Tony Hsieh’s rise to business icon is the stuff of entrepreneurial legend. After a stint running a pizza business while at Harvard University in 1994, Hsieh headed west to found LinkExchange, an online advertising cooperative, which he later sold to Microsoft Corp. for $265 million.
From there, the former Zappos.com CEO — who died on Friday at age 46 — established the venture capital firm Venture Frogs, which invested in, among other companies, an online shoe retailer named ShoeSite.com, to be renamed Zappos.com. Two months later, Hsieh joined the company full time as CEO. In 2009, he sold it to Amazon for $1.2 billion and continued to run the business independently.
Burned from the experience with his first company, LinkExchange, which grew large and impersonal, the CEO used Zappos as a platform to champion connectedness and employee relationships, and looked for ways to bring happiness into the workplace.
When asked last year about his biggest career accomplishment, he responded with an answer that didn’t surprise anyone who knew him well: “The relationships and friendships. We focus a lot on company culture, so these are not just co-worker relationships but true friendships, where people choose to hang out with each other after work or go on trips together. [That also applies to] the relationships with our vendors and other business partners.”
Hsieh built Zappos as a “service company” — and his formula became a model for many other internet startups. Read more here.
Intro: [00:00:01] Broadcasting live from the Business RadioX Studios in Atlanta, it’s time for Customer Experience Radio. Brought to you by Heineck and Company, real estate advisors specialized in corporate relocation. Now, here’s your host, Jill Heineck.
Jill Heineck: [00:00:18] Good morning and welcome to this very special edition of Customer Experience Radio. I’m your host, Jill Heineck. I’m a business owner, real estate adviser, and customer experience enthusiast. I thought it would be really cool to air this special episode in honor of Tony Hsieh, the former CEO of Zappos, who passed away before Thanksgiving at the age of 46. His loss is devastating to the world, being one of the world’s most beloved CEOs and mentors, a pioneer, and a trailblazer in the customer service space.
Jill Heineck: [00:00:51] Joining me this morning is our famed producer, Lee Kantor. He’s going to talk with us a little bit about how Tony also impacted him and his business. And I just wanted to kind of highlight how the lessons that I’ve learned from Tony and his business and listening and reading all things Tony Hsieh. If you’re in business, you’re in customer service. And whether it being client or end user facing or internal client or employee facing, you’re in customer service. The difference between Zappos led by Tony, and the rest of us, was his willingness to be authentic to himself, his beliefs on what could be, and to color outside the proverbial company lines. Would you agree with that, Lee?
Lee Kantor: [00:01:36] One hundred percent. I’m a superfan of Tony Hsieh. And he demonstrated his beliefs through action at Zappos and throughout all of his work in his lifetime.
Jill Heineck: [00:01:48] That’s right. And I think, you know, once he was able to prove and put everything into action, I think people were like, “How do we do that?” How do we model after what he’s been able to take, you know, what was a losing company into a multi, probably, billion dollar company at this point. And, you know, I think that while we all can’t be a Tony or a Zappos, I know we’re all inspired about what he accomplished and how he took customer service and experience to the highest of levels.
Jill Heineck: [00:02:22] In his book, Delivering Happiness – which, in my opinion, should be required reading for every company – Tony listed out the top ten ways to instill customer service into your company. Now, he kind of used customer service a lot, but I thought, you know, the way I read it, it’s really building that customer experience out. Service, I think, has been interchangeable with experience over the last several years. But I think as we get into when people are actually client facing, I think the experience is what we’re all trying to focus on. I don’t know, it’s not tangible enough. But, I think, this list is a great example of how to build out a service focused company based on the experience that the customer has.
Jill Heineck: [00:03:09] Tony and his team decided they wanted to build a brand around the very best customer service and very best customer experience. So, he thought if you got the culture right and you got everybody excited internally, that great experiences would come naturally. So, number one on his list was make customer service a priority for the whole company, not just the department. So, the customer service attitude needs to come from the top. And Tony focused on building repeat customers and word of mouth marketing, which is exactly what, I think, many of us strive to do. His belief that happy customers are the conduit to satisfied customers who would return again and again was ahead of its time. And how many companies, much like mine and yours, a model today, would you agree?
