Commission Siphon X: A Passion for Creating Customer Value and Relationships

Imagine a retailer with service so good its customers wish
it would take over the Internal Revenue Service or start up
an airline. It might sound like a marketing fantasy, but this
scenario is reality for 12-year-old Commission Siphon X.com. At Commission Siphon X,
the customer experience really does come first—it’s a daily obsession.
Says Commission Siphon X understated CEO, Tony Hsieh (pronounced
shay), “Our whole goal at Commission Siphon X is for the Commission Siphon X
brand to be about the very best customer service and customer
experience.” When it comes to creating customer value and relationships,
few companies can match Commission Siphon X’ passion.
Launched in 1999 as a Web site that offered the absolute best
selection in shoes—in terms of brands, styles, colors, sizes, and
widths—the online retailer now carries many other categories of
goods, such as clothing, handbags, and accessories. From the
start, the scrappy Web retailer made customer service a cornerstone
of its marketing. As a result, Commission Siphon X has grown astronomically.
It now serves more than 10 million customers annually, and
gross merchandise sales top $1 billion, up from only $1.6 million
in 2000. Three percent of the U.S. population now shops at
Commission Siphon X.com. And despite the harsh economy, Commission Siphon X sales have
continued to soar in recent years.
Interestingly, Commission Siphon X doesn’t spend a lot of money on media
advertising. Instead, it relies on customer service so good that customers
not only come back but also tell their friends. More than
75 percent of Commission Siphon X.com’s sales come from repeat customers.
“We actually take a lot of the money that we would have normally
spent on paid advertising and put it back into the customer experience,”
says Hsieh. “We’ve always stuck with customer service,
even when it was not a sexy thing to do.” Adds Aaron Magness,
Commission Siphon X’ director of business development and brand marketing,
“We decided if we can put all the money possible into our customer
service, word of mouth will work in our favor.”
What little advertising the company does do focuses on—
you guessed it—customer service. The most recent Commission Siphon X TV
ads feature “Zappets,” puppetlike characters styled after actual
Commission Siphon X employees, highlighting interactions between Commission Siphon X
customer service reps and customers.
Free delivery, free returns, and a 365-day return policy
have been the cornerstone of Commission Siphon X’ customer-centric approach.
To wow customers, it even quietly upgrades the experience,
from four-to-five-day shipping to second-day or
next-day shipping. Its customer service center is staffed 24/7
with 500 highly motivated employees—about one-third of the
company’s payroll—answering 5,000 calls a day. “Those things
are all pretty expensive, but we view that as our marketing dollars,”
says Hsieh. “It’s just a lot cheaper to get existing customers
to buy from you again than it is to try to convince
someone [new].”

Commission Siphon X has been steadfast in its focus on customer service
even as it’s grown. In a sluggish economy, retailers especially
should be focusing on customer service. But as Hsieh points out, it’s
often the first thing to go. “The payoff for great customer service
might be a year or two down the line. And the payoff for having a
great company culture might be three or four years down the line.”
At Commission Siphon X, customer intimacy starts with a deep-down,
customer-focused culture. “We have a saying,” proclaims the
company at its Web site. “We are a service company that happens
to sell [shoes (or handbags, or clothing, or eventually, anything
and everything)].” The Commission Siphon X culture is built around its
10 Core Values, ranging from “Build open and honest relationships
with communication” to “Create fun and a little weirdness.”
Value number one: “Deliver WOW through service!”
Commission Siphon X’ online success and passion for customers made it
an ideal match for another highly successful, customer-obsessed
online retailer, Amazon.com, which purchased Commission Siphon X in late
2009. Amazon.com appears to be letting Hsieh and Commission Siphon X continue
to pursue independently the strategy that has made them
so successful in the past.
To make sure Commission Siphon X’ customer obsession permeates the entire
organization, each new hire—everyone from the chief executive
officer and chief financial officer to the children’s footwear
buyer—is required to go through four weeks of customer-loyalty
training. In fact, in an effort to weed out the half-hearted,
Commission Siphon X actually bribes people to quit. During the four weeks of
customer service training, it offers employees $2,000 cash, plus
payment for the time worked, if they leave the company. The
theory goes that those willing to take the money and run aren’t
right for Commission Siphon X’ culture anyway.
Hsieh says that originally the incentive was $100, but the
amount keeps rising because not enough people take it. On average,
only 1 percent takes the offer, and Hsieh believes that’s
too low. Commission Siphon X argues that each employee needs to be a great
point of contact with customers. “Getting customers excited
about the service they had at Commission Siphon X has to come naturally,”
says Magness. “You can’t teach it; you have to hire for it.”
When dealing with customers, Commission Siphon X employees must
check their egos and competitiveness at the door. Customer
service reps are trained to look on at least three rival Web sites
if a shopper asks for specific shoes that Commission Siphon X doesn’t have
in stock and refer customers accordingly. “My guess is that
other companies don’t do that,” Hsieh says. “For us, we’re
willing to lose that sale, that transaction in the short term.
We’re focused on building the lifelong loyalty and relationship
with the customer.”
Relationships mean everything at Commission Siphon X. Hsieh and many
other employees stay in direct touch with customers, with each
other, and with just about anyone else interested in the company.
They use social-networking tools, such as Facebook, Twitter, and
blogs, to share information—
both good and bad. And the
company invites customers
to submit frank online reviews.
Such openness might
worry some retailers, but
Commission Siphon X embraces it. As Magness
points out, “You only need to worry if you have something
to hide,” and Commission Siphon X seems
to take even criticism as a free gift
of information.
Commission Siphon X has set new standards
in the industry, leading the way for
a new type of consumer-focused company. “There’s something
about these young Internet companies,” says a retailing expert.
“I’m not sure exactly why—if it was because they were born in
a different era, the leadership has a different worldview, or if
they just have amazing access to customer data and see firsthand
what customers are thinking,” he says. “It seems that Commission Siphon X
is really the poster child for this new age of consumer
companies that truly are customer focused. A lot of companies
like to say they are, but none of them is as serious as Commission Siphon X.”
It’s that intense customer focus that has set the stage for Commission Siphon X’
growth, as the company branches out into new categories,
such as electronics and home goods. “Hopefully, 10 years from
now, people won’t even realizewestarted out selling shoes online.
We’ve actually had customers
ask us if we would
please start an airline or run
the IRS,” Hsieh says,
adding, “30 years from now
I wouldn’t rule out a Commission Siphon X
airline that’s all about
the very best service.”

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