Living Zappos Culture Through Social Media

Living the culture

© Scenario Consulting Private Limited 1

Zappos

August 26, 2012 © Scenario Consulting Private Limited 2

Summary
Success of Zappos depends on two elements – Service & culture
• Belief – their company culture is unique and it offers them a competitive advantage

They use social media to project their unique culture to the world
• Work hard at building emotional connections in the otherwise cold online experience

Honest & transparent approach makes them real

An online retailer, but do not use online to hard sell
• Email & telephone – primary ways of engaging customers for sales
• Social media – managing culture, engaging & measuring reactions
CEO sets the tone
• Tony Hsieh uses social media to communicate his passions
• Honest & Transparent
Measures of social media success
• Does not measure ROI in terms of revenue or savings
• Measures on parameters of service and culture


Who is Zappos?
 Business – Online retailing
 Founded – June 1, 1999
 Main product – Shoes
 Ambition – To build a collection of businesses
“powered by customer service.”
 2009
 listed as one of Fortune magazine's top 25
companies to work for
 Acquired by Amazon for over $1.2 billion


10 core values of Zappos

1) Deliver WOW Through Service
2) Embrace and Drive Change
3) Create Fun and A Little Weirdness
4) Be Adventurous, Creative, and Open-Minded
5) Pursue Growth and Learning
6) Build Open and Honest Relationships With Communication
7) Build a Positive Team and Family Spirit
8) Do More With Less
9) Be Passionate and Determined
10) Be Humble

Invited every Zappos employee to participate in defining values. Zappos uses social media to live these
values.

CEO Tony Hsieh leads from the front

 Digitally wired from top
 CEO Tony Hsieh has
1,850,862 followers on
Twitter
 Believes that happy
customers help deliver
great customer service
 Fun & exceptional customer
service ingrained in
corporate culture
 Consciously built a
personality for the company
that is friendly, helpful,
funny & trustworthy


Tony Hsieh talks about how they build brand Zappos using the Happiness mantra.


Twitter - Building emotional connections &
relationships
 Most Zappos employees (500
out of 1500) have an active
account on Twitter, and the
Zappos site has a page that
aggregates all the streams
 Aggregates not just Zappos
related conversations but all
conversations by the
employees on Twitter
 Built initially to help
employees get a perspective on
each other outside of office
 Now a way for customers to get
insight into Zappos personality
& culture
Talking to Zappos is like talking to a friend that happens to sell shoes

Zappos.tv – Making every employee a micro star
 Five person AV team
 Dedicated full time to
conceptualizing, blogging,
shooting & editing what goes on
at Zappos, at work and play
 Cross between comedy
improvisation sketch crew and
news team
 Gets staff to talk extempore and
does editing later
 Type of content
 Planned – head-shaving day
 Spontaneous – „what super
power would you like to have‟
 Latest developments – “bunk”
desks

Zappos Blog
 Mix of work and play
 CEO & COO Blog
− Shares latest updates – update on projects, new
locations, business deals
− Periodically posts internal emails
– Email about having to lay off 8% of
employees in 2008
– Implications of Amazon‟s buying Zappos
 Zappos Family
− Zapponian Spotlight – fun interview with
employees
− Latest events
− Team activities
 Inside Zappos
− Action inside the Zappos office
 More than shoes
− Latest style, trends, tips
 Technology
− Latest enhancements on Zappos site
− Technology enhancements and partnerships

How Zappos works hard at building culture

 $2,000 to quit work
 The company regularly offers workers $2,000 to quit, "to make sure
that employees are here for more than just a paycheck”
 Match name with photo of the colleague
 When Zappos employees log onto their computers, they don't just
enter a login and password. They also have to try to match a name
with a photo of a randomly selected colleague. The company keeps a
record of everyone's score
 Ask Anything newsletter
 Employees are invited to post questions for the monthly newsletter
 Zappos culture book
 Describes the ethos of the company
 Features 100- to 500-word essays by current employees


How do they measure success?

