When Common Sense is a Startling Revelation

March 14, 2009

This afternoon I took in Tony Hsieh’s keynote at the South by Southwest Interactive festival. The room was packed and expectations were high. Marketing and social media heavy hitters – CEOs, CMOs, and execs from other companies – faithfully tweeted each bit of wisdom Tony passed out. Not bad for a guy who started selling pizza and, these days, sells shoes. (Maybe you’ve heard of Zappos.com).

In all seriousness it was a great speech and one that I expect will send out ripples of change for a long time. Tony came across as genuine and likeable – and, more importantly, both wicked smart and strongly principled. I took away three very wise points:

  • Company culture and brand are flip sides of the same thing. They’re so serious about this they’ll pay new employees to quit – if a $1,000 bonus is motivation to quit, you’re probably not committed enough to be part of that great culture
  • Every customer interaction is a marketing opportunity. Don’t try to reduce cost by outsourcing telephone support; recognize that one-to-one interaction as the priceless marketing (NOT upselling) opportunity to delight a customer that it is. A simple corollary to this: a dollar spent delighting a customer is FAR more effective than a dollar spent promising to delight a customer
  • Happiness matters. Happy employees create happy customers. “People may not remember what you said or did, but they will always remember how you made them feel.”

He left me with a lot to think about. If you were there, you probably had the same reaction – if you weren’t, email tony@zappos.com and he’ll send you a copy of the presentation.

What’s happened to our business climate that any of this comes across as a startling revelation? Zappos has used some ingenious approaches. But the principles are things we should already know. They sound like wisdom from a small-town merchant who recognizes that he’ll be dealing with the same town for a lifetime, instead a a P.T. Barnum ready to pull up the stakes and move on to the next town full of suckers.

We know these things. Then we go on accepting a goal of reducing average call time by 10%.  Instead of surprising customers with free fast shipping, we surprise them with hidden shipping charges. Years ago, the person inside Dell who championed going down to 90-day phone support as the base level with any other level of support an upsell was treated as a hero. (This is not speculation, I was there).

None of this is intended to take anything away from Tony’s speech – it was what we needed to hear. But as you think about some of the takeways, ask yourself: didn’t we already know these principles? And why aren’t our businesses built to practice them? Do we lack knowledge of the right thing to do? Or do we simply lack the courage and empowerment to do the right thing?

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10 Responses to “When Common Sense is a Startling Revelation”

  1. Tim Walker Says:

    It’s a lack of courage and empowerment all the way, Russ. Just like most people *know* what they could/should do to get around their hangups (eat right, save money, etc.), most companies *know* what needs fixing (glitchy product, bad service, low motivation, etc.).

    The problem is admitting it.

    Good post.

  2. Bill Fitzpatrick Says:

    Russ,

    It sounds like a great speech, thanks for this recap.

    Personally I think small businesses often lack the ingenuity you speak of, and larger businesses lack the courage to implement something new in the face of shareholders, investors or even the status quo.

    So, if it doesn’t get baked in, it may not ever get adopted, unless we can save a brazillion dollars and customers won’t complain TOO noticably.

  3. rsomers Says:

    Bill, it’s good to see you here and thanks for commenting! You’re on to something IMHO. Seems like a small business without the ingenuity to innovate around these things early on is unlikely to find the courage to do so as it grows. Thinking aloud, that means it’s not a task that can be put off.

    Tim, thanks for your comment as well! Yes, I think it’s a courage thing and sometimes a managing-to-the-quarter thing. I keep coming back to that post of yours on why simple decisions can be so hard.

  4. Elaine W Krause Says:

    Great write up — Tony’s presentation was the highlight of SXSWi for me. Even though we know most of those things (on some level — or pay lip service to them), it does help to see a big company articulate a plan and succeed at it.

    In these days particularly, following the cynical choices of Enron & Arthur Anderson up through the latest AIG news this week, this is a paradigm we all need to embrace in our own work and demand of those who seek our business.

  5. rsomers Says:

    Thanks Elaine – I think the context you provided sums up perfectly why it felt so refreshing. It’s nice to not feel naive for believing that a business can do well by doing the right thing.

  6. Elaine W Krause Says:

    Actually, Tony’s talk was a jumpstart for me. If so few people are doing business that way, maybe it’s because we’ve all taken the easier path too many times. What do we, personally, want to stand and be remembered for?

    In light of Natasha Richardson story: none of us knows how many days are given us to do good work and make a difference.

  7. Tim Walker Says:

    Elaine — Your last comment suggests something else, too: if so few people are doing business in this common-sense, value-the-customer way, then showing even a *modicum* of good performance in that area can become a real differentiator.

  8. Aaron Smith Says:

    Thanks for the condensed version Russ. I’m emailing Tony for the presentation right now.

  9. rsomers Says:

    You’re welcome, Aaron – hope it’s useful. Let me know when you get your blog up & running, I’d love to check it out.


  10. […] When Common Sense is a Startling Revelation, by Russ Somers, Austin, on the Egghead Marketing blog […]


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