Tag Archives: zappos
Why creating new categories is so successful
Creating a new category. The Holy Grail of Innovation. The Holy Grail of entrepreneurs. It’s when you can create a new category that you command the skies. Think of the iPad. Is it a new category?
It is. But not because people think it is, but because Apple defined it as such. Experts characterized the iPad as a tablet, but customers did not. That’s all that matters.
Other examples of category creation exist. For example Gatorade created the sports drink category. Chrysler created the minivan. Toyota created the Prius. Each had a good amount of time before any competitor entered the space.
So why is it that you should embrace creating new categories? (more…)
‘Better’ is the more practical approach to innovation in general
It all starts with the question: How can I make this better?
Framing is important and when talking about innovation that usually means deciding between incremental and radical change. Yet for most businesses, they don’t want to hear about change. They want the world they exist in just the way it is, especially if they’ve had some level of success.
But which is the more practical approach? Better or different? (more…)
What business are you really in?
It’s not the most obvious one.
Do you think Zappos is in the online retail business? Not according to Tony Hsieh:
Because they’re in ‘the stories & memories business’ they operate differently than traditional retailers. In their eyes they don’t compete with Amazon, they compete with the Ritz Carlton.
If you frame yourself just like everyone else, you’ll copy everyone else. Look deeper and wider, change the frame. What business are you really in?
If you can’t answer this question, here are a few questions to help you know what business you’re really in:
- Why do your customers come to you?
- When do they buy — and for whom?
- Where are the biggest margins in your business?
- If your company vanished tomorrow, where would your customers go?
Again, what business are you really in?
Empathy drives experience innovation
Image via Wikipedia
Recently I was in Mexico to have lunch with a friend. I went to pick him up from from a meeting but had to wait a few minutes outside of his offices. As I was waiting for him I parked in front of a pharmacy and it dawned on me that in this particular area there where five pharmacies in about a half mile radius. These pharmacies all looked alike, they were not from the same brand and the only distinction was the color of their walls. I have no doubt they operate the same way. It got me thinking about how I could differentiate one from the others…
Experience innovation is a difference maker
Innovating an experience improves or reinvents the customer experience in the purchase or usage of a product or service. Companies such as Disney stand out as a prime example of what it means to innovate a customer experience. Apple is right there too with their Apple store. The reason both stand out is because they’ve created an alternate reality, says Scott Gould.
Another great example of a company that stands out is Umpqua. We all know what a traditional bank looks like, well Umpqua does the opposite:
Umpqua’s 15-year track record of growth has little to do with the products it markets, which are virtually identical to the products offered by other banks. What’s distinctive about Umpqua has to do with how it offers those products — its commitment to reimagining the experience of interacting with a bank. Davis puts is this way: “If you took a person, blindfolded them, sent them to a bank, and took the blindfold off, 99% percent of them would say, ‘I’m in some bank somewhere.’ We want our customers to say, ‘I’m in an Umpqua bank.’ We don’t want the experience of banking here to feel like banking anywhere else.”
That’s why Umpqua designs its branches to appeal to all five human senses.
What Umpqua understands it that to be and stay relevant, you have to be different in every sense of the word. Not just ‘be different’ as marketing ploy, but ‘do different’ and make a difference. In the video below, Fast Company Co-founder, Bill Taylor starts talking about Umpqua around the 9 minute mark to help clarify my point (watch the whole talk, it’s worth it):
See what I mean?
What Not to be
Slice Perfect is another fine example. They’re not your typical pizza place. Just like Umpqua they started by asking ‘what not to be’. The result is a different kind of pizza place that goes deeper than just looks. When searching for a sustainable competitive advantage, experiences are the hardest to copy. No experience is the same. How many have tried to copy Disney and failed? Starbucks?
The Killer App of Trust
Trust is an often overlooked competitive advantage. The Ritz Carlton knows this very well and have been creating trust with it customers for a long long time. They understand than innovation is human behavior delivers sustainable competitive advantage. This means that that by creating a level of trust between a companies employees and it’s customers, authentic value in the form of better service can be delivered. That’s not manufactured value, it’s real authentic. Zappos also understands that by empowering employees to develop their own customer relationship breakthroughs it makes the customer experience more authentic. The result is more trust with customers.