 Zappos measures social media on the parameters of culture &
service
 They don’t calculate its ROI on sales; they don’t consider it a
traditional marketing channel


The journey from a shaky start to, process
integration globally


How it all started

 Early 2005
“DELL SUCKS.DELL LIES. Put
that in your Google and
smoke it,”
- Jeff Jarvis on his blog,
BuzzMachine
 Core issue – bad customer
service

Company policy to not respond meant that Dell remained silent despite bad online press and
negative blogs. The negative outage hurt their stock price and reputation. Michael Dell returned
to run the company after 3 years.

Finally, Dell responded

Launched Direct2Dell blog to respond to and engage customers.

Source: Embracing & Sustaining Your Community Ecosystem by Dell Social Media


Today

Ranked #1 most social brand in ranking of top 100 brands in a study by Headstream in 2011


Source: Embracing & Sustaining Your Community Ecosystem by Dell Social Media


Social Media Use Cases as defined by Dell


Framework for mapping presence

Source: Embracing & sustaining your community ecosystem by Dell Inc


Mapping Dell’s presence
Facebook
Blogs
Corporate
Support Blog
Forums (Direct2Dell)
External
Communities
(Networking)
Twitter LinkedIn
Dell.com

Groups

YouTube

Employee
• Dell Software News Storm
• Dell Shares IdeaStorm
Blogs • Education Blog
• Enterprise External
• Healthcare
Studio
Communities
Dell
(Content)
Flickr Slideshare


Hosted Communities
Support Mastery & Use Affinity Ideation

• Dell - Support • Groups • Direct2Dell • IdeaStorm
Forums • Dell Blogs • Facebook for • EmployeeStorm
• Twitter - • Studio Dell Small Business
@DellCares
• Facebook
Support

Key Programs for Community
-Listening
- Management & Moderation
- Advocacy
- Reputation Management


Dell’s framework – Listen, Engage, Act


Community – Customer-ideation

Dell Ideastorm
 Launched in Feb 2007
 Objective
 To encourage ideas,
feedback, input and
dialog from customers
 Results
 15,000 ideas generated
by the community
 750,000 promotion of
ideas
 84,000 comments
 400 ideas implemented
by Dell


Learnings from IdeaStorm for Dell
 Spike of ideas occurred in the first few days
 Dell received 2,000 ideas in first 2 weeks
 Community expected immediate response/engagement
 Beginning – their updates were sporadic
 Today – they have a dedicated blog with updates every 2 weeks
 Expectations of two key stakeholders & addressing them
 Customers
− Positive experience – timely feedback
− Action taken on ideas – clear status updates
− Recognition – thank you mechanisms
 Business partners
− Positive experience – timely/accurate reporting
− Executive support – alignment with strategy
− Defined process – communication support
Source: IdeaStorm Overview by Dell Inc


Challenges faced by Dell & proposed solutions
 Type of entries recieved
 Understanding the ideas posted Create a User Toolkit –
 Poorly formulated ideas Do’s and Don’ts
 Ambiguity about scope of its proposed
Tools for developing

Solutions
application,
 Volume of entries consensus – Vote up and
 Determining the best ideas down, Comments
 Voting mechanism
 Duplicate ideas splintered votes Respond Quickly, Ask
 Excessive influence of unrepresentative Questions
minority
 Bottlenecks in engagement If You Let Them Vote,
 Transparency vs Business confidentiality
Make It Count
 Presenting ideas “accurately” on the community
 Limited resources and confidentiality concern
hindered engagement Present Your Progress
Clearly and Openly to
the Community

Ideas breakdown

 Breakdown of ideas
received
 12% unusable – no
action needed
 4% innovative – possible
game changing ideas
 80% improvements
− Incremental ideas for
next gen products &
improvements for
existing products &
services

Source: IdeaStorm Overview by Dell Inc


Promotions

 Integration with social networks as Facebook
 Interacting with people in their own environment
 Encouraging friends to participate in ideas


Similarly, ideation community for employees

 Launched in June 2007
 Objective
 Encourage ideas,
feedback, input and
dialogue from
employees
 Results
 4,800 ideas generated
 250,000 promotions of
ideas
 22,000 comments
 150 ideas implemented
by Dell


Key Learning – Building Advocates

 1% advocates will drive 90% content & engagement



Dell on Twitter

2007 2010
 Exploratory  Formalised

Source: The Evolution of Dell on Twitter by Dell Inc


Dell on Facebook

Dell has several pages on Facebook spanning several geographies and business functions. Use it to
lend support to the community and build affinity.

