Tony Hseih, CEO of Zappos, at a 2010 book signing.

In 1999, at the age of 24, Tony Hsieh (pronounced Shay) sold a company he co-founded (Link Exchange), to Microsoft for $265 million. He then joined Zappos.com  as an advisor and investor, and eventually became CEO, where he helped Zappos.com grow to over $1 billion in annual sales while simultaneously making Fortune magazine’s annual “Best Companies to Work For” list.

In November 2009, Zappos.com was acquired by Amazon.com in a deal valued at $1.2 billion on the day of closing.

That’s when he decided to write his first book, Delivering Happiness, which debuted in 2010 at the top of the New York Times best seller list, where it remained for 27 weeks.

Hsieh spoke recently at a conference on how personalization is changing marketing. While other CEO’s talked about personalizing marketing messages and displaying web pages that delivered content selected based on extensive profiles they’d compiled about their customers, Hsieh talked about encouraging employees to reach out to consumers on an individual basis.

“At Zappos, we have an acronym called PEC, which stands for Personal Emotional Connection,” he said.

“There are lots of different ways of delivering great customer service. Some companies like to focus on technology and efficiency, and take the high-tech approach. We’d rather take the high touch approach,” Hsieh said.

“That’s why in our call center, we don’t have scripts and instead we encourage our employees to just be themselves and connect with whoever’s calling in a personal way.

“So, for example, if the customer happens to be from the same hometown, they might be able to talk about that. Or if they hear a dog backing in the background and the rep also has a dog, then they can bond over whatever dog owners bond about.”  (Hseih “sort of” has a cat.)

“And so we really just leave it up to each rep to do something that fits their personality and the customer’s personality and together they can create the Personal Emotional Connection.”

Of course, Zappos also has some very high-tech solutions in place as well – like robots that deliver orders to the shipping areas, and one of the most automated warehouses in the world where RFID technology keeps track of stock. And they have the famous “no hassle policy” for returns – customers can return purchases at no cost for any reason or no reason at all.

Zappo’s shoppers are intensely loyal – and so are Zappo’s employees. I’ve often compared other online stores to Zappo’s, and they always come up short. If you’re looking for a business book to read this summer, start with Hsieh’s Delivering Happiness.

Just this weekend, for instance, I went shopping — first at local stores, then calling a catalog provider (J. Jill), and then online (Neiman Marcus, J. Jill, Ellie Tahari, and Zappos).  I wound up buying only the items from Zappos — everything else I wanted was out of stock, not available in my size despite being listed on the site as being available, or on back order. 

It reminded me once again just how good Zappos is at delivering happiness.  If only the rest of the world would read Hseih’s book — and follow his example!

For the Creative Commons Photo credit, click here.