{"id":1812,"date":"2009-03-27T12:37:27","date_gmt":"2009-03-27T20:37:27","guid":{"rendered":"http:\/\/lefsetz.com\/wordpress\/?p=1812"},"modified":"2009-03-27T12:41:54","modified_gmt":"2009-03-27T20:41:54","slug":"customer-service","status":"publish","type":"post","link":"https:\/\/lefsetz.com\/wordpress\/2009\/03\/27\/customer-service\/","title":{"rendered":"Customer Service"},"content":{"rendered":"<p>I listened to that Zappos presentation online.\u00c2\u00a0 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&#8217;t have people like Tony Hsieh in the music business.\u00c2\u00a0 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?\u00c2\u00a0 What&#8217;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.\u00c2\u00a0 Something that will get you there, but you&#8217;ll never be proud to arrive in.<\/p>\n<p>This lecture took place at SXSW.\u00c2\u00a0 Not at the music festival, that&#8217;s about wannabe bands thinking they&#8217;re going to get noticed the same way these idiots press CDs upon tastemakers in order to make themselves feel good, like they&#8217;re doing something, furthering their careers.\u00c2\u00a0 Rather, Mr. Hsieh&#8217;s presentation took place at the Interactive festival.\u00c2\u00a0 Where a who&#8217;s who of the tech world came to exchange ideas and tweets to the point where their iPhones were unusable, overloading AT&amp;T&#8217;s network.\u00c2\u00a0 That&#8217;s a true story.\u00c2\u00a0 It might have eluded you if you&#8217;re focusing on SoundScan and BDS, but that&#8217;s how news is today.\u00c2\u00a0 Just like music before MTV, certainly before AOR, tech is a cult that the mainstream oftentimes doesn&#8217;t understand, but to those involved, it&#8217;s everything!<\/p>\n<p>If you want to have a fulfilling, enriched life today you don&#8217;t start a band, you start a company!\u00c2\u00a0 Is your desire to date Mariah Carey or have enough money to attract reasonable members of the opposite sex?\u00c2\u00a0 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.\u00c2\u00a0 What do they say, &quot;Innovate or die&quot;?\u00c2\u00a0 Whereas in the music business it&#8217;s &quot;I don&#8217;t hear a single.&quot;<\/p>\n<p>Of course it&#8217;s changing in the music business.\u00c2\u00a0 That&#8217;s what those in power can&#8217;t understand.\u00c2\u00a0 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&#8217;t care about radio, yet unfortunately have to deal with Ticketmaster and Live Nation.\u00c2\u00a0 Bands are doing it for themselves.\u00c2\u00a0 And if you don&#8217;t think this is good, you&#8217;re probably someone who wants to join the military to have someone tell you what to do. Music is art.\u00c2\u00a0 It&#8217;s about creativity.\u00c2\u00a0 It&#8217;s about testing limits.\u00c2\u00a0 If you don&#8217;t have the freedom to do a 180, it doesn&#8217;t work.<\/p>\n<p>Some of the Tony Hsieh&#8217;s of this world tried to function in the music sphere.\u00c2\u00a0 But they found out the rights holders didn&#8217;t want them to, that the rights holders are bullies, beholden to the old ways.\u00c2\u00a0 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.<\/p>\n<p>Mr. Hsieh focused first on customer service.\u00c2\u00a0 That&#8217;s Zappos&#8217; mantra.\u00c2\u00a0 They put their phone number right at the top of their site.\u00c2\u00a0 They want you to call, to establish a bond.\u00c2\u00a0 Their longest customer service call was six hours!\u00c2\u00a0 It&#8217;s not about immediate dollars and cents, it&#8217;s about the long haul relationship.<\/p>\n<p>Which is why Zappos doesn&#8217;t list what it doesn&#8217;t have in stock, it&#8217;s too frustrating for the consumer.\u00c2\u00a0 Which is why Zappos will turn a customer on to product at a competitor&#8217;s site if they don&#8217;t have it in stock themselves.\u00c2\u00a0 Which is why they upgrade shipments to overnight delivery, for free.\u00c2\u00a0 Zappos wants you to feel good about the company, so you wouldn&#8217;t dare going anywhere else.<\/p>\n<p>Compare this to Live Nation.\u00c2\u00a0 Which pisses off each and every customer.\u00c2\u00a0 With all these added fees.\u00c2\u00a0 Live Nation says it&#8217;s got its hands tied.