Five Customer-Service Lessons From the Late Tony Hsieh

Tony Hsieh, the former chief executive of Zappos.com Inc., helped build the online shoe retailer with a model of customer service that rested on a simple premise: Make every customer as happy as possible, even at the expense of sales—in the short term.

Mr. Hsieh died Friday at the age of 46 from injuries sustained in a house fire Nov. 18 in New London, Conn.

After his death, entrepreneurs, marketers and others said his insights had influenced them to adopt similar practices or change the way they approach customers.

Put the Service First

Mr. Hsieh saw the Zappos product as a service, not something physical, observers said.

He focused on building repeat customers and word-of-mouth marketing, said Wendy Johansson, global vice president of experience at digital agency Publicis Sapient, part of

Publicis Groupe SA

.

“This shifted the brand-driven retail industry from a traditional measure of eyeballs on advertising campaigns, to one focused on a better digital ecosystem around the product engagement of the retail brand,” Mr. Johansson said.

Don’t Hide the Phone Number

One way that Mr. Hsieh tried to accumulate those loyal customers was to make Zappos reachable— more so than many other e-commerce companies. Most visibly, he put the company’s customer service phone number at the top of every page on the website.

“Our belief is the telephone is one of the best branding devices out there,” Mr. Hsieh said during a talk at

Alphabet Inc.’s

Google headquarters in Mountain View, Calif., in 2010. “You have the customer’s undivided attention for five to ten minutes and what we found is if we get the interaction right, that’s something customers remember for a very long time.”

Recognize a Bigger Role for Customer Service

Many companies treat customer service as a siloed function removed from core brand-building activities. But Zappos viewed customer service through a branding lens, Mr. Hsieh wrote in a piece for the Harvard Business Review in 2010.

Unlike traditional call centers, Zappos doesn’t measure call time or require customer service agents to read from scripts. If Zappos is out of stock in a customer’s size, agents are trained to look for shoes on competitor websites and direct customers there. Customer service at Zappos became an effort to build a relationship with customers and leave them with a good impression of the brand.


“Tony taught everyone that building a great community is the secret to a great customer experience.”


— Ben Parr, president and co-founder of Octane AI Inc.

Viewing customer service through that lens can help companies keep customers for the rest of their lives, said Sandro Roco, the founder and chief executive of Gantry Brands LLC who counts Mr. Hsieh as an influence.

Megan Petrini, an onboarding manager at Zappos, said that when she was a customer loyalty team member at the company, she once told a customer who repeatedly asked to reuse coupons that her request would no longer be honored. The customer responded by saying she would email Mr. Hsieh. The next day, Mr. Hsieh left a note on Ms. Petrini’s computer, telling her to give the customer the coupon.

“Here is where I learned a very important lesson in customer service—choose the customer over the bottom line, always,” Ms. Petrini said.

Pay Workers to Quit

To weed out employees that weren’t invested in the company and its strategy, Mr. Hsieh instituted one of his most unusual strategies: offering new staff a month’s pay to quit.

That would allow employees to consider whether the company’s path was right for them without fixating on the need for money in the short term.

Jackson Jeyanayagam, vice president and general manager of direct-to-consumer at Clorox Co., hasn’t adopted the same idea, but said he was spurred by Mr. Hsieh’s example to have conversations with staff to ensure they wanted to be with the company and grow with it.

“He taught me that we all need to find out what we are passionate about and what we are not,” Mr. Jeyanayagam said. “As a leader, sometimes you have to help your people figure that out as well. Lack of employee passion in the product will translate to lack of happiness for the customer every time.”

Create Community

Mr. Hsieh built a community both within the company and those who shopped, said Ben Parr, president and co-founder of Octane AI Inc., a marketing platform that specializes in messaging and chatbots.

He also invested in the community around Zappos, putting $350 million into developing downtown Las Vegas, where he had moved Zappos from San Francisco partly because it had been identified as a good place to open a company call center.

“Tony taught everyone that building a great community is the secret to a great customer experience,” Mr. Parr said.

As Zappos grew, Mr. Hsieh expounded on the need to stay focused on the customer, said Alexis Ohanian, co-founder of the website Reddit and founder of venture-capital fund Seven Seven Six.

“By recentering his business on the customer experience, Tony injected humanity back into an industry that had become purely transactional, in turn fostering a fiercely loyal customer base and defying the belief that companies could not balance customer service and their bottom line,” Mr. Ohanian said.

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Write to Ann-Marie Alcántara at [email protected]

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