We can certainly follow standard protocol and analyze this by looking at the fundamentals and "usual suspect" metrics, but I suggest we take a detour and ask a few less obvious -- yet infinitely revealing -- questions. For instance, why did Amazon CEO Jeff Bezos, more than a year and a half ago, attentively and noticeably take notes near the front row at South by Southwest while Zappos Tony Hsieh talked about Zappos' culture, values and service? What could the lanky shoe guy possibly know that the former Time magazine "Man of the Year" doesn't?
Here's another one: How on earth did the CEO of a shoe company enter the "million follower" club on Twitter? I mean, isn't that club reserved for the likes of Lance Armstrong, Ashton Kutcher, Shaquille O'Neill and other mega-celebrities? What on earth could a shoe company CEO say that would keep us so engaged, eager to tell others and at times feeling a bit "religious"?
And another: How on earth can a company drive serious revenue that lets its employees do all these weird, off-protocol things like occasionally delivering pizza, not shoes, when customers call the 800 number? I mean, where's the discipline and focus, folks? Sounds like touchy-feely dot-com hype revisited, no?
Yes, I'm sure there is a mountain of analytical bean counters behind the magic numbers in this deal, but we all know what's really going on. Heck, we've been talking about it incessantly for well over two years.
Zappos is a game changer, and it found value -- and ferocious word-of-mouth and brand advocacy -- in a place most of us leave for dead and certainly don't consider even close to being a media channel: customer service. They took this "cost center" input and turned it into an unassailable asset, fortified by the founder-CEO's sometimes "cult-like" (arguably irrational, by the typical marketing book) obsession with serving the consumer at all costs. It wasn't flaky. He approached this with focus, discipline, real incentives and an obsession over a "different" set of numbers.
Zappos did this at a critical juncture for all of us. We know word-of-mouth matters. We suspect "advocacy" might be the metric that truly moves the needle. Even separate from the Amazon deal, Zappos probably did more to shape our collective mind-set around the importance of "paid" vs. "earned" media, and it titled us much toward the later.
But lest anyone mistakenly conclude this is all about Twitter -- or the "mother of all social media case studies" -- let's not forget they first focused on the boring stuff. Whenever I consult brands' social media, or what I now prefer to refer to as CRM 2.0, I insist they do two things: Call their 800 number and then try to send e-mail feedback to themselves. Most fail -- miserably. Zappos takes precisely the opposite path. It plasters the 800 number all over, even in Spanish. It recklessly (I say brilliantly) throws so-called "operational costs" to the wind and writes it off as a marketing investment. It's not just that it is "powered by service," as the tagline suggests; service is its core DNA.
If you look hard enough, you can count more than 20 service offers or invitations for feedback on the Zappos home page. Just imagine, the world's largest online retailer -- also pretty good at service themselves -- just dropped nearly a billion bucks on a company that promotes the very things we religiously hide from the consumer.
Being a "Nielsen" guy, I love numbers, data charts and trends. But sometimes you can just "feel a movement." One of my aha moments with Zappos came the night before I moderated a panel for Ad Age's 2008 Digital Conference in which the Zappos CEO was participating. My wife and I were aggressively surfing the site, looking for soft spots or vulnerabilities I could translate into an uncomfortable question to destabilize my big-fish panelist. We decided to have an online "chat" with a Zappos service representative, and started throwing her every obnoxious question we could think of.
It was like we invited her to a party. She relished in the questions. Her enthusiasm was off the charts. When we asked her what she thought of the Zappos CEO, she gushed with authentic passion because he and the rest of the management team really made employees feel special working there.
Darn if I haven't told that story a thousand times, and even included it half the industry speeches I deliver. Zappos figured out early on that customer service and employee advocacy is way better and more efficient than paid media. But unlike the rest of us, it didn't just pontificate that philosophy. It put it to work.
I think we should all buy those shoes.
|ABOUT THE AUTHOR|
Pete Blackshaw is exec VP of Nielsen Online Digital Strategic Services and author of "Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000" (DoubleDay). He is also chair of the National Council of Better Business Bureaus. His biweekly column looks at the relationship between marketing and customer service in the age of consumer control.