The Secret Behind Zappos Otherworldly Customer Service? Pay Employees To Quit

Say you want to staff your call center with friendly, high energy, intelligent people who want to help customers and who enjoy their job. How do you find them? Well, apparently you hire people, train them, then offer them $1,000 to quit.

From Harvard Business Publishing:

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.” Zappos actually bribes its new employees to quit!

Why? Because if you’re willing to take the company up on the offer, you obviously don’t have the sense of commitment they are looking for. It’s hard to describe the level of energy in the Zappos culture—which means, by definition, it’s not for everybody. Zappos wants to learn if there’s a bad fit between what makes the organization tick and what makes individual employees tick—and it’s willing to pay to learn sooner rather than later. (About ten percent of new call-center employees take the money and run.)

Zappos employees also have no scripts, no call time metrics, and are empowered to do whatever it takes to make you happy.

Why Zappos Pays New Employees to Quit—And You Should Too [Harvard Business Publishing]

Comments

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  1. mantari says:

    That’s so good, it’s evil!

  2. Taed says:

    They do the same thing at Google, except the offer is $1 million.

  3. Me - now with more humidity says:

    Brilliant!

  4. myfakename says:

    It makes sense to me.

  5. xkevin says:

    There was a 3-part interview with the CEO on Yahoo Finance last week. It was pretty interesting.

    [finance.yahoo.com]

  6. thenotwho says:

    That’s fiendish and awesome all at the same time :)

  7. APFPilot says:

    And yet they still don’t have Nike Shox in size 15.

  8. Diet-Orange-Soda says:

    Suddenly, Zappos application box is full.

  9. friendlynerd says:

    Electronics = Newegg.
    Shoes = Zappos.

    Awesome. Need more good companies such as these.

  10. Coelacanth says:

    That’s an excellent strategy!

  11. MattPol says:

    Well based on my experiences shopping with Zappos, this seems to be a perfect strategy!

  12. Any company willing to go that extra mile to make their customers happy, I’m sure would be a better than average employer. If you go thru such hoops to retain the best staff, you’d be jumping into burning houses to keep them.

    Like my old boss said “1 good employee making $15 an hour is better than 2 shit employees at $7.50″

  13. I just assumed they did that whole “coffee is for closers” and “this watch costs more than your car” bit.

  14. Rectilinear Propagation says:

    I’m seriously impressed. That is a scheme worthy of super villainy!

    Zappos employees also have no scripts, no call time metrics, and are empowered to do whatever it takes to make you happy.

    Which helps explain why only 10% leave.

  15. freshyill says:

    I’ve ordered from Zappos a few times, and I plan to do it again. I could complain that they often don’t have my size in stock, but they’re great about alerting you when the stuff you want arrives.

    I think this is a bigger shoe industry problem. I wear sneakers in size 13, which is a little on the big size. BUT, I think shoe stores (Zappos included) just don’t get enough of them, because they’re always sold out. Clearly they’re more popular than they think if I can get anything in size 12 but I have to wait for 13.

  16. bigroblee says:

    @friendlynerd: @friendlynerd: Almost…
    Electronics = Cyberguys
    Shoes = Zappos
    FTFY

  17. overbysara says:

    zappos and netflix. they should get married and have beautiful little internet company babies.

  18. evslin says:

    @Ash78: Nice!

  19. @overbysara: “Have your shoes arrived yet? Would you like us to send replacement shoes? Please rate your shoes! Please come back, here’s NO incentive!”

    Shoebuy also rocks. I often play them against Zappos and just pick the better deal. Consumer FTW.

  20. Zappos charges over list for their shoes, and I don’t consider that a bargain. They used to be great, but now I shop them against shoebuy.com and shoes.com, and they never have the best price. I’ve gotten great service from those two companies, too.

  21. P_Smith says:

    Zappos employees also have no scripts, no call time metrics, and are empowered to do whatever it takes to make you happy.

    And I bet that was the policy at plenty of other companies that now metre every second of their employees’ days and phone calls. First you build a good reputation, then live off it as long as you can while cutting back on the cost of service.

  22. Juliekins says:

    @MonkeySeeMonkeyDo: Yes, but do those other places have a 365-day return policy with free return shipping? (I honestly haven’t checked.) I just returned a pair of gorgeous shoes that made my feet feel like I’d given myself a pedicure with a cheese grater. I’d had the things for two months, probably worn them four times. I was hoping they’d break in, but they just kept getting worse. I’m willing to pay a couple of bucks extra (and often, it really is a sub-$10 difference) if it means I can return a pair of shoes that starts sucking and not get a bunch of hassle about it.

