Zappos – Lean Like?

The lean philosophy starts and ends with the customer.  If we are not adding value for the customer then we will not be around for very long.  I have worked in several industries and every where I have been the companies talk stress being customer focused.  Unfortunately, in every case it is just lip service.  As soon as push comes to shove, the focus is on what is best for my world or silo and we quit talking about the customer.  It can get frustrating, because there are companies that are focused on the customer and drive it as their core business value.

Zappos is one company that focuses on the customer experience.  There is a great interview with their CEO Tony Hsieh (an 18 minute video of the interview too that is worth watching).  Tony Hsieh states:

“….the ultimate aim of the Zappos brand is to be the very best when it comes to customer service and consumer experience.”

Tony goes on to say:

“In the long run, customer service is just good business,” he says. “The problem, however, is that the payoff is usually two or three years down the line.”

That sounds great.  I have heard it all before, but what actions are they taking that makes this come to life and stick to the long-term thinking?  From the article:

  • The company provides free shipping both ways
  • Zappos has a 365 day return policy
  • Only products available in the warehouse are placed on the site
  • The warehouse is open 24 hours a day
  • The company is contactable 24 hours a day, 7 days a week
  • The 1800 contact number is prominently placed on every page of the site
  • The company trusts in its reps; sales staff don’t have scripts
  • If products are unavailable, sales staff direct customers to competitors

As an online consumer, I really like the things listed above because they get to the heart of some of the issues I have had purchasing online.  There were two bullet points that caught my attention the most.  The first was The warehouse is open 24 hours a day”.  In the video, Tony Hsieh talks about this in more detail.  They understand running a warehouse 24/7 may not be the most efficient way to run a warehouse, but it drives quicker turn around of a customer order and increasing the customer experience.  Tony talks about automatically upgrading the shipping of repeat customers.  Some orders are placed at midnight and could be received 8 hrs later.  8 hrs later!  I have never received anything in less than 24 hrs and that is after paying an arm and a leg to upgrade to overnight shipping.

The second bullet point that caught my eye was “If products are unavailable, sales staff direct customers to competitors”.  If you are concentrating on delivering the best customer experience and not driving sales this makes sense.  The customer is looking for something now or maybe it is something Zappos will never carry so direct them to where they can get it.  This thought is, by doing this the customer remembers how much of a help it was for them and they come back later, building a loyal satisfied customer based.  How many of our companies would drive a customer to a competitor if we didn’t have what they wanted?

How does Zappos drive this behavior in it’s employees?

Ultimately, Hsieh believes that every company needs to determine its core values, and rather than have a vague sense of what those ideas should be, he insists it is important to select ‘committable’ core values.

So what are the 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

Doesn’t a lot of this seem very lean like?  #1 is customer focus.  #4 sounds like “creativity over capital”.  #5 is continuous learning.  #6 is respect for people.  The similarities are there.  Tony Hsieh does not claim that Zappos is a lean company.  It just seems like what we look for as lean leaders though.  Zappos has taken on trying to teach their culture to others.  There is a great blog about it and how you have to relate this to your company, not just copy and paste, which is what we have seen people do over the years from 5S to andon lights and so on.

So why hasn’t everyone heard of Zappos if they have such great customer service? In the video, Tony Hsieh mentions Zappos does not advertise much if any.  They are very reliant on word of mouth based on the customer experience.

I hope to help my company be so customer focused.  What about you?



Posted on May 22, 2010, in Customer Focus, Principles, Retail and tagged , , , , , . Bookmark the permalink. 5 Comments.

  1. What sets Zappos apart is their understanding of the respect for people pillar of lean. They recognize the ‘customer’ is not just who they sell to…customers also include folks up and down the value stream.

    Zappos digs deep with this issue as part of their Core Value #7…

    Following the link you provided…Kevin @ Evolving Excellence does a nice job highlighting the failure of simply adopting/copying best practices from other companies. That’s just trying to pursue continuous improvement without respecting your people.

    What bothers me, is that MANY of the folks doing this, KNOW it’s wrong but continue anyway. What happened to managers acting as teachers, not directors? Where are the mentors that teach those in their care about root cause analysis…letting THEM discover how to improve the process?

    Behavior like this makes you wonder where true motivations lie. Failure is looming.

    Zappos decision to ‘market’ their culture is interesting. I can’t wait to see ‘crowd negative’ start putting their spin on what they don’t understand.

    Interesting link to Zappos new ad campaign:

    They really do a nice job focusing on ALL customers!

  2. I didn’t realize people hadn’t heard of Zappos. We usually have some box either coming or going somewhere in our house.

    It all starts with principles (or values or beliefs) and then turning those principles into actions and decisions. Here’s an example. After a new employee’s 2 weeks of training, they offer to pay them $2,000 to quit. That’s right, they pay you to quit. They want you to want to work there so badly that you’ll gladly turn down the $2k in order to stay. The last I heard, they only had 1-2 people actually take the offer. That’s says a lot.

  3. Is lean really into customer service? I mean, I know is written and said but, is it really that way? Once I heard Tony Hsieh talking excitingly about how great it was that one of the guys dealing with customer service spent a 10-hour-phone conversation with a Client. Doesn’t it seem waste from the lean thinking approach? I think lean thinking works but what we’re seeing here is not lean but something greater and that the only way to become fully aware of it is by putting the lean hat off and look for something new. I’m into research now so if you want to share some thoughts, keep in touch!

  1. Pingback: Il meglio della blogosfera lean #40 — Encob Blog

  2. Pingback: Zappos – Lean Like? | Customer Service Trends & Lean Management |

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