How to Make a Billion Dollars Through Marketing

The best entrepreneurs are marketers at heart. They understand that business is not just about selling stuff. They know the best companies deliver more than just a product. That’s how Zappos CEO Tony Hsieh transformed a small online shoe retailer into a company that sold to Amazon for nearly a billion dollars.

Three months before the historic sale, Hsieh delivered the opening remarks to the SXSW Interactive Festival in Austin, Texas. In the seven minute video below Hsieh reveals his billion dollar secret sauce.

(Email subscribers and and feed readers, if you don’t see the video player, click here: The Marketing Spot Blog)

I’ve long preached here that the customer experience should be part of your marketing plan, and Hsieh verified that he does too:

“Our philosophy is: Take most of the money we would have spent on paid marketing, and instead, put that into the customer experience. And then let the repeat customers and word of mouth be our true form of marketing. A lot of the things we do in the customer experience domain, we just think of as our marketing dollars.”

Focusing on the customer experience allows you do stand out from the crowded pack. Hsieh asks the question: With consumers being bombarded by thousands of marketing messages, how do you get your brand to stand out?

“The telephone is actually one of the best branding devices out there. You have your customers’ undivided attention for 5-10 minutes, and if you get the interaction right, that’s something they’ll remember for a very long time, and also tell their friends and family about.”

Hsieh goes on to say that because they always have their phone number front and center, Zappo’s actually talks to (has a conversation with) most of their customers. Think about that, Zappo’s has actual conversations with most of their customers.

“We’re not trying to maximize every single transaction. We’re trying to build a life-long relationship with each of our customers, one call at a time.”

As part of this philosophy, Zappo’s likes to surprise repeat customers with upgraded free, overnight shipping. The effect is to create a “Wow!” experience that causes word of mouth and strengthens customer loyalty. And while most companies would view this practice as an additional expense, Hsieh and Zappo’s view it as a marketing campaign.

In his final comments of the video Hsieh says that Zappo’s asked themselves a question that all businesses should ask themselves: What do we want to be when we grow up? This is actually a branding question, and at the heart of how Zappo’s became a billion dollar company. Hsieh’s answer:

“Do we want to be about shoes, or something bigger? And we decided we wanted to be about customer service.”

Hsieh and Zappo’s knew that strong brands are not about the product they sell, they are about something else. Zappo’s is actually a customer service company that uses shoes as its reason to deliver remarkable customer experiences.

Rather than their favorite NFL quarterback, maybe all aspiring entrepreneurs should have poster of Tony Hsieh on their wall. Are you an entrepreneur with a marketer’s heart?

[You may want to read Tony Hsieh’s book: Delivering Happiness]