I’m a fan of studying businesses. They provide awesome insights into what works and what doesn’t work. The real world is the best test of a business plan and its execution.
One of the businesses that I love reading about is Zappos.com. If you haven’t heard of them you need to check them out HERE. Here is a really brief background:
Zappos.com was founded in 1999 with the goal of becoming the premiere destination for online shoes (according to their website).
Not only have they reached this goal, but they have done it while generating crazy revenue. In 2007 they did $US800m and in 2008 they apparently did $US1b. In fact, they have been so successful that mid last year they were acquired by the original online superstore, Amazon. The deal was worth, wait for it, $US940m in cash and scrip. Not bad, not bad at all.
However, the success of the Zappos.com is not what ultimately makes it interesting. But it is how they have done it that makes it such a great case study.
Tony Hsieh has built a billion dollar business on the back of a very simple ethos – deliver ‘wow’ through service (check out their other core values HERE. How do they execute on this? Well, look at this list of unheard of services for a retailer:
- Free shipping for purchases and returns.
- A 365-day return policy.
- A call centre that is always open.
Not only do they keep it simple with their customers (and deliver) they also keep it really simple with their employees. In fact the stories are legendary. Like the $2,000 quitting bonus. Yes, that’s right they pay people to quit after they complete their initial training! The reason is simple – if you are here for the money then we don’t want you. And yes it does work. According to the stats 97% of people stay.
It just goes to show if you keep it simple and go to the core of what your customers want you can build a best in class business.
Footnote: Check this presentation out by CEO, Tony Hsieh to get a feel for the passion behind this brand.
Update: Check out this interview with Tony Hsieh.