Live From eTail 2007: Manage Culture and all Else Follows, Says Zappos CEO

The most important thing company executives can do to ensure their firms’ success is make sure everyone fits its business philosophy, according to Tony Hsieh, CEO, Zappos.com. And he’s got a drunken pizza-ordering anecdote to prove it.

“I would strongly recommend that you hire and fire people based on how they fit into the company culture,” he said during a presentation entitled Top Ten Lessons Learned in E-commerce at the eTail 2007 conference in Washington yesterday.

For example, new hires at Zappos.com go through an intensive four-week training program and then spend an additional week at the $800 million online shoe and apparel merchant’s fulfillment center in Kentucky before they start their jobs, he said.

The process is expensive, but by the time their training is over, they understand that the No. 1 priority at Zappos.com is customer service, he said.

Moreover, Zappos.com takes an extremely long-term approach to customer service, he explained.

For example, its representatives will point customers to a competitor’s site if Zappos.com doesn’t have what they’re looking for, he said.

“We’re not trying to measure any single transaction,” he said. “We’re trying to build a lifelong relationship with customers.”

He added: “Next time they need a pair of shoes, we know we’ll be the first site they go to.”

As an example of Zappos.com’s customer service culture at work, Hsieh recounted how when a customer returned a wallet, but mistakenly left $150 in it, the warehouse worker who discovered the mistake simply packaged the money up and sent it back to the customer.

“That didn’t come from our call center or customer service,” he said. “That came from a warehouse worker who understands our focus.”

He also recounted how when some Zappos.com employees who had been partying a bit too much at a conference called the company call center to order a pizza, the employee — who had no idea Zappos.com executives were on the line — put them on hold and then came back on the line with a list of 10 pizza parlors in their area.

“If you get the culture right, you don’t need to create a policy and a procedure for everything,” Hsieh said.