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Delivering Happiness: A Path to Profits, Passion, and Purpose by Tony Hsieh

Delivering Happiness

by Sheldon Nesdale on 4 September 2014

in Business Book Summaries, Ecommerce, Marketing, Sales, StartUp Business

Here are my notes on the book “Delivering Happiness: A Path to Profits, Passion, and Purpose” by Tony Hsieh51oR41Z4zoL._SY344_BO1,204,203,200_

Tony Hsieh is the CEO of Zappos, which is now wholly owned by Amazon and sells a wide range of items online, but made it’s start selling shoes online.

It’s the classic start-up story many of us dream of: a couple of friends get together and quit their jobs on the back on a single idea, they make it through the good times and bad times and desperate times to somehow scale it up to a billion dollar company within 10 years.

Here’s a collection of my favourite quotes from the book:

Network or Friendships?

  • My advice is to stop trying to “network” in the traditional business sense, and instead just try to build up the number and depth of your friendships, where the friendship itself is its own reward.
  • The more diverse your set of friendships are, the more likely you’ll derive both personal and business benefits from your friendships later down the road.
  • You won’t know exactly what those benefits will be, but if your friendships are genuine, those benefits will magically appear 2–3 years later down the road.

Focus on Existing Customers Or Find New Ones?

  • Even though it would hurt our growth, we decided to cut most of our marketing expenses, and refocused our efforts on trying to get the customers who had already bought from us to purchase again and more frequently.
  • Little did we know that this was actually a blessing in disguise, as it forced us to focus more on delivering better customer service.
  • In 2003, we would decide to make customer service the focus of the company.

A Competitive Advantage That Can’t Be Copied

We didn’t know it at the time, but all the hard work and investments we made into customer service and company culture would pave the way for us to hit our goal of $1 billion in gross merchandise sales in 2008—two years ahead of our original goal of 2010.

Looking back, a big reason we hit our goal early was that we decided to invest our time, money, and resources into three key areas:

  1. customer service (which would build our brand and drive word of mouth),
  2. culture (which would lead to the formation of our core values),
  3. and employee training and development (which would eventually lead to the creation of our Pipeline Team).

Even today, our belief is that our Brand, our Culture, and our Pipeline (which we internally refer to as “BCP”) are the only competitive advantages that we will have in the long run.

Everything else can and will eventually be copied.

A Picture Is Worth…

A word is a word, and a picture is worth a thousand… but a brand is worth a million.

Call Centre’s Are Expenses To Minimise?

  • 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.
  • 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.

Top 10 Ways to Instill Customer Service into Your Company

  1. Make customer service a priority for the whole company, not just a department. A customer service attitude needs to come from the top.
  2. Make WOW a verb that is part of your company’s everyday vocabulary.
  3. Empower and trust your customer service reps. Trust that they want to provide great service… because they actually do. Escalations to a supervisor should be rare.
  4. Realize that it’s okay to fire customers who are insatiable or abuse your employees.
  5. Don’t measure call times, don’t force employees to upsell, and don’t use scripts.
  6. Don’t hide your 1-800 number. It’s a message not just to your customers, but to your employees as well.
  7. View each call as an investment in building a customer service brand, not as an expense you’re seeking to minimize.
  8. Have the entire company celebrate great service. Tell stories of WOW experiences to everyone in the company.
  9. Find and hire people who are already passionate about customer service.
  10. Give great service to everyone: customers, employees, and vendors.

Example of Building Culture: The Face Game

  • In most companies, logging in to the computer systems requires a login and password.
  • At Zappos, an additional step is required: a photo of a randomly selected employee is displayed, and the user is given a multiple-choice test to name that employee.
  • Afterward, the profile and bio of that employee are shown, so that everyone can learn more about each other.
  • Although there is no penalty for giving the wrong answer, we do keep a record of everyone’s score. Internally, we refer to this as “The Face Game.”

Zappos 10 Core Values

We’ve formally defined the Zappos culture in terms of 10 core values:

  1. Deliver WOW Through Service
  2. Embrace and Drive Change
  3. Create Fun and a Little Weirdness
  4. Be Adventurous, Creative, and Open-Minded
  5. Pursue Growth and Learning
  6. Build Open and Honest Relationships with Communication
  7. Build a Positive Team and Family Spirit
  8. Do More with Less
  9. Be Passionate and Determined
  10. Be Humble

From Delivering Shoes To Delivering Happyness

In 2009, we expanded our vision and purpose to a simple statement: Zappos is about delivering happiness to the world. It’s been interesting to look at the evolution of the Zappos brand promise over the years:

  • 1999—Largest Selection of Shoes
  • 2003—Customer Service
  • 2005—Culture and Core Values as Our Platform
  • 2007—Personal Emotional Connection
  • 2009—Delivering Happiness

Delivering Happyness

Happiness is really just about four things:

  1. perceived control,
  2. perceived progress,
  3. connectedness (number and depth of your relationships),
  4. and vision/meaning (being part of something bigger than yourself)

Chip Conley’s book Peak does an excellent job of describing how Maslow’s Hierarchy can be condensed to three levels for business purposes and applied to customers, employees, and investors.

The fundamental premise behind Maslow’s Hierarchy of human needs is that once a person’s survival needs are met (food, safety, shelter, water, etc.), then humans are more motivated by other non-materialistic needs such as social status, achievement, and creativity.

  • Customers: Meets expectations >> Meets desires >> Meets unrecognized needs
  • Employees: Money >> Recognition >> Meaning
  • Investors: Transaction Alignment >> Relationship Alignment >> Legacy

What I Got Out Of This Book

This is exactly the slap in the face that I needed at this point in my life.

I’ve been a marketing professional for 8 years so you’d think I have a good handle on the definition of the word “marketing” but I have just realised that I don’t.

My definition continually evolves.

More recently I saw it as synonymous with advertising (which I think of as outward facing), but this book was a timely reminder that marketing is equally inward facing – focusing on your existing customers first, instead of so eagerly looking for new ones.

I am thankful for that wake up call.

Your Thoughts?

Have your say in the comments section.

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