Fancy Footwork

On June 7, a new book by Tony Hsieh titled Delivering Happiness: A Path to Profits, Passion, and Purpose hit the stores with a retail price of $24. There’s no readily available data on how many readers plunked down that much, but what we do know is that 1,678 readers did not. Those people were subscribers of the crowdsourced discount site Groupon, which carried the book as a discount special in the middle of May — 10 bucks, including shipping.

Given the state of book publishing these days, a markdown that steep (pre-launch, no less) might not seem like the swiftest thing to do from a bottom-line perspective. Never mind that selected bloggers got the book for absolutely nothing. But you’ll have a tough time finding anyone in the business world who thinks Tony Hsieh (the surname is pronounced “Shay”) doesn’t know what he’s doing. For him, deep discounting was a means to an end — in this case, getting the book in front of as many eyeballs as possible. And why not? Since the book told the story of — the shoe and apparel Web site for which Hsieh serves as CEO — it made a lot of sense to make sure American consumers had a copy. At last count, 3 million of them did.

As it turns out, this kind of gambit is nothing new for Hsieh, 36, who has no formal marketing training and has always been a bit of a maverick, an entrepreneur willing to take chances that on the surface might seem illogical.

“Tony is not deterred by what people think — or conventional wisdom,” says Zappos CFO Alfred Lin. “Most businesspeople think of business decisions as a trade-off; you have to try these two things and not the other two. Tony will try and figure out how to do all four.”

Much of the time, he will figure it out, too. All of a decade old, Zappos isn’t just the No. 1 online shoe retailer; it’s also set its sights on the apparel category, offering clothing, handbags and accessories for men, women and children. But the biggest news came in July of last year, when acquired Zappos for just over $1.2 billion (that’s $200 million more than Zappos moved in gross sales in 2009) in a stock-for-stock swap.

That Zappos proved so tempting to e-tailing’s 800-lb. gorilla speaks not only to the power of the brand loyalty that Hsieh has created, but to the marketing methods that he used to create it. Under Hsieh’s leadership, every Zappos employee is like a little marketing department. “Our brand and our culture are two sides of the same coin,” Hsieh says. “The brand is just a lagging indicator of the culture.”

Yes, we know what you’re thinking. Every executive talks about culture and empowerment, and refers to employees as “brand ambassadors.” But in Zappos’ case, it’s really no joke. At Zappos, customer service is like a pair of shoelaces — threading straight through the company culture and holding it together at the same time.

While other retailers outsource their customer-service lines to call centers on a distant continent, Zappos’ number connects directly to the company’s HQ just south of Las Vegas. A live rep picks up almost immediately (two rings when we tried), and you can even hit 5 to hear employees tell you a joke of the day.

Hsieh insists that associates be helpful with anything that customers might call about — and he means it. That person who called in search of a pizza joint in Santa Monica that was open at midnight? They found one. And in case you’ve caught those TV spots (via Mullen) with the puppet customers phoning the puppet service reps, those are actual Zappos employees doing the voices. In fact, apart from a few quick camera cuts, the commercials don’t even feature shoes. No oversight, Hsieh explains. Instead, “We wanted to show how our reps are ready to bend over backwards for our customers,” he says.

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