even get from trying them on — how they hold up over time. Reviewers are basically an army of unpaid salespeople, recruited simply by giving them a decent experience. (And inevitably, half of them rave about Zappo's customer service.) As Tony Hsieh figured out early on, and the Maytag folks just learned the hard way, it's no longer safe to assume that one unsatisfied customer or disgruntled ex-employee can't do a company any real harm. The person you treat like shit might just have a popular blog, or 500 Facebook friends, or over 1 million Twitter followers. Turns out keeping people happy is good business. Let's hope it becomes a trend.