Five lessons from the undisputed king of customer service: Tony Hsieh

People around the world were saddened this week to hear about the loss of Zappos founder, Tony Hsieh.

Hsieh was renowned for his approach to customer service, building Zappos from the ground up on the premise that “customer service shouldn’t just be a department; it should be the entire company”.

And whether it was the empowerment he instilled in Zappos employees to make great decisions on behalf of the customers – or the belief that great customer service was a better form of marketing than paid advertising was – there will long remain much to learn from Hsieh’s understanding of constructing a modern business centred around its customers.

Service is hired, not trained

One of Hsieh’s firm beliefs in the early days of Zappos was that you can't teach great customer service - you “need to hire people apt to providing it”.

The company has always had a rigorous approach to staff selection, with employees being hired based on core values relating to their will to learn, their determination, communication and ability to innovate. Ultimately, as former director of brand marketing and business development at Zappos, Aaron Magness explained in an interview with MyCustomer in 2010, Hsieh’s hiring process was always about "finding people passionate about delivering great customer service":  

“What we find is that over time every customer calls our call centre at least once in their customer lifetime. We want to make sure that whenever that call does happen, they experience the best customer service ever.

“That is why when you call you don't have to go through 14 different phone trees. That is why when you call you are not talking to someone who doesn't work for Zappos – because at that point, it really doesn't matter if you outsource to Iowa or India, if they are not employees, there is potential to have a bit of a disconnect from the high level of service that we want Zappos to be known for."

Service is a culture

As explained by MyCustomer contributor Gerry Brown in 2018, a key part of the ethos at Zappos in the early days was about instilling a culture that everyone bought into, as the company scaled.

Hsieh articulately and succinctly captures the upside of starting with culture in his book Delivering Happiness:

“At Zappos, our belief is that if you get the culture right, most of the other stuff – like great customer service, or building a long term brand or passionate employees and customers - will happen naturally on its own.”

And as Magness further elaborates: "Even before you get in the door, are you a culture fit? Would you fit in with this type of environment? And once you are in the door, it's not ‘are you a culture fit’ anymore, but ‘how are you enhancing the culture, what are you doing to drive the culture and keep it strong?’

“As a business scales and you go from 10 employees to 100, to 1,000 to 2,000, if you're built on customer service, culture is going to continue to be the most important thing, and as you scale you need to ensure that that is always at the forefront of what your best efforts are. And that's why it continues to always be 50% of how you're measured at Zappos."

The annual Zappos Culture Book – written by its employees with the aim of highlighting the great work they’ve done to reinforce the company’s culture year on year – is testament to the strength and durability of this approach.

Service can be a powerful marketing tool

As explained in a MyCustomer article by Dominic Kitchen, Zappos “attributes much of its success to word of mouth. They have never had big advertising budgets, and from day one the company has focused on building the business through word of mouth”.

Social media played a key part in spreading the message, of course – but as Tony Hsieh explained in a 2009 TechRepublic interview, it was always the reaching out to, and speaking with, customers that actually got people spreading the word.

“We don't really look at Twitter as a marketing vehicle, so we don't look at how it translates into the bottom line. What we care about is being able to connect with our customers on a more personal level. We do that through the telephone as well as through Twitter. Nobody writes about the telephone because it's not an interesting news story, but we believe it's actually one of the best branding devices out there,” Hsieh stated.

Service means empathy

As most of us have witnessed in 2020, the coronavirus pandemic has revealed the authenticity of brands that state they genuinely care and empathise towards customers.

Whilst some brands floundered about how they could best offer customer service in unprecedented environment, Zappos was able to lean on the culture Hsieh had instilled in the company to deliver something meaningful, innovative and truly empathetic.

As MyCustomer contributor Samantha Herzing explains: “The idea for a “Customer Service for Anything” hotline emerged from an internal entrepreneurial thinking initiative.

“The hotline leveraged [Zappos] customer service representatives to help people feel less alone or find answers to questions ranging from Netflix recommendations, to grocery store inventory, to local restaurant delivery. The buzz from the service even reached a medical professional, who was able to leverage Zappos customer support to research and procure dwindling medical supplies.”

Service is about constant innovation

The principles of halocracy will forever be synonymous with Zappos, and Hsieh. Introduced into the company in 2017, the new approach to corporate structure was seen as un-Zappos like by some, and an indication that Amazon’s recent buy-out of the company had pushed things in the wrong direction.

Halocracy was dropped by Zappos in January 2020 to very little fanfare – with many declaring the experiment as a failure – yet the rationale behind it remains clear: to innovate in the name of customer service.  

And whilst Halocracy may have been dropped, it clearly created an evolution of Zappos’ core values that asked for employees to be entrepreneurial in their mindset and to be autonomous in helping the company progress its approach to customer service.

As Zappos employee Jordan Sams explained in a MyCustomer interview in 2017, Halocracy’s introduction did have a positive effect on many employees and their ability to deliver customer service, despite the detractors: 

“An employee on the customer service frontline can take a suggestion from a customer and bring it up to the top of a circle straight away. It’s a clearer process. We’re not suggesting this sort of thing wasn’t possible before, it’s just a whole bunch easier now. They don’t have to go through a chain of command to get an idea in front of a wider audience. This is massively empowering for staff and shortens the distance from conception of an idea from our employees, to roll-out.”

In many ways this was always one of the fundamental principles Tony Hsieh started out with when he launched Zappos, and why his legacy will always be intertwined with pushing the envelope for customer service innovation.