Better Than Zappos Shopping? Working There. New employees at the online shoe retailer Zappos are given a choice: Keep your job or take a thousand bucks and run. Offering a full perspective on shoe-buying's leading Web purveyor is Bill Taylor, who wrote about the site's odd business model in Harvard Business Online.
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Better Than Zappos Shopping? Working There.

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Better Than Zappos Shopping? Working There.

Better Than Zappos Shopping? Working There.

Better Than Zappos Shopping? Working There.

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  • <iframe src="https://www.npr.org/player/embed/90714119/90714079" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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New employees at the online shoe retailer Zappos are given a choice: Keep your job or take a thousand bucks and run. Offering a full perspective on shoe-buying's leading Web purveyor is Bill Taylor, who wrote about the site's odd business model in Harvard Business Online.

As many of half the workers at Zappos, which is based outside Las Vegas, reportedly post messages to Twitter.com. Courtesy of Zappos hide caption

toggle caption
Courtesy of Zappos

MIKE PESCA, host:

Zappos.com is a website that sells shoes. You can order as many pairs as you want, try them on at your home, decide you hate them, and then send them back within a year, and it's all free. They have 24-hour customer-service lines, and when you call, you can elect to hear the joke of the day or Gladys Knight.

(Soundbite of Zappos.com customer-service hotline greeting)

Mrs. GLADYS KNIGHT (Award-winning Musician): Hi, I'm Gladys Knight.

Mr. WILLIAM KNIGHT: And I'm her husband, with a name you'll never remember.

(Soundbite of laughter)

Mrs. KNIGHT: William, and we'll be hosting today's greeting on this beautiful day in Los Vegas.

Mr. KNIGHT: Here at Zappos!

Mrs. KNIGHT: So that we can better assist you, please listen to the following options so we can best do that. OK?

Mr. KNIGHT: OK, so to place and order, please press numeral one.

Mrs. KNIGHT: If you received a call from our order-verification team, please, go ahead, press two.

MARTIN: Is Gladys hard up on times? Why is Gladys doing this?

PESCA: To which the Pips added, press two-two!

(Soundbite of laughter)

PESCA: And so it goes on, and she sings a little bit, and it's all very cute, and what the heck does it have to do with shoes? Well, let's put it this way. Zappos is a little like the Sally Field of shoes. She's spunky, she's a real sweetheart, and she seems so taken by the fact that customers like her, they really like her. Bill Taylor is a founder of Fast Company Magazine and author of "Mavericks at Work." He has studied Zappos as a company just crazy enough to work. Hello, Bill.

Mr. BILL TAYLOR (Author, "Mavericks at Work;" Founder, Fast Company): Good morning.

PESCA: Bill, I think we have to start with the Zappos policy of offers potential employees 1,000 dollars not to work there. What is that about?

Mr. TAYLOR: Well, it really goes right to Gladys Knight and her husband, I guess.

MARTIN: Good, please explain that.

(Soundbite of laughter)

Mr. TAYLOR: Zappos is now a billion-dollar-a-year company, and they offer a great selection of shoes at a great price, but what they're really trying to do is, in many different ways, strike a kind of emotional and psychological relationship with their customers, make it fun, make it surprising, make it interesting to do business with them. And to do that, you've got to have fun and interesting people working for you.

And so when they hire new people, and they're hiring - they now have 1600 employees, and this is a company that was nothing a few years ago, so they're hiring people like gangbusters. They immerse them in this four-week training program, and to be honest, it's not for everybody. I mean, the company that's this intense about what they do, there are a lot of folks who sign up and say, man, what have I gotten myself into? I'm just not that committed to what this brand is trying to do.

And so, one way to figure out whether or not the people you've hired are really in this, if their values and their mindsets really click with what you're trying to do, is to pay them to leave. And so, they train you for a week or two, and then there comes this moment they call The Offer, and they pull you into a room and they say, look, we'll give you 1,000 bucks - we'll pay you for everything you've done up to this point and we'll give you 1,000 bucks if you quit today. And basically - and by the way, this started with 100 dollars. Then they raised it to 500 dollars. Now they're going to 1,000.

As they get bigger and bigger, their big concern is, are we blanding (ph) ourselves out? Are we hiring a lot of boring people who are warm bodies that answer the phone, but aren't our type? So the thing about raising it again - and the idea is that people take them up on that, then kind of by definition, you're not a Zappos sort of person. It's actually not a bad question to ask for any - you know, Mike or Rachel, if NPR came to you and said, we'll give you 20,000 to quit tomorrow.

And you said, my goodness, I'm so excited about Bryant Park, I would never do that. That's a great sign about your personal commitment to what you're trying to build. So, as crazy as it may sound, it's actually a pretty intriguing way of making sure your people are as excited about what you're doing as the leadership of the company is.

PESCA: Do you know how many people take the offer?

Mr. TAYLOR: About 10 percent...

PESCA: Ten percent?

Mr. TAYLOR: About 10 percent of new employees take the money and run.

PESCA: And as the offer becomes...

Mr. TAYLOR: I think they're a little worried that it's too low. I mean, they actually hope - I think - let's raise the price and see if we can get out another five or 10 percent, because they really want intense commitment on the part of their people.

PESCA: Bill, as the offer becomes known, are people just going through this training with nothing in mind except I'll get reimbursed and then make the thousand on the back end? Are they worried about that?

