I’ve just finished re-reading one of my favourite business books of all time – Delivering Happiness by Tony Hsieh (pictured below). For those of you who don’t know, which I suspect is most people, Tony is an internet entrepreneur and venture capitalist who made a fortune selling an online advertising platform to Microsoft in the first dot com boom.
He needn’t have worked again and went on to found an investment firm backing tech startups including Zappos an online shoe selling business which he believed in so much he dropped everything else to run it. At the time there was scepticism that many people would order shoes they couldn’t try on but when revenues reached $1 billion a year and the company was acquired by Amazon for $1.2 billion there was no doubt that he was right.
What makes Tony’s story resonate with those of us who run businesses is his single-minded obsession with providing the best customer service and belief that this must be delivered by everyone in the company. After spending some time at Microsoft he also came to the realisation that what made him happy was to go to work with people he regarded as friends and build a culture at the workplace where everyone wanted to be there and enjoyed their day. This has always been my philosophy and I regard my team as great personal friends. We frequently go out together and celebrate and support each other through marriages, births and bereavements, and everything else life throws at us like an extended family.
My very favourite of all Zappos’ unique concepts and the one that causes the most debate is that all new employees are offered $2,000 to leave at any time during their initial training. When I first heard this it made my head reel – surely people would take advantage and the company would lose a fortune?
Turns out that only 2-3% of hires take up the offer and the more I think about it the more I realise that it is absolute genius and probably makes even more sense in stiff upper lip Britain. If a new job or company is not for you in all honesty it will probably be apparent after a week or two. Being British the chances are you’ll soldier on to try and make a proper go of it and then admit defeat and spend a month or two looking for something else, sneaking off for interviews and doing the minimum at work. All of this is hugely expensive to the employer who invests in training and is paying an underperforming employee then ends up having to start again.
Tony actually thought not enough people were taking up the offer so he doubled it to $4,000 but it barely moved the needle with take up rates staying around 3%.
So apart from being an interesting anecdote what does it have to do with being a holiday home owner or running a holiday agency? Well let me tell you a story:
Owners of holiday homes have been on the end of a very aggressive marketing campaign from a big national chain. I won’t say which one but they have obviously got a bit of a chip on their shoulder and must be feeling pretty blue about the results. Using the masses of personal data now in the public domain or available to buy they have been finding out the home addresses of our clients and sending them personal letters promising hugely ambitious rental returns plus a joining bonus of £500.
Many owners sent these to us so we knew what was going on and some of them were quite agitated saying whilst they wouldn’t move they were worried we would lose owners and it would affect the business. My first reaction was to feel a bit affronted however all’s fair in love, war & business. Very quickly though I realised that this was absolutely brilliant – what they were doing was performing the Zappos test on our behalf and paying for it!
We are a full service agency and our relationship with owners is much deeper than a directory sending bookings – we organise the cleaning, linen and maintenance, advise on renovations and live through births, deaths and marriages with our owners just like I do with my team. Many have become personal friends over the years and my waistline is constantly expanded by lots of drinks and dinners when our clients are staying in their property.
If £500 is enough to make an owner jump ship to a big national then the truth is it’s probably best for both of us if they go and I’m delighted that I don’t even have to pay it.
You’re probably curious as to how many owners we lost to this impressive and sophisticated marketing effort? The answer of course is none at all and although it would have been the right thing, I’d have been deeply disappointed if a client valued our services so little.
Out of interest I’d love to know what it would take for people to move in the other direction – If you’re with a big national would you move for a monkey? A grand? Or even an Archer? (‘A whole Jeffrey that’s £2,000’ Alan B’Stard, New Statesman)
Let me know by email or call for a chat anytime – I’m either sleeping or working!
Simon Tolson owns Rumsey Holiday Homes in Sandbanks and a portfolio of holiday cottage agencies in Cornwall.
Contact Simon on:
t. 01202 707 357
a. 2 Banks Road, Sandbanks, Poole, Dorset BH13 7QD