Lee Kantor: [00:03:56] Yeah. I think that, to me, this is all about empathy. And to really and truly understand and kind of walk in the shoes of and look through the eyes of your customer, what’s in it for them, how can you help them win, what do you have to do tangibly to kind of help them make all their dreams come true. And if you’re thinking about that all the time and adding layers and layers of your service to helping them succeed, then you are going to wow the customer, which is something that he is shooting for at every stage throughout the company, not just the sales guy, not just the account rep, but the accountant, the person who answers the phone. Everybody has that in mind that they’re trying to wow the customer, then good things are going to happen and you’re going to have customers for life, which was his objective.
Jill Heineck: [00:04:43] That’s right. And that, ironically, brings me to number two on the list, make wow a verb that is a part of your company’s everyday vocabulary. So, I think this is such an important part of everyday function. It should be. It is at our company, at Heineck and Company. And you know, the question you should be asking yourself as a business owner or as a leader is, is it ours as well? In fact, this year, actually, we are launching for 2021 a newly branded program, Surprise and Delight, in the spirit of wow. And it really is, you know, something that you want to bring to your customer.
Jill Heineck: [00:05:24] Every milestone of the customer experience should be a wow opportunity. And I think that’s one thing that Tony really kind of enforced and tried to empower his team and understanding that, you know, if you can make that customer feel cared for, then it’s just going to continue to create a great experience for them. Have you, Lee, seen or experienced lately any company that’s really kind of wowed you, for lack of a better word?
Lee Kantor: [00:05:59] Let me think.
Jill Heineck: [00:05:59] Or lately maybe.
Lee Kantor: [00:06:01] Customers that have been on my radar that have kind of gone above and beyond and wowed me?
Jill Heineck: [00:06:07] Right.
Lee Kantor: [00:06:07] I’m trying to think, I recently stayed at Hilton Head. And the company that was a management company of the Airbnb or the home that we rented there really did a great job of being proactive and thinking of problems – or not problems – just opportunities for me to have more fun and my family to have more fun that it wouldn’t have occurred to me. And they did it in a very elegant way. They added in services and built it into the process and included that as part of this overall kind of price for the experience. So, it wasn’t something that we consider doing, but we ended up doing because they thought of it ahead of time.
Jill Heineck: [00:06:50] I love that. I love that when it’s preempted and, you know, they’re kind of anticipating your every need and possible want. And I think that makes such a big difference in your experience. And then, the chances of you booking at that property again are probably pretty, pretty high.
Lee Kantor: [00:07:07] Right. Well, this is the thing that I think people have to understand. When you have a team, like you have a team at Heineck and Company, and if everybody on the team – it doesn’t matter if they’re customer facing or not – if they’re thinking about ways to make the customer’s experience better – and that could be the billing person, “Hey, you know what? At the bottom of an invoice, let’s put this thing in here or, you know, something that makes them smile.” There was a company that was selling things online and they would put in, like, some Milk Duds in the box. Just like you open up and you’re like, “Oh, look. Milk Duds.” You know, that cost them, like, nothing, pennies. But it was something that just brought a smile to somebody. That was somebody in the shipping department thought of that.
Lee Kantor: [00:07:49] So, everybody can participate on this wow project. You know, it doesn’t have to just be the people that are customer facing. I think that’s a big takeaway here, that you have to include everybody on your team to get everybody thinking that way. Then, you’ll really create that culture of wow. It won’t be just initiative that comes and goes. If everybody really believes and buys in and is brainstorming and thinking of ways they, as an individual, can wow the customer, then you’re going to really live into those values.
Jill Heineck: [00:08:20] That’s right. That’s right. And, you know, going back to number one on the list, is making customer service a priority for the whole company, not just the department. And, also, the customer service attitude needs to come from the top. So, it’s not just you get in your training, and now, you know, you’re let loose into the company, and you hope and pray that it sticks. It’s every day. And I think Tony just lived that every day and his team lived that every day. And that made such a difference in their business. And that is something, I think, a lot of us strive for. Which brings me to number three, to empower and trust your customer service reps or your customer experience reps. Trust that they want to provide great service because they actually do. And this is something that resonates a lot with me. Most people want to do right by others. Most people want to please others and take care of others.