Experience innovation is also difficult to accomplish. Jeffrey Phillips of OVO Innovation says:
Customer experience innovation requires understanding what customers value in the “touch points” and interactions with your products, services and your firm, and placing the right investments on the most important and valuable touch points. Customer experience needs to consider each “channel” a customer may use to interact with your firm: retail locations, telephone, web, email, direct mail, advertising, etc. The total customer experience cuts across a number of vertical silos within many organizations, including sales, marketing, products and customer support and service.
Authenticity is the result of human innovation
If you’re familiar with the Experience Economy, then all of the above is nothing new. But if you’re not, in the video below Joseph Pine talks about how customers really want an authentic experience:
So how do you start thinking about innovating your own experience?
Remember the What Works Matrix? Here’s the time to use it. I’ve already given you some examples of companies that have distinct customer experiences, you can pick them apart for ideas. You can then use the ‘What Works’ Matrix to cherry pick your way to a solution.
@Futurescape wrote a great presentation of the 4 practical steps he took to create the Ayurvedic MediSpa Experience. You can use the customer experience cycle map to look at where a ‘shake up’ might come useful to deliver a better experience to the customer. Once you identify those critical touch points you have your challenge that needs to be addressed, it’s time to go to the What Works Matrix and start searching for alternatives that you can the bring over and implement yourself.
Though going through these steps will not result in instant results, it’s an exercise in opening your mind on how your customers experience you. Once your mind is open you’ll be a lot more concerned about your customer experience and start thinking up ideas in no time.
Remember: Empathy drives experience innovation
Break out of orbit!
Disney, Apple, Ritz Carlton, Starbucks all provide a distinct experience when compared with the ‘old way’ of doing things. If you sell commodities (like Starbucks) you can change how your customers purchase or use your products or services to create a distinct customer experience.
The point is to understand this. Ask yourself: What don’t you want to be? Do you want to be like your competitors?
Why ‘Delivering Happiness’ is a must-do
Making people happy is such a radical idea that it’s a sad thing to see when people are seeking help on how to be more decent to humans. That’s why delivering happiness is not business as usual. I’ve previously written about how Zappos has designed their business model around the idea of ‘delivering happiness’. Yet there’s still a lot of doubt around this ‘radical’ concept, see this Forbes article that asks: is employee happiness a corporate responsibility?
When I see questions such as these I cringe. Well of course it is! Seriously, why would anybody want to work at a place that makes them unhappy? I understand answering this questions is a lot more complicated because it deals with human nature, but it really doesn’t have to be. Grab a pen and paper, an important idea is coming up…
A recent Fast Company article backs this up. According to a study by David Rand of Harvard: People who spend time with happy people are more likely to become happy themselves.
Think about that for a second. Is that something too complex to understand? Do we really need this type of research to understand something so human? No. We don’t really need this type of research to know that hanging out with happy people will makes us more happy. Or that making unhappy people happy makes us happier. It’s common sense!
And that’s not all. Even more telling is that sadness is twice as infectious as happiness. No surprise here either, as an unhappy customer is more likely to tell five people how much your product or services sucks as opposed to telling just one. And by the way, this also includes your employees. Their part of the equation too.
With so much at stake, why can’t we get our heads around that happiness is actually simple?
Here’s the problem: Organizations have a lot of ‘business sense’ but not a lot of ‘common sense’.
Simply understanding that happiness and sadness are contagious should be enough for any organization to treat their people and their customers with decency. Would you rather be know for spreading sadness than happiness? Didn’t think so!
The BIG idea is very simple then: make people happy. Why? Because if your employees are are happy then your customers will be happy. It’s a win-win scenario. Everyone is happy and it all originated from you. That’s what people will remember, trust me 
Why culture matters
Last week I was dinning at an Italian restaurant with my family. Our waiter was very courteous and by pure observation I could tell he stood out from the rest of the waiters in that restaurant. Two days later I dined at a ‘similar’ Italian restaurant with a few friends and to my surprise got served by the same waiter that served me days earlier at the other restaurant. What gives?
My initial thought was that these restaurants were owned by the same people, but that didn’t make sense since they pretty much have the same menu but their service is different. My second thought was that this waiter had two jobs which was the case.
But that’s not the point. Another observation I made was that this waiter was a better fit on this restaurant than the other one. You could tell there was purpose behind everything they did unlike the other restaurant. This is when it hit me: That’s why he stood out at the other restaurant.
