Delivering Happiness

6. Not all cultures are the same.
In all likelihood, your company’s book will look nothing like the
Zappos Culture Book. It’s not because one’s any better than the other,
it’s just because your values and mission are unique to your own
company’s thumbprint. Make it a true voice of what your culture
represents and it’ll sing like it’s in the shower.
7. Evolve.
If you’re still unsure of whether a culture book makes sense for your
company, one way to get a pulse is to send out an e-mail (or survey)
first, asking your employees, partners and customers (or a subset of
them) what they think your company’s culture means to them. Now
more than ever, they’ll tell you the truth.
We had no idea what the results would be when we did this, but
the most educational part of the exercise was that we took it and
evolved. Our original idea soon morphed into something more
interesting. We welcomed negative feedback knowing we’d learn and
see whether the culture “reads” the same or different from the year
before. If it’s not in closer alignment to a company’s values, goals, or
mission, there’s no doubt you’ll know.
Forty years from now, I imagine I’ll be sitting on my rocking
chair, browsing 
Zappos.com
 like I’m in Minority Report, tapping the
air in front of me to pick out what I’m going to wear for my
nephew’s wedding. Who knows, maybe I’ll be booking my flight on
Zappos Airlines too. I’m not sure what form of the Culture Book will

---

exist at that point, but I do know one thing… I’ll be reminiscing
about those early Zappos days with a smile.
Branding Through Customer Service
Over the years, the number one driver of our growth at Zappos has been
repeat customers and word of mouth. Our philosophy has been to take most
of the money we would have spent on paid advertising and invest it into
customer service and the customer experience instead, letting our customers
do the marketing for us through word of mouth.
So what is great customer service?
It starts with what customers first see when they visit our Web site. In
the United States, we offer free shipping both ways to make the transaction
as easy as possible and risk-free for our customers. A lot of customers will
order five different pairs of shoes, try them on with five different outfits in
the comfort of their living rooms, and then send back the ones that don’t fit
or they simply don’t like—free of charge. The additional shipping costs are
expensive for us, but we really view those costs as a marketing expense.
We also offer a 365-day return policy for people who have trouble
committing or making up their minds.
At most Web sites, the contact information is usually buried at least five
links deep and even when you find it, it’s a form or e-mail address that you
can only contact once. We take the exact opposite approach. We put our
phone number (1-800-927-7671) at the top of every single page of our Web
site, because we actually want to talk to our customers. And we staff our
call center 24/7.
I personally think it’s kind of funny when I attend marketing or branding
conferences and hear companies talk about consumers being bombarded
with thousands and thousands of advertising messages every day, because
there’s usually a lot of discussion among companies and ad agencies talking
about how to get their message to stand out.
There’s a lot of buzz these days about “social media” and “integration
marketing.” As unsexy and low-tech as it may sound, our belief is that the
telephone is one of the best branding devices out there. You have the

---

customer’s undivided attention for five to ten minutes, and if you get the
interaction right, what we’ve found is that the customer remembers the
experience for a very long time and tells his or her friends about it.
Too many companies think of their call centers as an expense to
minimize. We believe that it’s a huge untapped opportunity for most
companies, not only because it can result in word-of-mouth marketing, but
because of its potential to increase the lifetime value of the customer.
Usually marketing departments assume that the lifetime value of a
customer is fixed when doing their ROI calculations. We view the lifetime
value of a customer to be a moving target that can increase if we can create
more and more positive emotional associations with our brand through
every interaction that a person has with us.
Another common trap that many marketers fall into is focusing too
much on trying to figure out how to generate a lot of buzz, when really they
should be focused on building engagement and trust.
I can tell you that my mom has zero buzz, but when she says something,
I listen.
To that end, most of our efforts on the customer service and customer
experience side actually happen after we’ve already made the sale and
taken a customer’s credit card number. For example, for most of our loyal
repeat customers, we do surprise upgrades to overnight shipping, even
though we only promise them standard ground shipping when they choose
the free shipping option.
In conjunction with that, we run our warehouse 24/7, which actually
isn’t the most efficient way to run a warehouse. The most efficient way to
run a warehouse is to let the orders pile up, so that when a warehouse
worker needs to walk around the warehouse to pick the orders, the picking
density is higher, so the picker has less of a distance to walk. But we’re not
trying to maximize for picking efficiency. We’re trying to maximize the
customer experience, which in the e-commerce business is defined in part
by getting orders out to our customers as quickly as possible.
The combination of a 24/7 warehouse, surprise upgrades to overnight
shipping, and having our warehouse located just fifteen minutes away from
the UPS Worldport hub means that a lot of customers order as late as
midnight EST, and are surprised when their orders show up on their
doorstep eight hours later. This creates a WOW experience, which our

