Never Outsource Your Core (Book Review of "Delivering Happiness," by Tony Hsieh, Part 1 of 3)
Tony Hsieh doesn't just "get" customer service, he's made a bajillion dollars from it. And his new book, Delivering Happiness, isn't just a history of the making of said bajilions, but an essential read for anyone looking to understand customer satisfaction in today's marketplace.
We throughly enjoyed the book and recommend it entirely, and we found three ideas are particularly interesting:
- Never Outsource Your Core Competency
- Your Culture Is Your Brand
- Service That WOWs Translates to Great Marketing
In this first post (of a three-part review), let's take a look at: Never Outsource Your Core Competency
The Warehousing Dilemma
Early on, Zappos hired a company called eLogistics to store and ship its inventory of shoes. However, eLogistics didn't have the infrastructure to ship the orders accurately and was consistently behind in updating inventory. It was a mess, and to preserve the brand, Zappos had to set up its own warehouse. The company built a facility with the capacity to grow.
The takeaway for Hsieh?
We learned that we should never outsource our core competency. As an e-commerce company, we should have considered warehousing to be our core competency from the beginning. Outsourcing that to a third party and trusting that they would care about our customers as much as we would was one of our biggest mistakes. If we hadn't reacted quickly, it would have eventually destroyed Zappos.
If shipping is core, it has to be done correctly. And even if the infrastructure exists, any customer touchpoint must be met with the same passion and excellence or your brand will suffer.
Telephones
As time progressed, Tony and the team determine that the Zappos brand had to be about more than just selling shoes. They determined that it would be about offering the very best in customer service.
Soon thereafter, they considered outsourcing their call center activities overseas. But equipped with the lesson learned from the eLogistics debacle, and the company's newfound focus on service, Zappos kept call center activities in-house. Hsieh and his team recognized the deep value of a phone interaction, and in the long run they scored a huge win.
As unsexy and low-tech as it may sound, our belief is that the telephone is one of the best branding devices out there. You have the customer's undivided attention for five to ten minutes, and if you get the interaction right, what we've found is that the customer remembers the experience for a very long time and tells his or her friends about it.
Conclusion
On the surface, warehousing and phone support might seem auxiliary to your business; they may seem ripe for pruning and restructuring. But proceed cautiously. The heart of these things are customer contact points, and that needs to be your passion. Guard them. Keep them under your control (as much as possible). Don't make the mistake Zappos initially made. Your customer relationship is your core competency.
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