Friday, 25 June 2010

Brands organisations must resist pressures from the demands of short-sighted share-holders

This is a great article by Customer Think about Tony Heish’s (CEO Zappos) decision to sell to Amazon.

It cuts to the heart of what this blog is all about.

Heish faced a dilemma that all CEOs face:

Either; bow to short-term share holder financial pressure...
Or; maintain Zappo’s commitment (and investment) to delivering brand experiences that delight consumers.

Zappo’s has a great reputation. [See my previous posting about their commitment to a culture and values that focused on WOWing consumers’ through service.]

To protect Zappo’s hard earned reputation Heish sold to Amazon [Another great brand experience organisation.]

It was really smart move.

The article quotes Heish’s rationale:

“...Some board members had always viewed our company culture as a pet project — “Tony’s social experiments,” they called it. I disagreed. I believe that getting the culture right is the most important thing a company can do. But the board took the conventional view — namely, that a business should focus on profitability first and then use the profits to do nice things for its employees.

... (I thought) better service would translate into lots of repeat customers, which would mean low marketing expenses, long-term profits, and fast growth.”

I totally agree.

It is simple. Delight your consumer and they will reward you with long-term loyalty, advocacy and more sells.

Zappo’s net sales were up almost 50 percent in first quarter of 2010...evidence that Heish got it right.

If you work at a brand organisation it would be really good idea to look at how you are delivering brand experiences across the path to advocacy and see how you can replicate Zappo’s success.

1 comment:

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