Mr. TAYLOR: Well, I don't think - Zappos is also very intense about how they - you have to be hired in order to get the training. So they're very smart and interesting about how they evaluate you when they hire you, and they ask you all kinds of interesting questions that are trying to, again, get at your mindset and your make up, and do your values click with our values?

So, as long as they're smart about who they hire - you know, they don't just hire anybody off the street. They put them through a lot of evaluation, but the theory is, even if we think these people have passed muster, obviously, we're not going to bat 1,000 to the people to whom we extend the job offer. So let's use another way of making sure we've got really intense, committed people in our organization.

PESCA: And speaking of their values, I'm went online, they have their 10 core values posted, things like be humble, be passionate, but then some jumped out at me, stuff I've never seen like, deliver "wow" through service - the word wow - and create fun and a little weirdness.

Mr. TAYLOR: Yep.

PESCA: OK, how does that help me if I want to just buy some shoes?

Mr. TAYLOR: Well, because I think everybody - I mean, as I look at most customers and their experience of dealing with most companies, usually it's downright frustrating, and you want to - you know, call any 1-800 number and you don't get Gladys Knight. You get one of these damned computerized voice processors. You spend 25 minutes trying to reach a human being. So, with most companies, you want to pull out your hair. At best, it's kind of bland and boring and OK.

And so, if Zappos says, hey, look, people want great shoes, they want them at a great price, but if we can introduce a little levity for 30 seconds or a minute during the course of the day, what's wrong with that exactly? And oh, by the way, it's very memorable for their customers. I think, you know, every business, the Holy Grail is repeat, repeat customers, and incredibly loyal customers, and the first time you think of buying a pair of shoes, you think of, in this case, Zappos.

You don't get that just because your prices are two percent lower than the other person's, or your selection is a little bit broader. You get that because you conduct yourself as a company in ways that are really memorable to lots of people. So you know, in terms of a corporate strategy, if you will, that's what Zappos is going after.

PESCA: Is it particularly important for a thing like shoes, where you can buy the same pair of shoes from 1,000 different sites? I mean, Dell Computer doesn't have to go to this extent, right? Because, I mean...

Mr. TAYLOR: Yeah, well, look how well Dell is doing these days.

PESCA: Yeah.

Mr. TAYLOR: I think Dell's a great example of precisely this point. At some point, if all you're about is literally the nuts and bolts, the cheapest deal, you're an incredibly - and I don't mean to disrespect Dell - but you're kind of a bland, boring company to deal with, and at some point, that runs out of steam. And I think what Zappos - and by the way, lots of other companies are beginning to tumble to this - you've got to get the deal right. You've got to get the selection right.

You know, they have four million pairs of shoes in this warehouse in Kentucky. If Imelda Marcos ever walked in there, I think her head would explode when she looked at it, but - so they've got the basics of the business right. But what they're saying is, in this day and age, that's just not enough. And so the question is, what do you layer on top of that to keep you going for the long term? And their theory is you layer on personality. They've got 1600 people. Like, I think, at least half of them are Twittering, and so you go there and you go to the twitter.zappos.com there are all their, you know, 164-character haikus, whatever. What's the point of that? Again, just to inject more personality into the brand, and I think that's what so many companies are struggling to do today.

PESCA: I saw pictures of their Halloween party online. Lots of people dressed as "Star Wars" character. What's the profile of a typical Zappos employee?

Mr. TAYLOR: Well, you know, they're not necessarily - I guess you're suggesting they're kind of geeky and so on. They're...

PESCA: Oh, no. They have great taste in sci-fi. That's all.

Mr. TAYLOR: More just, I think, young spirited people. In fact the company was started in San Francisco, and fairly early on they moved from San Francisco to just outside Las Vegas, because they just couldn't hire enough people who were actually interested in customer service and dealing with, you know, real-live human beings, as opposed to, you know, sitting at a desk and writing code and, you know, watching "Star Wars" or playing "Doom" or whatever.

And so San Francisco was a great technology center and Zappos is a technology company, but what it really is, is a customer-service company. So they moved to Las Vegas, A, because obviously the, you know, the hospitality industry euphemism is there, and so it's a city built around customer service, and secondly there are a lot of call centers there for other companies. And so it's not a - it's certainly a young company. You know, if I were - I'm sort of guessing, but my guess is the median age of employees is probably 24 or 25. But it's not a geek culture. It really is quite explicitly a customer-service culture.

PESCA: And look, if they can make the job of taking calls of irate customers fun and something that people want to do to the point where they don't turn down - where they turn down a thousand bucks not to do it, they've got something right.

Mr. TAYLOR: I mean, can you imagine a tougher job than talking eight hours a day to people all around the country?

PESCA: Yeah. The word bunion must come up like dozens of times a day.

Mr. TAYLOR: Yeah. You've got to do things to make it interesting for the customers, which also means, by the way, making it fun and interesting for the employees. And by the way, no matter how high ranking an executive you are at Zappos, or how much of a total programming geek you are - because obviously technology's a big part of it - you have to go to the training course and you have to work in the warehouse for awhile.

PESCA: Thanks, Bill, for your enthusiasm. Bill Taylor is a founder of Fast Company Magazine and author of "Mavericks at Work," and thank you very much.

Mr. TAYLOR: Thanks.

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