\u00c2\u00a0 Bullshit. Zappos is about repeat customers, it focuses on them, builds on them.\u00c2\u00a0 If the average Live Nation customer goes to a show under two times a year, how can you build a business?\u00c2\u00a0 And believe me, that&#8217;s the reality, Rapino utters this statistic again and again.<\/p>\n<p>Sure, the superstars might rape Live Nation in a deal, but how about the beginning acts?\u00c2\u00a0 How about all-in ticketing for beginning acts?\u00c2\u00a0 How about free parking?\u00c2\u00a0 How about discount food?<\/p>\n<p>The future of Live Nation is new acts, which the company itself must develop.\u00c2\u00a0 The major labels aren&#8217;t gonna develop them, they&#8217;re going to turn into licensing houses for their catalog, they&#8217;re going to develop one hit wonders, who can sell tickets briefly, if at all.\u00c2\u00a0 Live Nation isn&#8217;t in business with Doug Morris, but the kid on the street, with the new band, that&#8217;s got a new manager, who hopefully will tell his agent to partner with the promoter, for the benefit of everybody involved.<\/p>\n<p>The Eagles and the Stones are not going to tour forever.\u00c2\u00a0 The classic rock acts are in their sunset years.\u00c2\u00a0 What is Live Nation&#8217;s plan for the future?\u00c2\u00a0 The same one the major labels had to deal with Napster?\u00c2\u00a0 We can see the future coming.\u00c2\u00a0 Niche acts, developed online.\u00c2\u00a0 How does Live Nation insure it survives?<\/p>\n<p>By merging with Ticketmaster, the most hated corporation on the planet.\u00c2\u00a0 Sure, we insiders know that Ticketmaster is just a front for the acts, but is this good for business?\u00c2\u00a0 Why can&#8217;t the industry get its house in order, why can&#8217;t there be all-in ticketing, doesn&#8217;t this added fee chaos hurt everybody?<\/p>\n<p>Stunningly, the prices at Zappos are not cheap.\u00c2\u00a0 I checked a pair of Nikes with the same shoes on the manufacturer&#8217;s site.\u00c2\u00a0 Nike itself was selling them cheaper!\u00c2\u00a0 But people go to Zappos for the service.\u00c2\u00a0 People will pay $1000 to Bon Jovi to sit in the first row, they think it&#8217;s worth it.\u00c2\u00a0 But no, Jon&#8217;s got to employ subterfuge, he&#8217;s got to sell those tickets on TicketExchange, so he doesn&#8217;t look greedy.\u00c2\u00a0 When you go to buy a BMW, do they bait and switch you? No, BMWs are expensive!\u00c2\u00a0 But the customer believes that they&#8217;re worth it!\u00c2\u00a0 If the market value of tickets to see a star is extremely high, charge it.\u00c2\u00a0 If you&#8217;re worried about alienating fans, try to beat resellers with paperless ticketing, but don&#8217;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&#8217;re just pissing people off!<\/p>\n<p>But Mr. Hsieh said that more important than servicing the customer was company culture.\u00c2\u00a0 People had to want to work at Zappos, they had to enjoy coming to work.<\/p>\n<p>If you think it&#8217;s fun being employed by the major label, you don&#8217;t work there.\u00c2\u00a0 Record companies used to be the place to work.\u00c2\u00a0 Hell, people lived to work at record stores!\u00c2\u00a0 Now the record store clerk is someone with a blue vest who&#8217;s clueless.\u00c2\u00a0 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?<\/p>\n<p>Let&#8217;s face facts.\u00c2\u00a0 Anybody with any savviness whatsoever is not looking to work at one of the usual suspect companies.\u00c2\u00a0 People e-mail me all the time, how can I get a job?\u00c2\u00a0 Why?\u00c2\u00a0 You&#8217;re just telling me you&#8217;ve got no gumption, you just want a paycheck, you just want to suck at the tit.\u00c2\u00a0 You want to work at a record company?<\/p>\n<p>Instead of the best and the brightest, we&#8217;re getting the lowest of the low.\u00c2\u00a0 Instead of Ivy League graduates, we&#8217;re getting people who paid a fortune to hear from those without experience what happened yesterday.<\/p>\n<p>Yes, it all comes down to the music.\u00c2\u00a0 But it&#8217;s not like yesteryear, where the music is enough.\u00c2\u00a0 Not when ticket prices cost as much as a week&#8217;s meals, not when selling said music is no longer enough to survive.