Internal - Embedding Social Media into fabric of the
company

Internal Social Training &
Councils Communication Listening
Media Events

Blogs

SMaC Council SMaC university

Chatter
Social Media
Weekly Smac
Command
Digest
Centre
EmployeeStorm
Community
SMaC Talk
Leadership
Unconferences
Council
Sharepoint


Dell’s journey on Social Listening

Learning – With 4,000-5,000 online conversations everyday, there was need to scale up beyond
centralised social media efforts

Launch of Social Media Command Centre in
December 2010

Role – Support listeners and responders across Dell. Contain viral issues, coordinate on-boarding, maintain
standards, share best practices

Training & Events – SMaC University
 Established Social Media
& Community team
(SMaC) in 2010
 Governance
 Setting infrastructure
 Training
 SMaC University
 Over 10 training
modules
 Community, Facebook,
Twitter
 Outcome
 Certified: 2357
 5000 unique members
trained by end of year

Training & Events – SMaC Talk Unconferences

 Established Social Media
& Community team
(SMaC) established in
2010
 Governance
 Setting infrastructure
 Training
 Certified: 2357
 5000 unique members
trained by end of year


Impact of Social Media on Dell’s customer lifecycle

Source: Paving the way to social business by Dell Inc


Dell’s thoughts on ROI



Source: Paving the way to social business by Dell Inc


Metrics for tracking performance
 Business Value (examples)
 Brand: Net promoter score, sentiment, satisfaction, advocacy
 Support: Questions, answers, time to answer, % answered by you,
views of answered content
 Content: Content created, views of content, comments
 Web Traffic: Pageviews, uniques, referrers, domains
 Innovation: ideas
 Community Health
 Velocity of Change: Registrations, content creation, content
consumption
 Population Segmentation: 90/9/1
 Creators: posts, answers, comments
 Watchers: views, page depth, time on site, bounce rate Global
Marketing


Strengthening Corporate Reputation using Social
Media


Major SM interventions; 3 key segments

Enterprise Collaboration Corporate Reputation Consumer Marketing Community

SupportCentral
GE Reports Ecomagination Ecomagination Challenge
• Internal wikis
• Blogs

GE Expert network Healthymagination

GE Show


#1 Enterprise Collaboration – A Leader


Enterprise Collaboration at GE

 1999, built an internal network called SupportCentral
 which hosts
− 100,000 wikis
− 30 million documents
− 40,000 blogs
 Employee usage
− 25 million web hits everyday
− 5 million page views
− 500,000 downloads everyday


#2 Corporate Reputation – had more than a few
glitches


Key challenges

 Early 2000
 Strongly associated with its lighting and appliance products which
formed only a small percentage of the company business
 Stakeholders were unaware of the diversified portfolio at GE
− Understood in parts but not as a complete whole
 Late 2000
 Negative stories by mainstream media on the future of the company
− Financial difficulties in 2008-09 started casting aspersion on the future
outlook

Repositioned from „We bring good things to life‟ to „Imagination at work‟ in January 2003.


In 2008-09 front page stories in national business publications questioning viability of the company. Profits at
GE Capital had dropped by 80% in Q2


Gary Sheffer, GE‟s head of corporate communications realized they needed to communicate their story better.


Solution?


GE Reports

“This is a tough
environment, a lot of
misinformation in the
market place. This is just a
fast and simple way to
punch through it and to
make sure that you tell
your story in a simple and
engaging way.”

- Gary Sheffer on launch
of GE Reports

Widely heralded as a new form of communicating with the investors on the Wall Street.


