Customer Service
I listened to that Zappos presentation online. Forgetting about the record exec who toured the premises and found out his wife had spent $62,000 on shoes, what struck me is we don’t have people like Tony Hsieh in the music business. Who in their right mind would want to go to work in the music business when their bosses will make all the money and stifle any innovative ideas? What’s worse, the music being purveyed has been less than exciting. It would be like entering a world where the only car available was the Chevy Malibu. Something that will get you there, but you’ll never be proud to arrive in.
This lecture took place at SXSW. Not at the music festival, that’s about wannabe bands thinking they’re going to get noticed the same way these idiots press CDs upon tastemakers in order to make themselves feel good, like they’re doing something, furthering their careers. Rather, Mr. Hsieh’s presentation took place at the Interactive festival. Where a who’s who of the tech world came to exchange ideas and tweets to the point where their iPhones were unusable, overloading AT&T’s network. That’s a true story. It might have eluded you if you’re focusing on SoundScan and BDS, but that’s how news is today. Just like music before MTV, certainly before AOR, tech is a cult that the mainstream oftentimes doesn’t understand, but to those involved, it’s everything!
If you want to have a fulfilling, enriched life today you don’t start a band, you start a company! Is your desire to date Mariah Carey or have enough money to attract reasonable members of the opposite sex? Do you want to have people tell you what to do or do you want to be in charge of your own destiny? Tech is about innovation. What do they say, "Innovate or die"? Whereas in the music business it’s "I don’t hear a single."
Of course it’s changing in the music business. That’s what those in power can’t understand. That all the innovation is taking place at the grass roots level. By people who want nothing to do with a major label and don’t care about radio, yet unfortunately have to deal with Ticketmaster and Live Nation. Bands are doing it for themselves. And if you don’t think this is good, you’re probably someone who wants to join the military to have someone tell you what to do. Music is art. It’s about creativity. It’s about testing limits. If you don’t have the freedom to do a 180, it doesn’t work.
Some of the Tony Hsieh’s of this world tried to function in the music sphere. But they found out the rights holders didn’t want them to, that the rights holders are bullies, beholden to the old ways. The word is out, so these innovators deal with suppliers who want to make money, who see online as their future, as opposed to calcified twentieth century corporations married to the old ways.
Mr. Hsieh focused first on customer service. That’s Zappos’ mantra. They put their phone number right at the top of their site. They want you to call, to establish a bond. Their longest customer service call was six hours! It’s not about immediate dollars and cents, it’s about the long haul relationship.
Which is why Zappos doesn’t list what it doesn’t have in stock, it’s too frustrating for the consumer. Which is why Zappos will turn a customer on to product at a competitor’s site if they don’t have it in stock themselves. Which is why they upgrade shipments to overnight delivery, for free. Zappos wants you to feel good about the company, so you wouldn’t dare going anywhere else.
Compare this to Live Nation. Which pisses off each and every customer. With all these added fees. Live Nation says it’s got its hands tied. Bullshit. Zappos is about repeat customers, it focuses on them, builds on them. If the average Live Nation customer goes to a show under two times a year, how can you build a business? And believe me, that’s the reality, Rapino utters this statistic again and again.
Sure, the superstars might rape Live Nation in a deal, but how about the beginning acts? How about all-in ticketing for beginning acts? How about free parking? How about discount food?
The future of Live Nation is new acts, which the company itself must develop. The major labels aren’t gonna develop them, they’re going to turn into licensing houses for their catalog, they’re going to develop one hit wonders, who can sell tickets briefly, if at all. Live Nation isn’t in business with Doug Morris, but the kid on the street, with the new band, that’s got a new manager, who hopefully will tell his agent to partner with the promoter, for the benefit of everybody involved.
The Eagles and the Stones are not going to tour forever. The classic rock acts are in their sunset years. What is Live Nation’s plan for the future? The same one the major labels had to deal with Napster? We can see the future coming. Niche acts, developed online. How does Live Nation insure it survives?