---

customers remember for a very long time and tell their friends and family
about.
We receive thousands and thousands of phone calls and e-mails every
single day, and we really view each contact as an opportunity to build the
Zappos brand into being about the very best customer service and customer
experience. Seeing every interaction through a branding lens instead of an
expense-minimization lens means we run our call center very differently
from most call centers.
Most call centers measure their employees’ performance based on
what’s known in the industry as “average handle time,” which focuses on
how many phone calls each rep can take in a day. This translates into reps
worrying about how quickly they can get a customer off the phone, which
in our eyes is not delivering great customer service. Most call centers also
have scripts and force their reps to try to upsell customers to generate
additional revenue.
At Zappos, we don’t measure call times (our longest phone call was
almost six hours long!), and we don’t upsell. We just care about whether the
rep goes above and beyond for every customer. We don’t have scripts
because we trust our employees to use their best judgment when dealing
with each and every customer. We want our reps to let their true
personalities shine during each phone call so that they can develop a
personal emotional connection (internally referred to as PEC) with the
customer.
Another example of us using the telephone as a branding device is what
happens when a customer calls looking for a specific style of shoes in a
specific size that we’re out of stock on. In those instances, every rep is
trained to research at least three competitors’ Web sites, and if the shoe is
found in stock to direct the customer to the competitor. Obviously, in those
situations, we lose the sale. But we’re not trying to maximize each and
every transaction. Instead, we’re trying to build a lifelong relationship with
each customer, one phone call at a time.
A lot of people may think it’s strange that an Internet company is so
focused on the telephone, when only about 5 percent of our sales happen
through the telephone. In fact, most of our phone calls don’t even result in
sales. But what we’ve found is that on average, every customer contacts us

---

at least once sometime during his or her lifetime, and we just need to make
sure that we use that opportunity to create a lasting memory.
The majority of phone calls don’t result in an immediate order.
Sometimes a customer may be calling because it’s her first time returning
an item, and she just wants a little help stepping through the process. Other
times, a customer may call because there’s a wedding coming up this
weekend and he wants a little fashion advice. And sometimes, we get
customers who call simply because they’re a little lonely and want someone
to talk to.
I’m reminded of a time when I was in Santa Monica, California, a few
years ago at a Skechers sales conference. After a long night of bar-hopping,
a small group of us headed up to someone’s hotel room to order some food.
My friend from Skechers tried to order a pepperoni pizza from the room-
service menu, but was disappointed to learn that the hotel we were staying
at did not deliver hot food after 11:00 
PM
. We had missed the deadline by
several hours.
In our inebriated state, a few of us cajoled her into calling Zappos to try
to order a pizza. She took us up on our dare, turned on the speakerphone,
and explained to the (very) patient Zappos rep that she was staying in a
Santa Monica hotel and really craving a pepperoni pizza, that room service
was no longer delivering hot food, and that she wanted to know if there was
anything Zappos could do to help.
The Zappos rep was initially a bit confused by the request, but she
quickly recovered and put us on hold. She returned two minutes later,
listing the five closest places in the Santa Monica area that were still open
and delivering pizzas at that time.
Now, truth be told, I was a little hesitant to include this story because I
don’t actually want everyone who reads this book to start calling Zappos
and ordering pizza. But I just think it’s a fun story to illustrate the power of
not having scripts in your call center and empowering your employees to do
what’s right for your brand, no matter how unusual or bizarre the situation.
As for my friend from Skechers? After that phone call, she’s now a
customer for life.

---