Last week, Zappos CEO Tony Hsieh died unexpectedly at age 46. Zappos is an online shoe retailer that was sold to Amazon for over 1 billion US$ in 2009.
Tony was a true master of the experimental aspects of innovation which led to both many successes and many failures. His 2010 book 'Delivering Happiness' introduced me to him and his thinking. It documents his wild journey in creating his company.
The key to success for Zappos was not the functional job of efficient delivery of a pair of shoes. Tony realised that focusing on just the functional part of the job would lead to a downward spiral. Everyone can optimize a delivery process. Trying to win customers by lowering your prices or outspending on advertising is a race to the bottom. Instead, he focused on the emotional job of 'making me feel valued as a customer'. He was obsessed with customer service, making it the core of his offering. Imagine getting an e-mail response from a company within 10 minutes! Imagine a customer service employee discussing the pro's and con's of different sneakers with you for an hour. That's how he was able to build a winning brand in a market with otherwise little differentiation.
Automation and cost-cutting have been the norm in customer service for decades. I love how Tony managed to prove that a human connection can be a winning business strategy.