Jul 23rd

ROI on Zappos’s Social Media Presence

by @nateriggs

I’m a runner.  But I’ve never ordered a pair of shoes online. For me, having the ability to try shoes on and see how they feel as compared to other shoes is a critical part of my purchase decision. But that’s just me.  Maybe I’m old school.

Today, everyone is buzzing about Amazon’s lofty purchase of the online shoe retailer Zappos.com. Rightly so. It’s a monumental buyout of a company, led by Tony, an individual with an uber-strong social brand. Seth Godin always has really great thoughts on big event like this. I love how Seth looks at things and how he can make a strong case in less than 200 words.

Tony Hsieh, the CEO of Zappos gets how to use social media tools to market a business. He also seems to have a good idea on how to create a vibrant organizational culture that fosters, and even encourages, open communication with consumers. Cool. Zappos is a transparent company. One of the results of being transparent at Zappos is that Tony is now a very wealthy entrepreneur.

But consider this. What is it that really made Zappos famous? Sure, Tony and his company’s use of Twitter and other social technology has been amazing. The company’s leadership into this new media era will be talked about in books and on blogs and maybe even in college classrooms for years to come. The business model is impressive as well, but at the end of the day, do the majority of people buying shoes really care about business models?

You and I noticed Zappos because of stories like this one, or even this one.  There’s literally hundreds of personal stories that rave about how Tony and his brand army consistently go above and beyond expectations in order to form deep relationships with their customers.  These powerful stories are visible 24/7/365 for you and I to find and digest at will, simply by using search engines.

Again, I loved reading Seth’s commentary on this buyout. But I think he forgot something critically important in his post.  Amazon didn’t just buy a business model or culture or leadership.  With all of that, they also bought a digital library of powerful user generated brand stories.

Consumers who had been converted into raving fans because of outstanding customer service, used technology tools to become marketing channels and spread the message to their own social circles.  All of these searchable stories are now living forever online, and are key elements in Zappos’s unique Total Internet Presence SM.  Tony has led a culture that has empowered his company (and his customers) to develop a strong TIP.

(Side thought: What’s more amusing is that I’m not even a customer of Zappos, and yet, simply publishing this blog post is adding to Zappos’s Total Internet Presence SM)

How strong?  Well, Amazon believes Zappos’s TIP is worth about $800 million bucks.  That’s a pretty decent ROI, right?

by @nateriggs

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Comments (13)
  • http://www.timlaubacher.com/ Tim Laubacher

    I have not yet read much about Amazon’s purchase of Zappos. I heard about it, and then I noticed your blog post. Is Zappos’ management and employee structure going to remain intact, or at least similar?

    Amazon certainly sees the value in these stories that will live forever online. But now that Zappos is owned by Amazon, that too becomes part of the story. Will the online shoe retailer that made it big by providing extraordinary customer service be able to maintain and exceed past levels of customer-brand interaction? Or will something change for the worse?

    I guess the stories posted daily online will tell.

  • http://www.timlaubacher.com Tim Laubacher

    I have not yet read much about Amazon’s purchase of Zappos. I heard about it, and then I noticed your blog post. Is Zappos’ management and employee structure going to remain intact, or at least similar?

    Amazon certainly sees the value in these stories that will live forever online. But now that Zappos is owned by Amazon, that too becomes part of the story. Will the online shoe retailer that made it big by providing extraordinary customer service be able to maintain and exceed past levels of customer-brand interaction? Or will something change for the worse?

    I guess the stories posted daily online will tell.

  • http://twitter.com/Ninedotscreativ Julia Kinslow

    Nate:

    You developed a great case on how including a “Total Internet Presence” as part of an overall marketing strategy can provide a an amazing impact on ROI. As a consultant, I am constantly searching for proof to illustrate to other consultants and small business owners the value of having an online presence and how it translates into a positive ROI for them. Leaders in the business seem to come to the conclusion: the medium is too new to fully understand how it will impact ROI.

    I think the Amazon-Zappos union will be one of the first (if not the biggest) business models of how having a Total Internet Presence translates to a lucrative ROI.

    The thing to watch is to see if Amazon maintains Zappos customer service ideals over time, or if Zappos will erode into a historical, big business model template. I hope for the former.

    All the best, Julia Kinslow

  • http://twitter.com/Ninedotscreativ Julia Kinslow

    Nate:

    You developed a great case on how including a “Total Internet Presence” as part of an overall marketing strategy can provide a an amazing impact on ROI. As a consultant, I am constantly searching for proof to illustrate to other consultants and small business owners the value of having an online presence and how it translates into a positive ROI for them. Leaders in the business seem to come to the conclusion: the medium is too new to fully understand how it will impact ROI.

    I think the Amazon-Zappos union will be one of the first (if not the biggest) business models of how having a Total Internet Presence translates to a lucrative ROI.

    The thing to watch is to see if Amazon maintains Zappos customer service ideals over time, or if Zappos will erode into a historical, big business model template. I hope for the former.

    All the best, Julia Kinslow

  • Chuck Palmer

    First and foremost Zappos is a good retailer. I would say, even better than Amazon. I say that because Zappos has built this army of loyal customers by being loyal to them and the inherent promise of the merchant/customer relationship. This has always been the key to good retail, regardless of where the transaction and delivery occur.

  • http://www.agent-seo.com/ Jacob Stoops

    I don’t even know that much about Zappos, and actually I’m more like you in that I prefer to try on my shoes before I purchase them. Like everyone else, I’m totally impressed with their ability to go above and beyond, placing the customer above all else. In a world where being half-assed is often rewarded, it’s nice to see someone get recognized for going above the normal call of duty.

    It will be interesting to see if amazon will be able to maintain to brand & culture that Zappos has created? Anyhow, great perspective Nate! Always get some good nuggets from your blog!

  • http://www.agent-seo.com Jacob Stoops

    I don’t even know that much about Zappos, and actually I’m more like you in that I prefer to try on my shoes before I purchase them. Like everyone else, I’m totally impressed with their ability to go above and beyond, placing the customer above all else. In a world where being half-assed is often rewarded, it’s nice to see someone get recognized for going above the normal call of duty.

    It will be interesting to see if amazon will be able to maintain to brand & culture that Zappos has created? Anyhow, great perspective Nate! Always get some good nuggets from your blog!

  • Chuck Palmer

    First and foremost Zappos is a good retailer. I would say, even better than Amazon. I say that because Zappos has built this army of loyal customers by being loyal to them and the inherent promise of the merchant/customer relationship. This has always been the key to good retail, regardless of where the transaction and delivery occur.

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