  23. LucyInTheSky says:

    This is amazing. i love it.

  24. descend says:

    I think an even better recommendation is that I use Zappos constantly and have never, ever needed to contact customer service. Every order has been on-time, containing exactly what I ordered.

  25. I_can_still_pitch says:

    I have bought many, many shoes from them. They have a huge selection of the type of hard-to-find shoes my wife likes – steel toed mary-janes for instance, and speed and cost of shipping, plus stellar service on the phone keep me coming back.

  26. opsomath says:

    Dude. How much customer service does it take to buy a pair of shoes? Assuming you know what you want, which you better if you’re buying on teh internets.

    I’d rather pay less, in person, to a sulky high schooler and know what I’m getting.

  27. heavylee-again says:

    Wow, you can’t buy this kind of PR. Or can you, Meg? What’s that new diamond bracelet you have and why does it have a Z monogram on it?

  28. dtmoulton says:

    This is a great story and a perfect example of superior management.

    I can see this working for many easily-filled positions and entry-level positions, regardless of industry. Way to go Zappos.

    Consumerist: Bring more upbeat stories like these!

    Businesses: Do more good things so that Consumerist can post more stories like these!

  29. SaveMeJeebus says:

    Don’t forget:

    Cables = Monoprice

  30. ThunderRoad says:

    I’d love to see a bottom-line analysis between them and some consumer-unfriendly organization like Verizon.

  31. Me - now with more humidity says:

    I wear an odd size — 12 EEEE — and they always have them in stock. Shoebuy sucks. Zappos rocks.

  32. Kajj says:

    @opsomath: Zappos probably has a much higher rate of returned merchandise, just due to the nature of their product, and returns often require assistance from customer service.

  33. tbone13 says:

    too bad they dont price match anymore. they are now an expensive store with great customer service. id rather deal with an asshole locally and get a better price.

  34. jurisenpai says:

    I hate shoe shopping, but adore Zappos. I recently was pricing out a pair of Crocs (the Celeste style), and while Zappos cost about $7 more than other online stores, the free overnight shipping ensured my order would go to Zappos.

  35. TechnoElf says:

    I really like Zappos, but I still miss the price matching they used to do. If there is a sale at a manufacturer’s website I have to go with that =(

  36. darkryd says:

    So what’s to keep people from just signing up to work for them in order to make an extra $1000?

  37. snotcopter says:

    Zappos refunded me the FULL PRICE on an 8-month-old pair of Rockports I bought from them, after I asked them how to contact Rockport’s customer service about the problem (the sole was coming apart). That is way above and beyond good customer service. Try that with a brick-and-mortar retailer. Zappos is the only company I will buy shoes from.

  38. Brie says:

    Zappos did hire one bad apple whom I encountered last year when I called to report that their package hadn’t come. I went through the lengthy phone tree, got a rep, and said “It says ‘delivered,’ but it wasn’t delivered.” She said, “What is your order number?” (no cheerful “Okay, let’s look into that!” or “Hmm, let me look at your account.”) I told her the order number.

    “I show the order as delivered.”

    “Well… right, but IT WASN’T.”

    “If there is a problem with UPS delivery you need to wait 24 hours to report it.”

    *crickets*

    I finally said, “So I need to call back tomorrow?”

    “Yes.”

    *crickets*

    I said, “Wellllllll then. Okay.”

    “Is there anything else?”

    “No…”

    *click*

    I’m guessing she took the $1000. This was last year.

  39. RAREBREED says:

    If only Comcast would start doing this, too!

  40. MHB00 says:

    Zappos not only does all these great things with shoes, but their return policy and great shipping apply to all their merchandise. I’m starting to shop more and more with zappos and less with amazon.

  41. Anonymous says:

    @RAREBREED:
    Then we’d have no one left to answer phones at Comcast.

  42. midwestkel says:

    $1000 for 2 weeks of work? Im there.

  43. dregina says:

    I LOVE ZAPPOS.

  44. nedzeppelin says:

    how is this a good business idea… people will sign up to train just so they don’t have to do any work and get fully paid and a 1000 bonus at the end to boot

  45. Zephyr7 says:

    Wow. Most other companies desperately cling to anyone who’s willing to do an under-trained, under-paid call center job. Hurray for Zappos.