\u00c2\u00a0 Our complete business must be realigned!<\/p>\n<p>Record companies suing their customers, to teach them a lesson.\u00c2\u00a0 Concert promoters selling tickets with enough extra charges in some cases to double the price of a ducat.\u00c2\u00a0 Acts that are promoted that have the nutritional value of Sugar Pops, and last just as long as a bowl of that cereal.\u00c2\u00a0 The problem is not purely file-trading.\u00c2\u00a0 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.\u00c2\u00a0 It would be like a student today saying his desire is to work at AIG. Huh?<\/p>\n<p>You can&#8217;t cut corners.\u00c2\u00a0 Zappos has stock pickers working constantly, as opposed to only when orders come in.<\/p>\n<p>You&#8217;ve got to build a relationship with the customer.\u00c2\u00a0 Rather than trying to sell your product to someone who barely cares, you&#8217;ve got to satiate the fan. Especially in an era where you don&#8217;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!<\/p>\n<p>Sure, people will never stop making music.\u00c2\u00a0 Sure, there are innovators shaking things up in the underground.\u00c2\u00a0 But you can&#8217;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.\u00c2\u00a0 You&#8217;re headed straight for the mines.\u00c2\u00a0 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.<\/p>\n<p>I&#8217;d like to tell you Tony Hsieh&#8217;s a riveting speaker.\u00c2\u00a0 But he&#8217;s not.\u00c2\u00a0 Listening to his presentation isn&#8217;t quite as boring as high school math, but it gets damn close.<\/p>\n<blockquote style=\"margin-right: 0px;\" dir=\"ltr\">\n<div style=\"margin-left: 40px;\">You can check out the podcast here: <\/p>\n<p><a title=\"SXSW podcast\" target=\"_blank\" href=\"http:\/\/audio.sxsw.com\/2009\/podcasts\/D2%20SXSW_PODCASTS\/031409_PM1_BallA_OpeningRemarks_Simul.mp3\">SXSW podcast<\/a><\/p>\n<p>The accompanying slide show is here:<\/p>\n<p><a title=\"Zappos Slideshow\" target=\"_blank\" href=\"http:\/\/www.slideshare.net\/zappos\/zappos-sxsw-31409\">Zappos Slideshow<\/a><\/p>\n<p>But I&#8217;d recommend watching excerpts on YouTube:<\/p>\n<p><a title=\"SXSW 2009 - Opening Remarks: Tony Hsieh pt.1\" target=\"_blank\" href=\"http:\/\/www.youtube.com\/watch?v=63WFjoFiXns\">SXSW 2009 &#8211; Opening Remarks: Tony Hsieh pt.1<\/a><\/p>\n<p><a title=\"SXSW 2009 - Opening Remarks: Tony Hsieh pt.2\" target=\"_blank\" href=\"http:\/\/www.youtube.com\/watch?v=BP6a2SHb0b4\">SXSW 2009 &#8211; Opening Remarks: Tony Hsieh pt.2<\/a><\/div>\n<\/blockquote>\n<p>But I&#8217;m not sure you&#8217;ve got watch or listen whatsoever.\u00c2\u00a0 You&#8217;ve just got to think about your customer and having fun.\u00c2\u00a0 You&#8217;ve got to trust your instincts more than your immediate bottom line.\u00c2\u00a0 You&#8217;ve got to have reasonable values as opposed to operating from pure greed.\u00c2\u00a0 You&#8217;ve got to innovate.\u00c2\u00a0 The key is not to do it Tony Hsieh&#8217;s way, but a new way, your way, that will be just right, that will wow us.<\/p>\n<p><\/p>","protected":false},"excerpt":{"rendered":"<p>I listened to that Zappos presentation online.\u00c2\u00a0 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&#8217;t have people like Tony Hsieh in the music business.\u00c2\u00a0 Who in their right mind would want to go to work in the music [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[2],"tags":[],"class_list":["post-1812","post","type-post","status-publish","format-standard","hentry","category-music-business"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p96vPs-te","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/1812","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/comments?post=1812"}],"version-history":[{"count":3,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/1812\/revisions"}],"predecessor-version":[{"id":1814,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/1812\/revisions\/1814"}],"wp:attachment":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/media?parent=1812"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/categories?post=1812"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/tags?post=1812"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}