How much is culture worth? $1000 per FTE for Zappos.

20 05 2008

Zappos gets lots of love. Their customer service is legendary, which is incredible given that they expect revenues to approach $1 billion in 2008. That’s a lot of feet to make happy.

As startups obsess about their culture, there is an inevitable ‘corporatization’ that takes place when it’s no longer possible to know every one of your coworkers. How has Zappos maintained a culture of customer service among all 1600 employees? The answer lies in “The Offer“:

“It’s a hard job, answering phones and talking to customers for hours at a time. So when Zappos hires new employees, it provides a four-week training period that immerses them in the company’s strategy, culture, and obsession with customers. People get paid their full salary during this period. After a week or so in this immersive experience, though, it’s time for what Zappos calls “The Offer.” The fast-growing company, which works hard to recruit people to join, says to its newest employees: “If you quit today, we will pay you for the amount of time you’ve worked, plus we will offer you a $1,000 bonus.” - Bill Taylor

Isn’t that incredible? It is worth a grand to Zappos to find out now, rather than later, if their new employees buy in to the culture or not. Think of the ROI on that investment - Zappos has defied the odds and built an invaluable brand by creating a culture of fanatical service, and ingrained that culture with tangible policies and practices. Hats off to them.

What’s scary is that this is your competition and mine. Doesn’t matter if you sell shoes or houses or laser beams. This is the bar we are all measured against.


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