Friday, May 23, 2008

Branding Your Employees By Paying Them To Leave

Thanks to Cindi, who occasionally blogs at UX Beyond, for sharing this incredibly inspirational article from Harvard Business Publishing. The item is about Zappos, which of course stands as one of the most remarkable brand building stories of the past decade.

Zappos has done many things right to build its business from $70 million five years ago to $1 billion today, and here is one of those: The company starts new employees on a four-week training period that immerses them in the company’s strategy, culture, and obsession with customers. After the first week, they make “The Offer”: “If you quit today, we will pay you for the amount of time you’ve worked, plus we will offer you a $1,000 bonus.” Zappos figures if you’re willing to take the company up on the offer, you obviously don’t have the sense of commitment they are seeking.

Here's another thing they do: Each year Zappos publishes a Culture Book and offers it for sale on their site. The 2007 edition is 324 pages long and includes hundreds of short essays written by employees and business partners explaining what makes the Zappos company culture unique and successful. It includes everything from anagrams ("Zealous Adventurous Positive People Offering Service") to haiku to these words from Tony Hsieh, Zappos CEO:

“To me, the Zappos culture embodies many different elements. It’s about always looking for ways to WOW everyone we come in contact with. It’s about building relationships where we treat each other like family. It’s about teamwork and having fun and not taking ourselves too seriously. It’s about growth, both personal and professional. It’s about achieving the impossible with fewer people. It’s about openness, taking risks, and not being afraid to make being afraid to make mistakes. But most of all, it’s about having faith that if we do the right thing, then in the long run we will succeed and build something great.”

Perhaps, if you're the jaded kind, you're thinking that Zappos buys all of this employee loyalty, but according to an article from, Hsieh readily admits that Zappos underpays. “In terms of salary, we are either at or below market. The higher the position, the more below market we are. At the VP level, you're probably making less than half of what you could be making somewhere else.”

Zappos does pay 100% of their medical and dental insurance and offers free lunches, snacks and drinks daily, but Hsieh insists his team is dedicated because of the company culture. “Co-workers will burst into song and dance at random intervals throughout the day,” writes human resources staffer Christa F. “Upon request, the CFO will groom your hair.”

(True story: Fifteen years ago I was working in a Human Resources department of an insurance company when, during one stressful week, I was speaking to peers about how the pace would soon improve. I broke into song, singing "Tomorrow" from Annie, which was the exact moment our conservative VP entered the room. I got a talking to about professional behavior, which was but one of the many tiny nails that went into the coffin of my insurance career. Even though I can't think of the last time I've engaged in spontaneous workplace musical theater, it's clear I am much better suited for the world of experiential marketing than for insurance.)

So, does all this work? Zappos is private so data is hard to come by, but it reportedly operated at break even while growing at a Compound Annual Growth Rate of over 70% over the past five years. And in 2006, it was reported that Zappos eked out its first profit — about 1%, according to Hsieh.

Marketers often speak of touchpoints, but it's easy to forget that the most frequent and important touchpoints are the many daily interactions consumers have with the people who comprise your organization. No advertising can overcome consistently poor service or product experience, so the importance of finding and keeping the right people--and then making sure they are the living embodiment of your brand--cannot be overemphasized.

Think of it this way: Given the opportunity to share up to 500 words for your organization's "Culture Book", what would your employees say? Have you so thoroughly communicated your culture and brand to each and every employee that they understand it, internalize it, make it their own, and could find hundreds of interesting (but related) ways to share it with others? If not, how can they possibly represent it when communicating with consumers? And, in the age of social media, what are they saying about your culture and brand in their private communications, blogs, and Twitters?

1 comment:

joshjs said...

If you're going to sing in the office, do let me know.