WORKER'S PARADISE

Tony Hsieh, CEO of online shoe merchant Zappos.com, asks each employee to write a 100- to 500-word description of the company's culture every year for a book.

The first thing an outsider who reads the volume is likely to ask is, “What kind of drugs are these people on?”

Typical of the comments is this one by warehouse worker Kristopher K.: “Everyone at Zappos is so warm and inviting, like a nice bowl of oatmeal.”

Are these people for real? Apparently so. And they're encouraged to be as real as they want to be.

It's all part of the company's maniacal focus on a customer service-driven culture. Employees have been known to wear costumes while interviewing prospective hires.

This dot-commesque style seems to be working. The company is on track to do $800 million in sales this year, up from $597 million in 2006. That's a good chunk of the total online footwear market for 2006, which totaled $2.9 billion last year, according to Forrester Research.

Zappos eked out its first profit in 2006 — about 1%, according to Hsieh — and is on track to do just a little better this year.

The guiding philosophy? Hsieh refuses to see customer service as an expense. Rather, it's an investment, he says. “Our business is based on repeat customers and word of mouth. There's a lot of value in building up our brand name and what it stands for. We view the money that we spend on customer service as marketing money that improves our brand.”

Zappos has 350 customer service representatives at its Las Vegas headquarters. Its only other facility is a fulfillment center in Kentucky.

The company originally was located in San Francisco, but when it became apparent that the fastest-growing department was the call center in Vegas, Zappos' management decided to move everything there. At the time, about 70 of the firm's 90 employees chose to relocate.

“Las Vegas is a 24/7 city and we run our call center 24/7,” Hsieh says. “We could have decided to open up another call center somewhere, but we felt that if our brand and what we stand for is going to be about customer service, it couldn't be just another department out in the middle of nowhere.”

To gauge phone reps' performance, managers listen in on random calls.

“We score them based on whether or not they went above and beyond for the customer,” Hsieh says. “We don't care if they made a sale or how ‘efficient’ they were. Most call centers try to minimize the amount of time they spend with customers because they view it as an expense. For us, every interaction is a branding opportunity.”

Zappos' call center reps are not scripted and have the power to do most anything they want to make sure the customer leaves the call happy.

“There's really nothing a manager can do that the rep himself or herself can't do,” Hsieh says. “A customer should never have to be transferred for any reason, because the rep can pretty much take care of everything.”

Reps are even encouraged to recommend competitors' Web sites when Zappos doesn't have what shoppers are looking for. The reason: Next time these people are in the market for a new pair of shoes, they'll think of Zappos first.

So what are these reps not allowed to do?

“We say ‘Use your best judgment,’ ” Hsieh says. “Now if some rep decided to refund a customer $1,000 because the shoes arrived a day late, we'd probably have a talk with them.”

Surprisingly, Hsieh readily admits that Zappos underpays. “In terms of salary, we are either at or below market. The higher the position, the more below market we are. At the VP level, you're probably making less than half of what you could be making somewhere else.”

When asked if Zappos offers monetary incentives to employees, Hsieh says: “Nope.”

But the firm does pay 100% of their medical and dental insurance, and offers free lunches, snacks and drinks daily.

Still, Hsieh insists, these benefits aren't remotely what keep employees at Zappos. Once again, it all comes back to the company culture.

“Co-workers will burst into song and dance at random intervals throughout the day,” writes human resources staffer Christa F. “Upon request, the CFO will groom your hair.”

She adds: “Parades. Why, you may ask? Why not!”

To find new employees, Zappos holds regular job fairs, which usually draw a couple of hundred people. After a presentation, the company puts candidates through a speed-interviewing process where each one spends a few minutes with four or five people. About half get invited back for a second interview. About one in 10 get offers.

The corporate culture is on display even at these events.

“Even when we are trying to recruit new people, we are able to ‘act out’ by wearing tiaras and crowns while interviewing the prospects,” customer loyalty employee Aria L. writes in the culture book (titled simply “Culture 2007”).

Hsieh adds, “We hire more for attitude than experience.”

Before anyone can get on the phone with a customer, Zappos offers four weeks of training in which new employees get immersed in — you guessed it — the culture. And there's a standing offer of three weeks' severance if someone decides not to take the job.

“We actually pay people to leave if at any time during the training they don't feel Zappos is right for them,” Hsieh says. “We don't want them stuck in the job just because they need a paycheck. It forces people to commit because if they want to get paid, it's easy money that they can just take and leave.”

That being said, Zappos often has to train certain habits out of employees with prior call center experience. “Newer reps are often trying to protect the company and can be stingier with customers, so we have to train their old, bad habits out of them,” Hsieh says.

If Zappos' book is to be believed, the service atmosphere at the company is extended not just to customers but to co-workers as well.

“It's the peace of mind to not think twice about asking one of my co-workers to take me to the airport or doctor, and the comfort of knowing that I'll have a ride home from the doctor or airport, even if that co-worker lives on the opposite side of town,” writes tech support employee Charles A.

Instead of asking what kinds of drugs these people are on, maybe we should ask where we can get some for ourselves.