SXSW: Zappos.com - Talking about shoes, saving newspapers?
AUSTIN - I am not much of a shoes guy. I have shoes. I like certain pairs more than others, but they're more of a utility than a fashion accessory.
So when someone mentions Zappos.com, my brain starts to nod off. This could have meant double jeopardy Saturday afternoon at SXSW Interactive. After traveling for more than six hours and jumping time zones, the first thing I attended was the keynote talk from Zapppos.com CEO Tony Hsieh.
But something odd happened. As Stephen Colbert might say, Hsieh "just blew my mind."

Hsieh didn't come to SXSW Interactive to talk about shoes or even the selling of shoes. Instead he decided to talk about customer service and how it wins the day for companies. If you're like me, when you hear the phrase "customer service" you get visions of a dingy desk at back of a department store staffed by a kid who's filing in for someone on their break.
Hsieh sees it different - 75 percent of orders to Zappos.com on an average day are from repeat customers. Why? Instead of pumping money into marketing, you put it into customer service.
On top of offering freebies on the site (shipping and surprise upgrades), Zappos encourages customers to call about any aspect of their order. The company also goes to serious lengths to have the right people on staff # even offering $2,000 to new employees who want to quit. You keep the people who want to be there and invested in making the business work.
I know what you're thinking - "Isn't that expensive, the answer is yes, it's extremely expensive," Hsieh said.
But if a good experience with Zappos means happy (repeat) customers, then most likely they'll tell their friends. And good word of mouth can be better than the most expensive ad campaign.
So why did this catch me by surprise and grab me by the collar? Because my brain went right back to the survival of journalism.
But the difference between a company like Zappos and your average newspaper is (aside, give or take several million dollars in profits) that we don't look at readers the way businesses look at customers.
Newspapers are shedding readers like a boxer losing blood in a prize fight. And we're looking just as beaten and bruised.
We all know the horrific details # the collective impact of news aggregators, blogs, and a emerging (and tricky) mobile market. And then there's the advertising. (More blood loss there.)
Maybe it's time we changed our thinking
Where a company like Zappos sees its return on investment is in repeat business # the woman who can't stop buying shoes because she gets what she wants and when she wants it.
Newspapers have (or maybe had) repeat business too # they're called readers. It's not just the subscribers, but the people who pick up a newspaper or check a newspaper's website because they trust it and have a good relationship with it.
Maybe we take them for granted. We expect people will want to read the news # because they have to, right?
Not from us. And certainly not the way we deliver it.
Pointing out just how devastating customer service can be on a company, Hsieh pointed to the airline industry. How many of us have horror stories from flying or have been left with a bad experience at the airport?
That's the type of bad marketing you don't pay for, and can't pay enough to get rid of.
"Companies are becoming more transparent whether they choose to or not," Hsieh said.
Newspapers suffer from that every day. If it's not adapting to changes fast enough, spending too much time lamenting their demise, or failing to explore new ways to reach or create communities through social media.
Hsieh said Zappos is a company that he hopes will be more than just shoes.
Better customer service with the people you want to count on you (either for shoes or newspapers) can grow profits but also build the type of relationships that help companies thrive.
That's a blueprint for newspapers. Maybe it's not a financial plan, but it's a possible path to survival.
You can head over to SXSW Interactive's web site to see a graphic recording of Hsieh talk.
Posted by at 12:37 PM
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