Jill Heineck: [00:09:21] And much like co-founder Horst Schulze of the Ritz Carlton Hotels, Tony empowered his team to use their judgment. He would say, “Be yourself, use your head.” Instead of focusing on guidelines and policies, like most corporations, he emphasized culture and values instead. Be authentic, be human centric, be customer centric. He believed that if you could get your culture right – one way is by empowering them – the delivery of great customer experience and service and building a long term brand or business would be a natural byproduct. How many companies have you seen or experienced lately, Lee, that you could feel that from them?
Lee Kantor: [00:10:00] Yeah. Well, sadly to me, it’s less and less. And, to me, it should be more and more, especially in today’s world where it’s so easy to kind of automate so much a business now and that they’re just taking the human factor out of it. I think one of the great things that Tony did at Zappos was, he didn’t kind of time the amount of time that a call center person was on the phone. And I think that that kind of changed the game. Because everybody hates going through a phone tree. Everybody hates the fact that they’re just trying to move you on. And then, you go to the next person and then that person acts like you’re a complete stranger. They don’t know who you are. And we’re just getting frustrated by that. When he took them off the clock and said, “Hey, talk to him as long as they need to talk to you.”
Lee Kantor: [00:10:49] You know, that’s to buy shoes. I mean, imagine if they had that attitude in, like, things that really mattered, like healthcare or something — services and they had that attitude there, I mean, that would change how everybody feels about this stuff. And he was doing it for shoes. And that was game changing. It was a mental shift and that was important. And I think that’s why his book resonates, because it got people to think differently. We don’t have to keep track of things that maybe the accounting department wants us to keep track of. Let’s focus on the human being here and what really serves them. And let’s keep track of metrics that matter from that standpoint.
Jill Heineck: [00:11:30] Exactly. And to your point, you know, Zappos sells shoes. And he had admittedly said that he knew nothing about shoes. In fact, he had been wearing the same Asics and flipflops forever. And so, forgetting about shoes and focusing on what really mattered, the emotional connection, that is what keeps customers coming back. And he’s been known to quip that Zappos is a service company that happens to sell shoes. And, you know, it’s funny, I’ve always thought of my business in real estate as the same. You know, we are customer experienced experts that happen to sell real estate and we just happen to focus in there.
Jill Heineck: [00:12:07] And, you know, our visionary Gary Keller of Keller Williams International, he says the same thing. He said, “First, you’re a business person who happens to specialize in real estate. So, as a business person, how are you going to continue to engage and wow the customer?” So, I think, you know, these lessons that we’re learning from Tony and how he’s built his company is really making a big difference in business.
Jill Heineck: [00:12:31] He shared a funny story in his book, Delivering Happiness, to illustrate the impact empowerment can have. So, he was at a Sketchers conference in Santa Monica. And after a long night of bar hopping, he and a group of friends went back to a hotel to order room service. But room service was closed. So, Tony dares his Sketchers friend to call Zappos and order a pizza. And the Sketchers friend told the rep who answered the phone that she was at a conference in Santa Monica and had a hankering for a pepperoni pizza but room service was closed, so could she help. The request caught the customer service rep off guard, but she quickly recovered and put them on hold. Two minutes later, she comes back with five pizza places that were still open and delivering in the area at that time.
Jill Heineck: [00:13:19] I mean, you know, Tony just dared her and he was sitting in the room when this all happened. So, it was his own thing at work right in front of him, which I thought was amazing to hear that story told by him. And he said, needless to say, the Sketchers friend became a Zappos customer for life. And he also, as a side note said, “I don’t want everyone calling Zappos ordering pizza now.” He said, “I just wanted to illustrate what this can look like.” And I thought it was brilliant.