By merging with Ticketmaster, the most hated corporation on the planet. Sure, we insiders know that Ticketmaster is just a front for the acts, but is this good for business? Why can’t the industry get its house in order, why can’t there be all-in ticketing, doesn’t this added fee chaos hurt everybody?
Stunningly, the prices at Zappos are not cheap. I checked a pair of Nikes with the same shoes on the manufacturer’s site. Nike itself was selling them cheaper! But people go to Zappos for the service. People will pay $1000 to Bon Jovi to sit in the first row, they think it’s worth it. But no, Jon’s got to employ subterfuge, he’s got to sell those tickets on TicketExchange, so he doesn’t look greedy. When you go to buy a BMW, do they bait and switch you? No, BMWs are expensive! But the customer believes that they’re worth it! If the market value of tickets to see a star is extremely high, charge it. If you’re worried about alienating fans, try to beat resellers with paperless ticketing, but don’t just try to capture the spread without clueing in the customer by scalping your own tickets, when the truth outs, and it always does, you’re just pissing people off!
But Mr. Hsieh said that more important than servicing the customer was company culture. People had to want to work at Zappos, they had to enjoy coming to work.
If you think it’s fun being employed by the major label, you don’t work there. Record companies used to be the place to work. Hell, people lived to work at record stores! Now the record store clerk is someone with a blue vest who’s clueless. Come on, would a college graduate, someone who went to Wharton, anywhere other than a bullshit music business college, ever want to work in the music industry?
Let’s face facts. Anybody with any savviness whatsoever is not looking to work at one of the usual suspect companies. People e-mail me all the time, how can I get a job? Why? You’re just telling me you’ve got no gumption, you just want a paycheck, you just want to suck at the tit. You want to work at a record company?
Instead of the best and the brightest, we’re getting the lowest of the low. Instead of Ivy League graduates, we’re getting people who paid a fortune to hear from those without experience what happened yesterday.
Yes, it all comes down to the music. But it’s not like yesteryear, where the music is enough. Not when ticket prices cost as much as a week’s meals, not when selling said music is no longer enough to survive. Our complete business must be realigned!
Record companies suing their customers, to teach them a lesson. Concert promoters selling tickets with enough extra charges in some cases to double the price of a ducat. Acts that are promoted that have the nutritional value of Sugar Pops, and last just as long as a bowl of that cereal. The problem is not purely file-trading. The music business has been driven deep into a hole by sheer greed, a sense of entitlement by not only the executives, but the acts! The old acts wanting to keep their lifestyles and the new acts wanting to replicate them. It would be like a student today saying his desire is to work at AIG. Huh?
You can’t cut corners. Zappos has stock pickers working constantly, as opposed to only when orders come in.
You’ve got to build a relationship with the customer. Rather than trying to sell your product to someone who barely cares, you’ve got to satiate the fan. Especially in an era where you don’t have enough reach to get the attention of those living in the hinterlands, which can even be in the metro area today, but the denizens are too busy doing something else to care!
Sure, people will never stop making music. Sure, there are innovators shaking things up in the underground. But you can’t go to the gig in cyberspace, not in a meaningful way, and the buildings you play all have deals with a ticketing agency that adds extra fees. You’re headed straight for the mines. Not an enticing enterprise for those wanting to test limits, wanting to connect with their fans and not only get them high, on music, but make a difference.
I’d like to tell you Tony Hsieh’s a riveting speaker. But he’s not. Listening to his presentation isn’t quite as boring as high school math, but it gets damn close.
You can check out the podcast here:The accompanying slide show is here:
But I’d recommend watching excerpts on YouTube:
But I’m not sure you’ve got watch or listen whatsoever. You’ve just got to think about your customer and having fun. You’ve got to trust your instincts more than your immediate bottom line. You’ve got to have reasonable values as opposed to operating from pure greed. You’ve got to innovate. The key is not to do it Tony Hsieh’s way, but a new way, your way, that will be just right, that will wow us.
