Contact: Tony Hsieh, CEO
Location: Las Vegas, Nevada
Industry: Retail, e-commerce
Annual revenue: Confidential
Number of employees: 7000
The call these days for let-it-all-hang-out social media initiatives from the top down is one of the toughest challenges to tackle if you're the CEO of a leading online retail company.
What are the best ways to connect and communicate while growing and fostering a company, and should a CEO communicate directly via social media tools?
While others are still hashing out whether their CEO should be Twittering, blogging, or Plurking, Tony Hsieh, CEO of Zappos.com. has been using Twitter for over a year with authenticity and real-time tweets consisting of responses to fellow Twitterers, announcements of company news and even replies to a few customer complaints.
Moreover, Hsieh's company now has nearly 450 employees on Twitter—more than 6% of his employee base.
With his constant twittering, Hsieh continues to garner accolades from the social media universe, as well as from twittering customers who have provided a resounding "twittering thumbs up" for Zappos from around the world.
For Tony Hsieh, CEO of Zappos.com, competing in the ever-expanding online retail arena is a a daily challenge. So it's not a surprise that as CEO Hsieh looks for ways to expand and to differentiate his company from the pack of competitors, including JC Penney, Shoebuy.com, and OnlineShoes.com, in what is the $3 billion online footwear industry.
Zappos has been recognized by leading publications, including Inc., Business 2.0, Fast Company, among others, for doing an extraordinary job of using traditional marketing methods to connect to new customers, including a TV commercial featuring a song by Jack Johnson and Donavon Frankenreiter, billboards, and magazine ads.
However, "Most of our paid advertising dollars are spent online (search engines, affiliate programs, etc.), Hsieh said.
"But we actually put most of the money that we would have spent on paid advertising into the customer experience, such as surprise overnight shipping upgrades, 24/7 customer service, 24/7 warehouse operations, free shipping both ways, 365-day return policy, etc."
Hsieh explained: "All of those things are very expensive, but we decided that we wanted our primary marketing strategy to be based on word-of-mouth and repeat customers."
Though the company in 1999 (at its start) had almost no sales, Hsieh noted, "This year we are on track to do a little over $1 billion in gross merchandise sales.
"The primary driver of that growth has been from repeat customers and word-of-mouth. Our philosophy is to invest in the customer experience, and let our customers do our marketing for us through word-of-mouth."
The challenge for Hsieh is to help keep the momentum going by authentically reaching out to customers, further expanding word-of-mouth reach. He contends that is in part achieved by encouraging an open and communicative company culture.
"Our number-one priority as a company is company culture. We believe that if we get the culture right, most of the other stuff (such as great customer service) will happen on its own."
Initially, for Hsieh, using Twitter as one more way to break out of the shoe pack was completely unintentional (unintended results—part of the beauty of social media).
Hsieh is quick to note that his view of social media had more to do with boosting communication than strategic marketing, "We didn't really view social media as a marketing strategy. It's simply another way of connecting more deeply with our existing customers. It's like our 1-800 number, which we have at the top of every single page of our Web site. We don't view that as a marketing strategy, it's just another way of connecting with our customers.
"I've been personally using Twitter for over a year, but for the first year it was just myself and 20-30 of my close friends. About a month or so ago (April 2008), I decided to start encouraging all of our employees to use it as a way of enhancing our company culture."
Hsieh initially hoped that his employees' twittering would enable them to share more insights with one another and feel more connected to one another and the company culture in general. Hsieh's few encouraging tweets here and there over a year's time resulted in hundreds of Zappos employees' Twittering.
"Create fun and a little weirdness" is one of Zappos's core values, and in that light Hsieh's encouragement of employees to Twitter was also intended to provide employees another way to be themselves:
"It's really just a fun way of saying that we encourage employees to express their individuality at the office and when interacting with our customers. For example, we don't have scripts like most call centers do. Instead, we want our employees to just be themselves and decide on their own how they want to go above and beyond for our customers. In terms of Twitter, it's the same thing... I will occasionally Twitter about things I do that might seem a little weird, like having Slim Jims and Red Bull for breakfast."
Here are some of Hsieh's recent Tweets:
- Giving tour of Zappos offices to Eben Pagan. 1 day ago from txt
- At quarterly merchandising awards @ Blue Martini. Sad I missed thumb wrestling competition & baking contest today @ Zappos, was in meetings 04:19 PM July 10, 2008 from txt
- "Tribal Leadership" authors touring the Zappos offices right now. Will be meeting w/ them for a few hours. Great book, highly recommended! 09:56 AM July 10, 2008 from web
- At Ruth's Chris with @zappos_fred talkin' business. Haven't been here for awhile but it's one of my favorite steakhouses. 06:53 PM July 09, 2008 from txt
- http://twitpic.com/3esr - Zappos employee art show in our lunch room. Each piece of art represents a Zappos core value. 03:21 PM July 09, 2008 from TwitPic
- Watched dedication of "Spoken Word" event (poetry readings by Zappos employees), got preview of Zappos art show (art by employees)! 12:38 PM July 09, 2008 from web
With Hsieh's encouragement, in about two months the company has 438 employees who are using Twitter.
Hsieh's own tweets and active participation on Twitter are also generating quite a bit of blogosphere buzz (Hsieh also blogs), including these randomly selected examples:
And, in May, Hsieh was able to hastily pull together a Twitter party in San Francisco which also served as an informal recruiting event. The party even had a surprise visit from a well-known rapper who noticed the Twitter shout out to party.
"There were about 20 Zappos employees that were in SF anyway... Some were there for a conference, while others were there for meetings. So we decided to hold a last-minute Twitter party as a recruiting event. People who showed up could talk to Zappos employees, learn more about our company culture, and hopefully some of them would be interested enough to send us their