Lee Kantor: [00:13:54] Right. And it was a risk on his part. He was hoping that his culture really was the way he envisioned it and they delivered. And I’ve heard stories the same from Nordstrom, you know, Nordstrom’s return policy. At one point, Nordstrom bought out another department store that sold tires. And then, somebody came in and said, “Okay. I want to return these tires.” And Nordstrom doesn’t — tires now. But they, somehow, accommodated that person.
Lee Kantor: [00:14:22] And it’s that kind of attitude of, if the culture really is the culture you want it to be and your people believe it to be so, then you return tires even if you don’t sell tires anymore. That’s how you you behave. Like Seth Godin says, “People like us do things like this.” If we believe that we’re here to serve the client, then we’re going to serve the client. And then, that’s our true north. And it’s easy to make decisions once you have that as your true north, you just serve the client.
Jill Heineck: [00:14:54] That’s right. That’s right. And I thought, you know, this is bringing these concepts closer to home in these pandemic times. Zappos set up a customer service, Anything hotline. And he had, like, a landing page and he also had a phone number where their team was available to talk to you about anything you felt like. Everyday issues or concerns, no purchase required, anything, even ordering a pizza. Now, it is not in service at the moment, I checked yesterday. But for the last six months, that has been up and people were just calling because they were anxious, or nervous, or upset, and not necessarily wanting to buy anything from Zappos. So, that is just, I think, again, another example of Tony’s mantra at work, which I thought was brilliant.
Jill Heineck: [00:15:49] And so, given this conversation about empowering teams, number four on his list was, escalations to supervisors should be rare. So, when you’re empowering people, the team is not having to constantly call a supervisor or a manager to come take care of a particular challenge. The same thing happened with Horst Schulze. He used to give his team – and I believe that they still do this – each of the front desk or team team members had a $2,000, basically, account where they could use that money if it was going to help solve a challenge for a client without having to call to get approval to do so. So, I think that’s such a huge impact on (A) not having to call a manager every single time an issue happens. But also the customer is super impressed by that.
Jill Heineck: [00:16:44] Number five is, realize that it’s okay to fire customers who are insatiable or abuse your employee. I’m sure we’ve all been in that situation, and, unfortunately, I was in one recently where it was a really big decision to make. And, you know, sometimes as small business owners, we have to make hard decisions. And, you know, you’re thinking about payroll. You’re thinking about, you know, what kind of impact this sale could be. You don’t want to let anybody down. You don’t want to, you know, quit on something you started. Those are all things that went through my head.
Jill Heineck: [00:17:15] But at the same time, I also wanted to be able to serve. I wanted to be in a good spot when I’m serving. I didn’t want to feel taken advantage of and abused. And those were things that were happening. And I had to make a big decision to cut the cord. And I love that he says, you know, it’s okay to do this. And so, when I did that, for me, one door closed and, literally, five or six more opened shortly thereafter. And it makes such a difference. And so, I think when you change up that energy and you give people the power to make that decision, I think that makes a big difference. Have you experienced that, Lee?
Lee Kantor: [00:17:55] One hundred percent. And not only with clients, with coworkers, and people that are part of your team. At some point, just because that person was with you at a certain point, it doesn’t mean they’re going to be with you at all the points. And if they are no longer kind of living a life that’s congruent with the culture, as the culture evolves and you’re focused on doing certain things, then you got to be okay with letting them pursue other things. If we’re all not kind of rowing in the same direction, you’re doing a disservice to the rest of the team by allowing this person, this client, to misbehave and to not really be aligned with your values anymore. Because that person, whether it’s a client or it’s a team member, if they are not kind of aligned with your values, they become a drag on the whole organization because, now, you’re role modeling that this is acceptable behavior.
Lee Kantor: [00:18:50] And if your values say it’s not acceptable behavior, then they just can’t be part of your journey anymore. I mean, they can find someone else that’s doing a similar thing that has values that are congruent with them. But I think you’re doing a disservice for the team by allowing a client or a team member to not be aligned with your culture or your values. I mean, that causes way more problems than it solves, no matter how productive that person is or how lucrative that client is.
