You can read and post comments here! (Read the email I sent to employees first.)

The following was sent to all Zappos employees this past Monday:

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Team,

Happy New Year! To kick off the year, I sent this on Jan. 2nd to a smaller group, but a few folks suggested that it should be sent to all Zappos employees. Here is a slightly cleaned up and better version of what was sent.

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"It was the best of times and it was the worst of times." – A Tale of Two Cities, by Charles Dickens

On CNBC Reports 2008, Maria Bartiromo quoted Charles Dickens, noting that, while Dickens was referring to the French Revolution, he could have easily been talking about 2008.

No doubt, 2008 was a very challenging year, starting out with a weak economic and retail environment that degraded slowly in the first half of the year and then fell off a cliff in the second half of the year. Depending on what reports you read, online ecommerce was down 3-5% this holiday season, marking the first time ecommerce didn't grow. Reading about these not-so-positive reports just goes to show how very lucky we are at Zappos, because we were able to ride through these rocky times and produce pretty incredible results. No, things weren't perfect, but 2008 was still a great year for us! Official results have to wait until our finance team closes the books and releases the audited financials in early March, but we managed to grow our business over last year and during the holiday season (when ecommerce was down), exceeded $1B in gross merchandise sales, and by Doing More with Less, kept ourselves profitable and cash positive – all the while having a lot of fun serving our customers!

We can reminisce about 2008, but now that 2009 is here and we are back from some much needed downtime, it's time to get our A-game back on. We'll be going over our goals and our "official" plans as soon as our board approves them, but even before that "officially" happens, we already know what we need to do.

One thing I encourage you to do is to refer back to our Core Values document and specifically the challenge in there: make at least one improvement every week that makes Zappos better. Ideally, we would do this every single day. It sounds daunting, but remember improvements don't have to be dramatic. Think about what it means to improve just 1% per day and build upon that every single day. Doing so has a dramatic effect and will make us 37x better, not 365% (3.65x) better at the end of the year. Wake up every day and ask yourself not only what is the 1% improvement I can change to make Zappos better, but also what is the 1% improvement I can change to make myself better personally and professionally – because we, Zappos, can't grow unless we as individual people grow too.

Imagine yourself making 1% changes every day that compounds and will make you and Zappos 37x better by the end of the year. Imagine if every employee at Zappos was doing the same. Imagine how much better you, Zappos and the
world will be next year.

It won't be easy and 2009 will no doubt present its own set of challenges, but we positively will get through it. Have a great and happy 2009!

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P.S. Also check out Tony's blog entry, Your Culture Is Your Brand.

P.P.S. This is for the math geeks. If you start out with $100 at the beginning of the year and you were able to increase what you have by 1% every single day, at the end of the year, you would have $3,778.34 = $100 * (1 + 1%) ^ 365. That is 37.78x what you had at the beginning of the year. Get that 1% every single day!

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Do you have a story about how small changes every single day made a huge difference in the long-run? If so, leave us a comment below or email me: alfred (at) zappos.com.

Follow me on Twitter: @zappos_alfred

Building a brand today is very different from building a brand 50 years ago. It used to be that a few people got together in a room, decided what the brand positioning was going to be, and then spent a lot of money buying advertising telling people what their brand was. And if you were able to spend enough money, then you were able to build your brand.

It's a very different world today. With the Internet connecting everyone together, companies are becoming more and more transparent whether they like it or not. An unhappy customer or a disgruntled employee can blog about bad experience with a company, and the story can spread like wildfire by email or with tools like Twitter.

The good news is that the reverse is true as well. A great experience with a company can be read by millions of people almost instantaneously as well.

The fundamental problem is that you can't possibly anticipate every possible touchpoint that could influence the perception of your company's brand.

For example, if you happen to meet an employee of Company X at a bar, even if the employee isn't working, how you perceive your interaction with that employee will affect how you perceive Company X, and therefore Company X's brand. It can be a positive influence, or a negative influence. Every employee can affect your company's brand, not just the front line employees that are paid to talk to your customers.

