In Delivering Happiness, Zappos CEO Tony Hsieh describes his journey in building Link Exchange which sold for about $200 million and Zappos which was recently acquired by Amazon for about $1 billion. The book is written like an autobiography and is very honest and open. You learn some interesting things about him like how he quit his first job at Oracle basically because he was bored and walked away from 20% of his $40 million share of Link Exchange because he didn’t want to stay at the company for another year. He also shares the lessons he learned and insights into his successful approach. Here are some of the marketing lessons I took away from reading Delivering Happiness:
Focus on existing customers
Early in Zappos history, the company struggled to survive and did not have money for a marketing budget. So out of necessity they focused on existing customers. This strategy worked very well as the company grew to over a billion dollars on sales, mostly from repeat purchases. According to the book Flip the Funnel by Joseph Jaffe, 75% of Zappos’ sales comes from repeat customers.
Get PR by continuously wowing your customer
Zappos gets a tremendous amount of good PR, but Hsieh says that they did not actively try to push their messages into the news. Often someone would report on something that Zappos had been doing for years and it would spread like wildfire. By doing remarkable things for their customers, employees and even vendors they received a ton of attention, even though some members of board sometimes referred to Zappos’ unique approaches as “Tony’s social experiments”.
Surprise your customer by overdelivering
One way that Zappos provides exceptional service is by providing customers with surprise overnight shipping. Some customers’ orders are delivered to their doorstep the very next morning which provides a remarkable experience worth sharing.
Create a great customer experience
Early on, Zappos made most of its profits from drop shipping products to customers, however this could result is dissatisfaction if an item on the website was not available from the manufacturer at a given time. So Zappos made the decision to halt its profitable drop shipping segment and only sell items that are held in their warehouse.
Create a great culture
Working at a call center is not typically a glamorous job and as a result many companies have disengaged employees who are directly interacting with customers. Zappos created a great culture that focuses on the people of the company, which has helped create highly engaged customer service agents that provide superior service to customers. Employees are encouraged to take company sponsored courses so that they can grow and get promoted, and Zappos consistently demonstrates that they care about their employees by paying for a funeral reception or giving every employee a Kindle when they sold to Amazon.
Ultimately people want to be happy
Tony is interested in the science of happiness and integrates findings from the field of positive psychology into his business. By providing employees with a greater purpose and opportunities for growth rather than focus on monetary rewards, Zappos employees are highly motivated. He also understands that experiences contribute to happiness more than material possession, thus the focus on customer experience. Towards the end of the book he asks the simple but often overlooked question “what is your goal in life?”. If you follow up that question with a lot of “whys”, you will eventually get to the answer that is essentially “because I want to be happy”. This revelation has lead to the latest iteration of Zappos’ brand promise, “delivering happiness”.