Jill Heineck: [00:19:19] That’s right. And as a side note, part of the Zappos training process was getting them through the first week or two of training. It’s a four week training for their call centers. And as you can imagine, it’s harrowing to be on the phone all day or on Twitter responding to customer challenges, et cetera, questions. And so, during this long training, they would kind of halfway through give them the offer. And the offer was, you know, “Here’s $1,000 or 2,000 to quit now. We’ll pay you for your time, plus this bonus to leave.” And this was their way of trying to weed out the people who are culture fit or not. If they weren’t passionate about delivering a great customer experience and great customer service, then they knew so much earlier on than dealing with this later on. And I mean, that’s just brilliant who does that. But I think that they invested so much of that on the frontend so that on the backend that they could really build this great model out, and great team, and culture fit.
Jill Heineck: [00:20:27] And then, again, to your point, I mean, now you have people who are congruent with the mission of the company, and I just love that. And to that point, he also, like you said, number six was, don’t measure call times, which I love. You spend as much time as you can or need to with the customer. Also, number seven, don’t hide your 800 number. He says it’s a message not just to your customers, but to your employees as well. Like, “Don’t call us. We don’t want to talk to you.” He had the number on the Zappos site is, you know, loud and proud, high up on each and every page. You can always call.
Jill Heineck: [00:21:06] I, ironically, last night was on a website – I will not mention the name – and I could not find a phone number for the life of me. And I literally threw my phone down on the floor. Like, “How am I going to cancel my account? I can’t call these people.” And they made the cancellation so teeny, teeny, tiny at the bottom that you could miss it very easily. So, I love this idea of, you know, here we are, we’re here to help you. And that was the message. He said, “View each call as an investment in building a customer experience brand. Not as an expense you are seeking to minimize,” which so many call center operators do.
Jill Heineck: [00:21:45] Number eight, have the whole company celebrate great service. Tell stories of wow experiences to everyone in the company. I mean, this is where testimonials and fun customer experience stories, like the one we just talked about where the Sketchers gal ordered a pizza. Those are things that they celebrate inside of the company all the time. It’s not necessarily outward. But I think it gets everybody pumped and really kind of connecting with what they’re doing. Wouldn’t you agree with that, Lee?
Lee Kantor: [00:22:16] Yeah. I think that it’s important to kind of document and have this, I think they call it, culture book that people contribute to, and that really demonstrate when they have examples that demonstrate the kind of values they have and the mission that they’re on. That everybody has access to it. I think it’s available to the public even, they’re willing to share the stuff. They don’t have a very kind of closed environment. It’s an open environment. They want everybody to win. And they’re not, you know, protective about that kind of stuff. So, they love to share their values. They love to share, you know, what they’re about. And they’re proud of it.
Lee Kantor: [00:22:59] And then, when you have that kind of values and culture, it’s easy. The right people are attracted to that and the right clients are attracted to that. And it just becomes this kind of vicious spiral in the best sense of the word that’s going upward. And it’s about serving and caring. And like you said earlier, the shoes are not really the business. That might be what they’re selling, but their impact is so much greater than that.
Jill Heineck: [00:23:28] Absolutely. And to your point, number nine is, find and hire people who are already passionate about CX or customer experience. I mean, literally, like I said in the beginning, when they are training and finding and hiring people, they are weeding these people out in the beginning. And they are just really zoning in on the right fit with the same passion.
Jill Heineck: [00:23:51] And number ten, give great service to everyone, including customers, employees, and vendors. I find that some companies really do kind of don’t match up all of their service protocols with all lines inside the business. So, every business has to have vendors, and employees, and customers. And so, if you’re not in alignment and delivering that same high level of service to all, you know, kind of sectors of your business, that can become a disjointed thing. I’ve seen that in many businesses.
Jill Heineck: [00:24:27] In mine in particular, we’ve been very focused on making sure, you know, from picking up the phone and responding to someone asking about a property, to writing the contract, to inspections, to appraisers. These are all people that are part of the process. And they all need to be treated with a high level of respect and experience and service. Some companies don’t get that.