GE Reports – Current Scenario

 Format
 Is an online blog that gives
viewers an inside glimpse at
personalities, breakthroughs
and technology
 serves as a news channel blog
 Audience
 Mainstream media
 Bloggers - news and financial
sites/blogs
 Investors
 Employees – current &
potential
 Tech & Science enthusiasts


GE Reports – What works
 Content configuration
 Breakthroughs & science
 Applied technology
 People behind innovation
 Big and small stories
− Steady stream of interesting
news
− Showcases a diversified
portfolio
 Customised consumption
 Content can be accessed basis
reader‟s preferred channel
 Distinct personality
 Passion for cool technology
 Unearthing lost stories
 Making big stories accessible
 Humor occasionally


Showcasing GE


Edison’s Desk launched in 2005

Showcasing the best of R&D work led by the Global Research Centre. Giving promising PhD candidates a
view into work happening at GE labs


GE Show

Showcasing the GE product portfolio in an informal, friendly and conversational tone. Users can share
feedback in the comments section.

Aggregating the expert network

Over 40 experts across 8 businesses are showcased as part of the expert network on Innovation.

#3 Consumer marketing


GE Healthymagination campaign with YouTube
influencers in 2010
Activity - Reached out to six YouTube stars to make videos about
healthy living as part of its Healthymagination programme


GE Healthymagination campaign with YouTube
influencers
 Outcome
 Combined the clips received over 12 million views
 Value
 Delivered corporate message in an authentic voice that‟s
more powerful than traditional advertising
 Leveraged their built-in distribution network
− Message percolated other networks as Facebook, Twitter via
devoted subscribers
 Helped reach a younger audience
 When traditional advertising stopped, this campaign lived and
continued to grow

Replicated the same programme for GE Ecomagination with 15 YouTube stars. Brief – challenge people to
lead a greener life.

“Get Fit” campaign by GE Healthcare on Twitter

 Global competition
 Encouraging people to “Get Fit”
and join the fight against cancer
 Share their healthy lifestyle
choices on Twitter
 Each country to have its own
hash tag. E.g. #GetFit_IND
 $20,000 donation from GE
healthcare to be given to Red
Cross in the winning country
 Over 700 participants from 55
countries generated 5,500
GetFit tweets
Innovative campaign at a global scale but did the different hashtag for each country approach really work?

#4 Community


Ecomagination Challenge
 Invited businesses, entrepreneurs, innovators and students from around the world to join
the $200 million challenge and share solutions for world's energy problems
 Tied up with 4 well-known venture capital firms to fund the winning ideas
 3 categories
 Create - Renewable Energy
 Connect - Grid Efficiency
 Use - EcoHomes/EcoBuildings
 Selected winners offered opportunity to develop commercial relationship with GE
 Investment, Strategy, Development, Distribution and Growth
 Selection
 Public vote but final decision to be made by the jury
 Cash award of $50,000 for entry with most user-submitted votes
 Participation
 70,000 visits
 800 ideas submitted
 10,000 comments
 1,500 established companies participated -- 25 percent of which already generate at least
$2 million in annual revenue

Unlike Dell Ideastorm, community involved in sharing ideas. Selection done by the experts.

Why chose the vicious cycle, when you can chose the
virtuous one


http://twitter.com/saynotoairtel


http://saynotoairtel.com


The importance of Har Friend Zaroori Hota Hai


The lack of story telling opportunities


The cost of “faking it”


Pantene fakes an interview


Pantene published questions, NOT, coined by Naina


Twitter and blogs abuzz with posts


Annexure


Framework for Social Business objectives & KPIs
Business Objective Key Performance Indicators
Foster Dialog Share of Voice
Audience Engagement
Conversation Reach
Promote Advocacy Active Advocates
Advocate Influence
Advocacy Impact
Facilitate Support Resolution Rate
Resolution Time
Satisfaction Score
Spur Innovation Topic Trends
Sentiment Ratio
Idea Impact
Source: Altimeter Group and Web Analytics Demystified


Fostering Dialogue – measuring


Promoting Advocacy


Facilitating Support


Spurring Innovation


Measuring customer value in social age
 Traditional scenario  New-age scenario
Lifetime value of the customer Lifetime social influence an
(LVC) metric – a financial activity of the customer
measure - Level of influence in context of
Products &services bought by our products, services,
Customer X – cost of servicing competitors or overall industry
Customer X = value added by - Participation in customer
the customer X on the company support communities,
bottom line knowledge shared to resolve
tier one issues (lowering service
Those who spend more = A-list costs)
customers

Role of social influence and activity on customer valuation

Thank you!


Living Zappos Culture Through Social Media

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Editor's Notes