Archives - April 2009


SXSWi – Tony Hsieh Zappos Keynote

[ amazing illustrative summary courtesy of sunni brown - click on the image to see the glorious full-size version courtesy of the guardian ]

This is probably the slowest SXSW writeup on the whole of t’interweb. It may even be SXSW10 by the time I get around to finishing writing up my notes. But small hindrances like pitch madness and hitting big project deadlines at work do have an annoying habit of getting in the way.

However, although this particular session has been particularly well documented by numerous attendees, it was so very well received, and the speaker is such a general rockstar, that I thought it was worth a brief writeup, in case any of you hadn’t already read about Tony Hsieh’s keynote.

Tony Hsieh is the CEO of Zappos. He’s one of those annoying visionaries who’s really bloody good at what they do – in 1998, 3 years out of college, he sold his online advertising business LinkExchange to Microsoft for $265m. Since 1999 he’s run Zappos. For us non US-ians, Zappos is an online retailer selling clothing and accessories. Zappos take a slightly different view of their business – they claim to be a “service company that happens to sell clothing, shoes, handbags, eyewear, watches (and eventually a bunch of other stuff)”.

Service underpins everything that Zappos do. “Powered by service” isn’t just a strapline – it’s their mantra. They’re utterly committed to wowing every single customer by providing the very best online shopping experience possible.

You can find out more about Zappos in the slide deck below (and indeed watch the whole keynote for yourself if you’re so inclined), but for me these were the key take-outs from the session:

 

Internal Values and Culture

Your brand and your internal values / company culture are one and the same thing. Should be Brand Building 101, surely? But how many organisations can honestly say that everyone within their business, from very bottom to very top, is a brand builder – that they live and breathe the brand and brand values? Zappos are so serious about ensuring that their employees embrace their brand values that they’ll offer new employees $2000 to quit (on the basis that if this is enough of a motivation for you to resign, you’re probably not really committed enough to be part of the Zappos team). The hiring process operates at two levels: one to verify potential employees’ fit for the job in question, and one for company culture fit. Performance reviews are 50% based on culture, 50% on performance – you can be fired even if you’re doing a great job, but you aren’t embracing the company culture. Employees all contribute to the annual Zappos CultureBook, where they share what they feel about Zappos culture and why they work there – which is then shared with all new employees.

At Naked we do a lot of work with clients on internal comms, because we believe that successful brands are built from the inside out. It might not be as sexy as a 60″ TV spot but the way an organisation, and the people within that organisation, behave communicates just as much about the brand – and arguably more – than what a brand says in its advertising. Most companies see brand communications falling squarely within the responsibility of the marketing department, and internal culture and operations as the domain of the HR department, and ne’er the twain shall meet. The most successful brands understand that what they do is more important than what they say, and recognise that internal culture plays a huge part in this.

 

Transparency

Very much related to the above, it’s no bloody good constructing a whole set of brand values that you want to portray to the outside world, if you’re not actually talking the talk internally. It’s especially heinous when organisations try to use marketing to whitewash over problems that seethe under the surface.

“Be real and you have nothing to fear”

Wouldn’t that be so much easier in the first place?

(Zappos’ commitment to transparency include: open dialogue via Twitter; Zappos blogs, “Ask Anything” newsletter – employees can ask anything & answers are published in a monthly newsletter; open tours of Zappos HQ; extranet for vendors; ZapposInsights.com)

 

Building Relationships

This doesn’t mean networking. Or building up thousands of followers on Twitter or fans on Facebook to enable you to push out messages to your waiting public. It means listening to your customers, potential customers, employees, business partners, and engaging in dialogue.

“Be INTERESTED rather than trying to be INTERESTING”

 

The sucker punch – and arguably for me the point that underpinned the whole keynote (and indeed the whole of Zappos business) – was seeing Hsieh enthuse about the value of delivering happiness:

Delivering Happiness

“People may not remember exactly what you did or what you said, but they will always remember how you made them feel.”

The usual metrics for business success are KPIs such as profit, revenue, sales, customer acquisition, ARPU, alongside softer brand metrics like brand affinity, preference, recommendation. You might find ‘customer delight’ up there, but it’s rare to see it take a seat at the table alongside core business targets.

Hsieh observed that there’s a hell of a lot of science behind many aspects of business: e.g. conversion, the psychology of buying, customer acquisition metrics, repeat customer behavior, etc. And posed the question – what if you spent just 10% of your time studying and learning the science of happiness?

If Zappos have made their customers happy (and indeed their employees, potential customers, business partners and so on), they’ve done their job. And this isn’t just fluffy brand bollocks, it’s translated into storming business success:

Over 10 million total purchasing customers
Over 4 million have purchased in the last 12 months

Customers come back…
On any given day, about 75% of purchases from returning customers
Repeat customers order >2.5x in the next 12 months

Customers come back, order more and order more often…
Repeat customers have higher average order size
$123.86 – first time customers in Q407
$156.27 – returning customer in Q407

#23 in Fortune’s 2009 “100 Best Companies To Work For”
#20 in Fast Company’s 2009 “50 Most Innovative Companies”

Impressive stuff, no? It’s a powerful demonstration of what Tara Hunt describes in her superb presentation Happiness as Your Business Model. As succintly summarised in this write-up, surely a dollar spent delighting a customer is FAR more effective than a dollar spent promising to delight a customer?

