Thursday, July 23, 2009

Zappos and the value of social

Zappos was bought by Amazon yesterday for $920m in Amazon stock. Not bad for a 10 year old company, and who thought that selling shoes online would actually work, let alone be such a goldmine. In fact I remember saying about 10 years ago - about the time of - that shoes were exactly the sorts of things that you wouldn't buy online.

Part of the success of Zappos is their non-advertising marketing model. They have claimed that on any given day approximately 75% of their orders come from repeat buyers, and they invest a lot in making sure that they are contactable whenever possible (24 hour call centre, with all staff having to start in the call centre).

One of the more salient ideas on how the business world is changing is that the brands that survive will be the ones whose customers tell the best stories (quote via Lynette Webb)

brands that win will be those whose consumers tell the best stories

Zappos fit into the world of social media so well because there are so many good stories for customers to tell - orders that arrive earlier than expected, free returns, and customer service reps who will even point you towards other vendors if Zappos don't stock the items themselves. Read this blog post by Stephen J Dubner, one of the authors of Freakonomics, which first made me aware of the phenomenon of Zappos. Add to this how well they've adopted tools like twitter, and even this lovely little map of goods bought from the site in real time - they've certainly used the online and social space very well.

One final story - after training, new staff get offered $2,000 in cash to leave the company. Management do this to ensure that people working there are not doing it for the money. Apparently 97% turn down the cash. Wonder how many other businesses could get away with that!

Want to see a good example of monetising social media? One word: Zappos.

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