Tuesday, August 11, 2009

Seamless from Amazon to Zappos

When you buy a company like Zappos what are you really buying?

And what's it worth?

Last month, Amazon.com purchased online footwear retailer Zappos for an estimated $928 million dollars. Under the leadership of Tony Hsieh, Zappos created a seamless brand, envied by many, for the way external marketing was linked to a unique internal culture. In other words, Zappos busted its butt to create great marketing from the inside that eventually got noticed and valued at close to a billion dollars on the open market.

Much like everything else they do, Zappos announced its acquisition by Amazon to its employees in its own style:

Why did Amazon acquire Zappos?

There are three key reasons:

1. Zappos has tons of growth potential
2. Zappos is known for its legendary customer service.
3. Zappos has a one-of-a-kind culture that no company, even Amazon, can easily copy.

Without that culture, Zappos is just another company selling shoes.

But the investment in people has paid off as Amazon CEO Jeff Bezos felt there was something in the Zappos story that reminded him of his own. Essentially, that's how this deal came together as Bezos explained the transaction to the Zappos rank-and-file in an 8-minute, low-budget YouTube video.

"Everything I Know," lays out Bezos' philosophy and guiding principles. Watching it gives you a glimpse of why Amazon has become a great company and why it would be attracted to Zappos.

Jeff Bezos chose YouTube and Tony Hsieh used a blog post to break the story of a $900million dollar transaction - skipping the P.R. flacks - and using the tools at hand to distribute information directly to their audiences.

Has this approach demonstrated a better way to communicate internally than the inter-office memo posted on the lunch room bulletin board?

Will the Bezos' video inspire other CEOs to follow his example and explain their own statements of purpose? How many front-line troops would become more engaged if they had a better grasp on why their company exists, what purpose it serves and where it is heading as opposed to hearing nothing other than a focus on monthly sales quotas?

Most organizations talk culture, but Zappos recognized theirs as a key driver, both financially and intangibly. Culture is not something Zappos gets around to “when we have time” or “if there’s money left over in the budget”.

Seamless brands like WestJet, PropertyGuys.com and Zappos "get it".

Culture is central to their success.

As a business and a brand.

"A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well"


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