 

Zappos Keynote at SXSW09 – 14th Mar 09
View more presentations from zappos.

 

April 13, 2009 in Brands | Permalink | Leave a Comment

SXSWi – Plan B: Can an Ad Guy Bring Bike Sharing to America?


[ photo courtesy ]

The SXSWi write-up continues (albeit slowly, as the whole work thing and pitch mania is slowing the process somewhat!):

The panel was entitled ‘Plan B: Can an Ad Guy Bring Bike Sharing to America?’ but in his opening preamble Alex Bogusky said actually, his presentation was really about ‘the art of sticking your nose where it doesn’t belong’, and the bike sharing was just an example of what can happen when you do.

Others have posted their own write-ups of the panel here and here, and you can listen to the podcast of the panel here, so I shan’t double up by recounting a blow by blow account of what Bogusky said – but rather take a few of the points he raised as springboards for a few random thoughts and musings. Also a warning that the below has very little, if anything, to do with bike sharing. So I’d suggest reading/listening to the aforementioned accounts if you want to find out more about Bcycle. This is my take on a few of the points raised, and my own thoughts about some of what was – and notably wasn’t – said:

Sticking your nose where it doesn’t belong

Firstly, the art of sticking your nose where it doesn’t belong. That resonates hugely, as I’d say it’s one of the central principles that guides what we do at Naked. We don’t fit neatly into a box – so we’re invariably poking our noses into what other people would consider to be ‘none of our business’. And honestly, yes we do ruffle some (often quite a lot!) of feathers. But very often, we wouldn’t be doing our job if we weren’t. Frequently a client comes to us with a problem that they can’t crack, and more often than not, a major stumbling block is that the various internal stakeholders are doing things the way they’ve always done them – within their own internal silos, doing what’s expected of them without straying into anyone else’s territory. And the agencies are doing just the same. The marketing department have responsibility for briefing and managing the media, advertising, PR, digital, and other associated marcomms agencies. So the media agency gets their media budget and plans the media. The PR agency does their bit, the creative agency make the ads and so on. But the person in charge of customer service experience, or call centre management, or after-sales service, or in-store, or staff training, all sit off in separate departments and ne’er the twain shall meet.

So the often so-called integrated activity is at best matching luggage within the marketing communications, but invariably totally divorced from all the other ways the brand communicates. And yes, ‘comms’ is not just another word for ‘advertising’, the script at the call centre, the packaging, the way the after-sales service is dealt with – it all communicates something about the brand so it’s all comms. But very often no-one’s joining the dots. So when we come along to try and find creative communications solutions for tricky business problems, and we start diving into these areas, it’s frequently seen as us sticking our noses where they don’t belong. You deal with the marketing and we’ll deal with everything else thank you very much.

But unless you do stick your nose where it’s felt not to belong, the change that’s needed invariably doesn’t happen. And frankly if you’re content to just sit in your box without challenging the status quo, if the status quo isn’t working, you’re not doing your job.

Joint Ventures

The other area I found particularly interesting was really what Bogusky didn’t say. The whole Bcycle scheme was positioned very much as a labour of love, originating from a deep and enduring love of bikes, and the overwhelming desire to bring something like the Velib system to Denver, without the strings attached (the Parisian system is funded by JC Decaux as part of the contract for the out of home advertising throughout the city). Now, although I’m a cynical old crone, I don’t doubt any of this. The guy is clearly absolutely passionate about bringing bike-sharing to the US, and obviously driven by the desire to make this work.

But it’s not a purely personal endeavour. Bogusky himself used the words ‘joint venture’ when talking about the agency’s role in the scheme, and so while this may undoubtedly be driven at its heart by passion and desire for change vs profit, it’s also surely a useful dry run for CP+B to test the water for future joint ventures.

They obviously wouldn’t be the first to do so. The most exciting and innovative advertising agencies are looking to future proof themselves by exploring new models for generating revenues beyond simply churning out ads. Anomaly IP is hugely exciting. As is BBH’s ZAG. Or some of the latest stuff from Droga 5. And yes, not all of these have been / will be storming successes, but such is the nature of trying new things. Some stuff doesn’t work. But you learn and move on, and you’re in a better place to make stuff that does work. Certainly a much better place than those who’ve sat with their fingers in their ears, hoping they could carry on as before, clinging on to those ever dwindling TV margins.

So I took the opportunity in the Q&A to ask Bogusky whether he saw joint ventures playing a key role in the future of advertising agencies. And his answer was cagey to say the least. He essentially dodged the question by saying that he tried not to think more than 15 minutes ahead, and that video on the web was probably going to be huge so advertising agencies wouldn’t have to change a great deal.

Hmm. Needless to say I wasn’t the only person who found this answer somewhat evasive – as several people came up to me afterwards all saying something like ‘wow he totally dodged the ball on that one – I sure as hell don’t believe him for a second’. And so on.

I’d be hugely surprised if CP+B didn’t think that JVs were a potentially huge part of the ‘creative’ agency of the future. And honestly, if everything good you’ve ever done has been about sticking your nose where it doesn’t belong, instead of using your creativity to just advertise other brands, why wouldn’t you be looking to create brands – and to get a share of the pie?

April 5, 2009 in Communication | Permalink | 1 Comment