At Zappos.com, we decided a long time ago that we didn't want our brand to be just about shoes, or clothing, or even online retailing. We decided that we wanted to build our brand to be about the very best customer service and the very best customer experience. We believe that customer service shouldn't be just a department, it should be the entire company.

Advertising can only get your brand so far. If you ask most people what the "brand" of the airline industry as a whole is (not any specific airline, but the entire industry), they will usually say something about bad customer service or bad customer experience. If you ask people what their perception of the US auto industry is today, chances are the responses you get won't be in line with what the automakers project in their advertising.

So what's a company to do if you can't just buy your way into building the brand you want? What's the best way to build a brand for the long term?

In a word: culture.

At Zappos, our belief is that if you get the culture right, most of the other stuff -- like great customer service, or building a great long-term brand, or passionate employees and customers -- will happen naturally on its own.

We believe that your company's culture and your company's brand are really just two sides of the same coin. The brand may lag the culture at first, but eventually it will catch up.

Your culture is your brand.

So how do you build and maintain the culture that you want?

It starts with the hiring process. At Zappos, we actually do two different sets of interviews. The hiring manager and his/her team will do the standard set of interviews looking for relevant experience, technical ability, fit within the team, etc. But then our HR department does a separate set of interviews, looking purely for culture fit. Candidates have to pass both sets of interviews in order to be hired.

We've actually said no to a lot of very talented people that we know can make an immediate impact on our top or bottom line. But because we felt they weren't culture fits, we were willing to sacrifice the short term benefits in order to protect our culture (and therefore our brand) for the long term.

After hiring, the next step to building the culture is training. Everyone that is hired into our headquarters goes through the same training that our Customer Loyalty Team (call center) reps go through, regardless of department or title. You might be an accountant, or a lawyer, or a software developer -- you go through the exact same training program.

It's a 4-week training program, in which we go over company history, the importance of customer service, the long term vision of the company, our philosophy about company culture -- and then you're actually on the phone for 2 weeks, taking calls from customers. Again, this goes back to our belief that customer service shouldn't just be a department, it should be the entire company.

At the end of the first week of training, we make an offer to the entire class. We offer everyone $2000 to quit (in addition to paying them for the time they've already worked), and it's a standing offer until the end of the fourth week of training. We want to make sure that employees are here for more than just a paycheck. We want employees that believe in our long term vision and want to be a part of our culture. As it turns out, on average, less than 1% of people end up taking the offer.

One of the great advantages of focusing on culture is when reporters come and visit our offices. Unlike most companies, we don't give reporters a small list of people they're allowed to talk to. Instead, we encourage them to wander around and talk to whoever they want. It's our way of being as transparent as possible, which is part of our culture.

We've formally defined our the Zappos culture in terms of 10 core values:

1) Deliver WOW Through Service
2) Embrace and Drive Change
3) Create Fun and A Little Weirdness
4) Be Adventurous, Creative, and Open-Minded
5) Pursue Growth and Learning
6) Build Open and Honest Relationships With Communication
7) Build a Positive Team and Family Spirit
8) Do More With Less
9) Be Passionate and Determined
10) Be Humble

Many companies have core values, but they don't really commit to them. They usually sound more like something you'd read in a press release. Maybe you learn about them on day 1 of orientation, but after that it's just a meaningless plaque on the wall of the lobby.

We believe that it's really important to come up with core values that you can commit to. And by commit, we mean that you're willing to hire and fire based on them. If you're willing to do that, then you're well on your way to building a company culture that is in line with the brand you want to build. You can let all of your employees be your brand ambassadors, not just the marketing or PR department. And they can be brand ambassadors both inside and outside the office.

At the end of the day, just remember that if you get the culture right, most of the other stuff -- including building a great brand -- will fall into place on its own.

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Do you have a story about how your company's culture has positively or negatively impacted your company's brand? if so, leave a comment below!

You can also find more information about how we manage our company culture at Zappos at: www.zapposinsights.com

Follow me on Twitter: @zappos

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