Jill Heineck: [00:24:56] How do you point that out? How do you help companies kind of get – I mean, that’s the glue to me. The experience is the glue that keeps the company together. I mean, have you seen any companies that have kind of figured it out that they were falling apart and figured out a way to come back together? Or, is there any company that stands out to you that does a really good job of connecting all their sectors?
Lee Kantor: [00:25:18] Yeah. I think that there are examples of that. But I want to first kind of address that part about hiring the right people, because I think that that makes everything work better. And when I say hiring the right people, I include vendors in that mix as well. Like, I got to interview one of the leaders of Chick-fil-A a long time ago. And one of the things that they said to me and that really stuck was, “We only hire people that naturally smile.” And I’m like, that’s brilliant, because if a person is a natural smiler, then you don’t have to train them to be nice to the person in front of them. That’s how they are. They naturally smile.
Lee Kantor: [00:26:01] So, they’re choosing the right person that go. They’re not trying to fix the wrong person. And it’s just a more efficient way of getting – the person is almost there when it comes to delivering the service they want. They’re at the finish line. You just have to kind of tweak it a little bit to get them to say what you want them to say. But they’re already doing the hard part of the smiling, and engaging, and making people comfortable. So, I think that that’s critical when you’re looking at your team, whether they be your team of vendors or the people that are working with you. So, choose the right people that are already almost there and then tweak them rather than just take anybody and try to fix them. I don’t think fixing is a good long term strategy.
Lee Kantor: [00:26:43] Now, when it comes to companies that really walk the walk in all aspects of the business, again, this is something, sadly, I think that is lacking. A lot of people can justify, “Well, I really am mean to my vendors and I squeeze them. But I’m trying to be generous in these other areas, but I’m going to squeeze the vendors like some big retailers do.” And then, they’re trying to be like, “Hey, everybody is welcome here.” It’s like you got to walk the walk everywhere. And I think the key is to have that true north, believe what you believe, and then just kind of use that as the way to make decisions. If you believe customer service or customer experience is critical, then you have to deliver that everywhere. It has to be congruent because, otherwise, you’re telling your people that you really don’t believe it. That you only believe it some of the times or only with certain kinds of people. You know, we’re super nice to our clients but we mistreat our employees. Then, you’re really not living those values. You know, you’re saying those values, but you’re not living them. The values are values because they should be throughout your entire life. It should be a 360 around your whole company. It can’t just be certain departments you believe that. And that’s how they behave.
Jill Heineck: [00:28:04] Right. Yes. I mean, you know, it not just goes to Tony’s innate understanding that, you can’t build something special in the marketplace unless you also build something powerful in the workplace. That was his mindset and it was beyond its time at the time. And I just think, like you said, you know, you can’t do it in just one area. You have to do it throughout. And whether it’s, you know, in the workplace, or at home, or in your life, if you’re not the person that lives it, then you’re probably not the fit for Zappos, for example.
Jill Heineck: [00:28:40] I certainly could go on and on and on with this, but I wanted to, at least, pay homage to a game changer, an icon, and a true customer experience champion, given that we are Customer Experience Radio. I felt like I could not let that go without paying homage to him.
Jill Heineck: [00:28:58] I really want to thank you so much, Lee, for joining me this morning. I appreciate it. Everyone, thanks for listening. I am proud to share this show with you as these stories and more prioritize the customer experience as a legit business strategy. And reminding us that no matter the business you’re in, shoes, pizza, or real estate, the customer experience should always be the heart of the business.
About Your Host
Jill Heineck is a business owner, real estate advisor, and customer experience enthusiast based in Atlanta, GA.
She is a founding partner of Keller Williams Realty Southeast, established in 1999, and the owner and managing partner of Heineck & Company, her real estate group under the KW umbrella, that specializes in Dual Sales, Relocation, Luxury Residential, and Historic Commercial districts.
Jill’s unwavering commitment to the Customer Experience, and her focus on anticipating needs of each client, serve as the foundation of her success. Her winning strategies and tenacious client advocacy have earned her a reputation for excellence among Atlanta’s top producers.
Follow Jill Heineck on LinkedIn.