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The Service Company that Happens to Sell Shoes. Tony Hsieh, Zappos CEO, on Delivering Happiness

Tony Hsieh is the CEO of US based Zappos.com, an online apparel and shoe store (the largest online shoe store in world), which has now been acquired by Amazon. Prior to joining Zappos, Tony co-founded the internet advertising network LinkExchange which he sold to Microsoft in 1999 for $265 million. In this video Tony talks about his early experiences as a young entrepreneur and how they influenced the development of Zappos.com, particularly describing how the company focuses on keeping its customers and employees happy.

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Video – 10 mins plus

Externally most people think of Zappos as an online shoe retailer. Tony gives us another perspective on the company. Zappos has an internal philosophy where they think of themselves as a “service company that happens to sell shoes”. The aim of the company is for their brand to be about the very best customer service and customer experience that they can deliver online and offline. They do this through Delivering Happiness for their customers and their employees.

When Tony was a student he ran a pizza company with a friend. Alfred, one of his customers, would buy a large peperoni pizza from him every night and often more than one. Tony later found out that Alfred would buy the pizza and then re-sell it to his fellow students charging by the slice. Alfred later became the Chief Financial Officer (CFO) of Zappos.

After the Pizza business Tony Co-Founded LinkExchange, selling online advertising space. They grew the company to over 100 employees and within two and half years had sold it to Microsoft. Their strategy of hiring friends and friends-of-friends worked really well for them until they ran out of friends to hire and started to recruit strangers. Tony recounts that during this time they didn’t really pay attention to the company culture. As LinkExchange grew and the culture changed he quickly reached a point where he dreaded going into work for his own company every day. This experience has had a marked effect on the way that Tony has developed Zappos.

In the video, Tony says he took a step back and realised that great service is about making customers happy and company culture is about making your employee’s happy, so with Zappos they combined the two and made a single aim of simply Delivering Happiness.

To do this Zappos took the money that they would spend on paid advertising and spent it on delivering customer service and customer experience.

10 key tips Tony gives away are:

  1. Zappos focus on repeat sales: 75% of sales are from repeat customers.
  2. Spend money on making you customers happy and let them do the marketing for you.
  3. Company Culture is the number one priority for success.
  4. Hiring employees who fit the culture is really important. Every employee that joins Zappos has two interviews, one looking at their expertise and experience, and the second one assessing if they fit the Culture. Individuals have to pass both interviews in order to work at Zappos. Each employee is initially given 5 weeks of training and at the end of the training they are offered around $4,000 to quit.  This ensures that Zappos hire employees that really believe in what they do and who automatically live the brand.
  5. Have company values that you truly commit to and make sure that they are not just stated they practiced.
  6. Create a culture where employees feel comfortable being themselves, it will make ideas flourish.
  7. Think of your call centre through a branding lens not a sales lens.
  8. Have a vision that has a higher purpose and is more than profit, you will create a better company and ultimately earn more money.
  9. Facebook and Twitter work well when the projected company image is the same as the actual company culture.
  10. Build your brand one story at time.

Tony Hsieh was a key speaker at the Wavelength Connect event On Your Marks 2011.

View more videos from Tony Hsieh


Zappos.com was founded in 1999 by Nick Swinmurn with the aim of offering the best online selection in shoes in terms of brands, styles, colours, sizes and widths. As the company developed the company focus became more about offering the absolute best service online in any product category.

Zappos has a very open culture and the multiple company websites are full of interesting insights into how the company runs. Here are some pages you should take a look at:

  1. About Zappos
  2. The Zappos story – In the Beginning
  3. Zappos Insights – a website full of information and tools for creating the company culture you desire. This site also includes a range of useful factsheets coving customer service, recruiting, training etc.
  4.  Zappos Blogs
  5. And of course their main website 
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