  46. heavylee-again says:

    @midwestkel: $1000 for 2 weeks of work? Im there.

    You’re jumping at $1k for 2 weeks of work? That translates to a yearly salary of $26,000.

  47. I’ve never dealt with this company, but MY company is SO stealing that idea. Paying a grand to get rid of employees who would only cost you ten or more times that much later, plus headaches, is GENIUS.

  48. LAGirl says:

    wow. makes me want to shop @ Zappos.

  49. dugn says:

    @MonkeySeeMonkeyDo: Don’t ever try to return your shoes or track down whether UPS lost your delivery. As I said in a previous post months back about online shoe retailers, I’d pay $5 over list for the service Zappos provides vs. the frightfully inept folks at the other two places.

    The day you have a problem with ShoeBuy, ShoeMall or Shoes.com, trust me – you’ll be a convert to Zappos too.

  50. kathyl says:

    Yeah, I think that offer would be less likely to be “gamed” than some people are suggesting. If you have a better job than the one you would have at Zappos, you wouldn’t leave it just to work two weeks and make the extra $1,000 at the end. If you didn’t have a better job than the one at Zappos, why would you leave it for only $1,000? A job that’s better than the one you had, that you enjoy, where they treat you like an adult and allow you to treat the customers like adults, well, that is worth far more than a grand.

  51. Nakko says:

    I don’t even know what Zappos is. But now I am curious. I know I love shopping at Newegg since they’ve never done me wrong…

  52. BigElectricCat says:

    @verucalise: “Like my old boss said “1 good employee making $15 an hour is better than 2 shit employees at $7.50″

    Word.

    And my wife loves Zappos. Fortunately, we give each other a heads-up before buying things online (so we can plan which frequent flyer or hotel account to put the points in), so I’m never surprised by a big box of shoes waiting on the doorstep when I get home.

  53. chrisjames says:

    @darkryd: On Zappos’s part, probably strict screening criteria. On the applicant’s part, maybe investment on time spent towards career goals. Reading that again, the latter made me chuckle a bit; I’m sure not everyone thinks like me, but it’s a possibility.

  54. chewiemeat says:

    No call-time metrics?

    That kind of infuriates me to hear. I work in tech support and my base salary is $115k. I spend my days working with customers who spend millions on licenses for our enterprise products and hundreds of thousands of dollars per year on support contracts for those products. Support that could include everything from me quoting the manual at them to writing code patches or submitting bugs up the tree for someone else to wrote a patch for.

    And even we have very heavy call metrics.

    No wonder customers hate us.

  55. highmodulus says:

    Zappos is good- another company for the Best Company in America contest many of us have been agitating for.

  56. ahwannabe says:

    @kathyl: ITA. Most people who get jobs do so because they want jobs. The slackers and con artists are the 10%.

  57. Zephyr7 says:

    @ahwannabe: Most people need jobs, because they need money to live. Some people want the job.

  58. KingPsyz says:

    @Taed:
    I really wish this never came out, because here in Vegas Zappos is generally referred to as the google of the desert and now this will attract alot of dumbasses looking for a quick payout…

  59. octoSink says:

    Well, I just called them with a question and the lady who I talked to was awesome. Sounds corny but she was definitely not on a script. I just bought a pair of shoes now.

    Good job Consumerist. I blame you. I’m trying to pay my credit card off.

  60. @dugn: I have had to do returns, and I have never had a single issue. I found them to be just as friendly and helpful as Zappos.

  61. dantsea says:

    The thing is, when you can do things like pay out a grand to get rid of problem call center workers and (I assume) offer top salary in that field, you can be choosy about who you’re hiring. I’d be really surprised if their hiring process was a warm-body cattle call; those just showing up for two weeks just to collect their $1,000 would probably get screened out in the interviews or washed out for not taking the training seriously.

  62. ironchef says:

    A. B. C.
    A always
    B be
    C Closing!

  63. amyschiff says:

    at Disneyworld, new hires are encouraged to “self-select” as in walk out if they don’t think it’s a good fit for them. I think $1k would make that decision a little easier.

  64. moosetoga says:

    The $1k thing is absolute genius. It’s a pretty rare company whose leadership is agile enough to enact such a seemingly risky policy (what if 50% of new hires took the money? 75%?).