Though I hate it that people have to work two jobs and have to use this particular waiter’s situation as an example, it got me thinking about an organizations culture.
Strategy drives culture
A strategy is at it’s core a guide to behavior. A good strategy drives actions that differentiate the company and produce financial success. And culture is a direct result of what your organizations strategy is including how and why you hire people.
The dominant logic is to see people as interchangeable parts in a system. You hire because you need help and make that decision based on credentials, not because you’re picky and have ‘an idea’ of what type of person ‘fits’ your organization.
This is flawed logic.
Imagine that Microsoft and Google exchanged employees. What would happen? Would Microsoft employees fit Google’s model and vice versa? Absolutely not!
Even though both of them are technology companies, they’re different in their approach in pretty much everything they do.
Different strategies and therefore different cultures. And that is key because their strategy dictates their behavior.
An even more unconventional example is Zappos, an online shoe retailer that knows why culture matters better than anyone (IMO). They hire for weirdness. They’ll even give you money to quit after they’ve hired you, which works as a ‘culture filter’ to weed out people who won’t fit in the long run. And lastly, they have a ‘culture book’ that gets updated every year by everyone in the company. Their goal is to deliver happiness. Enough said!
Closing thoughts…
I’ve argued before that most businesses look the same and operate the same way, the only difference being the name and colors on their logo. Though we tend to put a lot of emphasis on differentiation through product features and service models, we never mention ‘culture’ as the main differentiator. Yet it is people who ultimately execute strategy and the more engaged they are and feel part of something bigger than profits, the bigger the differentiator culture becomes.
Your people are the most important differentiator. As you can see from the examples above, culture matters.
Thoughts? Do you think people are the most important differentiator?
Related articles
What matters: Don’t waste your customers time
In the past month I spent close to 9 hours with support representatives from a couple of companies with whom I’ve had issues with. One is Sprint and the other is Dell.
While 9 hours in a month doesn’t seem like a lot, believe me it’s a lot. When I was in high school I worked at a call center as a tech support representative for Verizon Wireless, so believe me when I say that spending a lot of time on the phone trying to resolve an issue is incredibly annoying for both the customer and the support representative. Especially when you (the customer) doesn’t get the issue resolved. As a support representative you can either make a customers day or you can become the focus of their anger.
One question I ask representatives all the time, which they have no idea how to answer, is: Why do I have to repeat myself every time I’m transferred from one representative to the other?
Wouldn’t it be easier if the first person you talk to took your information, entered it onto ‘the system’ once and it remained there for everyone to access until your matter is solved? This way the next person who gets to talk to you knows what’s going on before you even open your mouth. No seriously, we’ve got the technology to do it we just need someone to start acting differently and do it. Zappos has figured this out and does it in their own kind of way!
Believe me when I say that people take these calls for granted. As customers we know that whenever we call customer support we’re probably going to spend a good amount of time on the phone. What if you (the biz) broke this expectation and actually made it less annoying when we call? Customers are annoyed before they even call!
The issue I had with Dell also got me thinking about the element of time. I was without my laptop for 2 weeks and more is coming because another hardware issue came with the fix so I have to send it back. As I was telling my friend Arnold Beekes about it he suggested that Dell should have provided me with a temporary laptop while mine was being fixed, similar to how car dealerships do when you bring your car in for a check up.
These are the types of things that make a difference in the customer experience but some companies don’t figure it out until it’s too late. What if companies got annoyed when they felt they’ve wasted their customers time? What type of behaviors would emerge? In what ways would their business strategy change? How would their business model change?
Personally the issue of wasting people’s time does not sit well with me, so whenever I feel others (can be company or person) are wasting my time it annoys me. It also works the other way, if I feel that I’m wasting your time it bothers me.
My point is that time is such a precious resource and if you (the biz) mindlessly waste the customers time, you are ignoring a valuable opportunity to exceed their expectations because now more than ever we are more time constrained; we have more activities vying for out attention. If you can make the time customers do spend with you more valuable, you will make a small difference in their lives and that really matters 
Related articles by Zemanta
- You’re Not A Consultant, You’re A Salesperson! (customerthink.com)
- You must make the customer journey, don´t let others explain it to you…. (customerthink.com)
- The Essential Ingredient of Great Customer Service (customerthink.com)
- Customer Experience vs. Profitability (customerthink.com)
