Zappos! and the New Marketing
September 23rd, 2010 • marketing (296)
Zappos.com – superstar e-tailer acquired by Amazon last year for $1.2 billion.
Tony Hsieh, Zappos CEO, was recently interviewed by Guy Kawasaki. The entire interview is short and worth reading, but I found the following portions quite interesting:
What is the math behind the policy of two-way free and overnight shipping?
TH: Our philosophy is to take most of the money we would have spent on paid marketing or paid advertising and instead invest it into the customer experience, and let our customers do the marketing for us through word of mouth. We view the free shipping both ways and surprise upgrades to overnight shipping as our marketing costs.
Is customer service the new marketing?
TH: What’s new is that we are all hyperconnected and information travels much, much faster than before (through Twitter, blogs, etc.) So customer service stories, good or bad, tend to spread more quickly and therefore can have a much bigger effect on a company’s brand.
What role does the plain old telephone play in Zappos?
TH: We believe the telephone is one of the best branding devices out there. We have the customer’s undivided attention for 5-10 minutes—compare that with a 30-second Super Bowl ad when the viewers are probably not paying full attention. If we get the interaction right, what we’ve found is that customers remember that for a very long time and tell their friends and family about us.
Consumers have seen every type of ad campaign, they’re being “sold to” nearly non-stop from when they wake up to when they go to sleep. Zappos’ approach is refreshing in that they are not “selling” to customers – there is no ad campaign, no commercials or gimmicks.
Here is a company that is choosing wisely the channels through which it communicates with its customers – and is owning them. Their focus is to deliver quality, value and a great experience – and that is something remarkable people want to talk about. The virility is built in, and there has never been an easier time for these stories to spread than now.
Those students with the preconception that marketing is all about manipulation and advertising should be relieved. This is exactly the type of value-based marketing the smart companies are moving toward, and quickly.
On a personal note, unfortunately Zappos did not at all deliver on their dedication to service when I placed my first order with them recently. In fact, the entire experience was quite terrible.
Consistency counts.