A. Lauren Abele

Last week’s Economist featured a story about Tony Hsieh,  the CEO of Zappos, and the quirky Zappos empire which appears to be weathering the recession with style. While the exact reasons for its success are beyond the scope of this article and this post, there are some interesting elements to the Zappos story. First: Zappos mission is unparalleled customer service. Second: Zappos prides itself on being unconventional. Third: Zappos employs some basic economic principles in nontraditional ways.

Zappos.com is an  internet retail site most widely known for selling a wide variety of shoes, but has expanded to include accessories and bags.  You may ask, “Why is customer service important if all people have to do is surf the internet and enter their credit card information to make a purchase?” Beacuse customer service is always important–and Tony Hsieh knows that. Interestingly, customer service is one of the first things businesses are encouraged to focus on during a recession (See this MSNBC article).

Known for its unconventional and maybe at times quixotic office culture–Zappos strives to “‘create fun and a little weirdness.’” (See the rest of their Core Values.) “Zapponians” (the affectionate term for Zappos employees) even publish an annual Culture Book, explaining what Zappos culture means to them. The Culture Book provides qualitative, subjective information about the Zappos company–and, it is written by Zappos employees. A recent post in the Zappos blog advertises that the next Zappos Culture Book will feature submissions from customers as well. What is the value added of this publication? It gives employees (and now customers) a voice, adds value to their input, increases transparency, and provides a positive and fun qualitative analysis of how the company is operating.

Zappos’ zany office culture extends into its hiring practices.  A hiring policy mentioned in The Economist article that I found particularly interesting was:

[I]n their first weeks with the company, new employees are offered $2,000 to quit—a significant sum for call-centre trainees who start on $11 per hour.

That is a significant sum! But, more interestingly,  is employing basic economic principles in nontraditional ways and means two things: (1) In offering the money, Zappos really doesn’t want people working there who don’t want to be. And, (2) in forgoing the money, new hires (at least call-center trainees) demonstrate that they would rather work for free for over a month (at $11 per hour and 40 hour weeks, monthly salary before taxes is $1,760) than give up their job at Zappos. This begins to outline a quantifiable reservation price for employment at Zappos and serves as  a nice psychological reminder to employees that they are financially invested in their career at the company.

Is this off-the-wall approach successful? It sounds like it:

Last year it [Zappos.com] rang up a record $1 billion in sales even as other retailers were struggling.

Also,  Tony Hsieh twitters! As of right this second he has 519,390 followers, and uses this social media tool to educate others about his company’s unusual practices, increase corporate transparency, and give his employees a voice.  Follow him here.

Yesterday I attended the Go Green Expo, which is a trade show for environmental products and services, held (as of right now) in four cities across the country–NYC, LA, Philadelphia, and Atlanta. I met some pretty interesting people, doing pretty interesting stuff–but overall felt as though there was something missing…in any event, I will definitely try to go back next year.

One thing I found particularly interesting was the expo check-in and registration. My friend and I arrived at the check-in, and the woman behind the counter told us: “You can get in free today [the tickets were $10].” Pause. My friend and I look at each other, nodding in agreement and thinking, “Good,” because we each just bought $4 lattes at Starbucks. The woman behind the counter continues: “You can get in free today if you sign up for ConEdison’s Wind Power Program.”

ConEdison Solutions provides options for their residential and business customers to use “green” energy sources for their electricity, including their GREEN and WIND power programs. Their website says that:

WIND Power is composed of electricity exclusively generated from 100% wind power…. WIND Power is an additional 2.5 cents per kilowatt-hour (kWh) more than our standard offer.

Ostensibly the $10 increase in my monthly electric bill from switching to all-wind power would have covered by my waived $10 entrance fee–which, in my opinion is a pretty good deal. But, I’m not one to sign up for things willy-nilly on the street. I’m a little bit too distrustful of things that sound too good to be true….

….which is interesting, because I am in the business of “too good to be true.” A regular issue at my job is convincing small business owners that the services offered by the nonprofit organization I work for are free. However, usually this sounds “too good to be true” and capturing a client-base is difficult without establishing trust. And “trust,” in my experience, means different things to different people; but, as a general rule means not asking for something at the beginning of your relationship. What ConEdison’s WIND team had accomplished by positioning themselves at the registration booth of the Go Green Expo with a deal that sounded really good, is really creative. What a great way to introduce people to your service, and maybe even sign them up to participate. What is a little confusing to me is why I strolled by, unmoved by this proposition, when (a) I do care about the environment and (b) I do offer services that sound “too go to be true” (even though they are true) and understand this dynamic all too well. ConEdison made helping the environment very easy…why didn’t I take the bait? I should be their easiest target, the lowest hanging fruit.

Last week  I came across a New York Times article, Seeking to End World Hunger, One Search at a Time, which described the creation of Hoongle. Hoongle.org is “a custom Google search engine that promises to donate 20 grains of rice per search to schools in the developing world.” This sounds very interesting, and very easy. Unlike its predecessors, Hoongle.org is not based on gimmicks (I’m liking it) and you don’t have to pay (liking it even more) or sign up for anything (fine! I’ll take the bait!).

So, in an experiment to convert myself over to a new social venture (since I had at least temporarily bypassed ConEd), I went on Hoongle.org today, only to find that the site is offline due to heavy traffic. Aha! Too good to be true! This fits the expected outcome that things that are “too good to be true” usually are.  Consumers expect lower quality service, high payments, traps, contracts that you cannot get out of, and other negative side effects of electing products and services that are “too good to be true.” What does this mean for social enterprises?

Despite some obvious growing pains, people will keep finding creative ways to turn our everyday practices into social ventures. The main issue will be convincing the public (myself included) that things that sound “too good to be true” can still be true.  This is a marketing issue.

Plain and simple: people distrust things that sound “too good to be true”. So, social enterprises can either (a) focus on developing relationships with their potential clients  or (b) avoid marketing their products/services as ”too good to be true”. Take ConEdison, for example: Firstly, I am already their client, but my relationship with them is paying montly electric bills. We aren’t close friends and I don’t actually like paying bills. I am not going to do something just because ConEdison tells me to. Secondly, the idea of switching from a traditional electrical supply to 100% windpower with only a minimal increase in my bill just sounds “too good to be true” and way too easy to participate in, even if it is.

ConEdison does a good job of changing their public perception by participating in a number of green events and getting their name out to the green community. The Go Green Expo was the second time I’ve been approached by a ConEd WIND Power representative, and I am definitely more likely to sign up this time than I was the first time.  However, toning down their ”too good to be true” marketing scheme is probably something they could work on.  Green-washed cause marketing is rampant and educated social consumers want to make sure that they are investing in the real deal, even if it isn’t perfect…. yet.

I am about 3 seasons behind on House MD, so I am not too devasted by the news that Kal Penn’s character got killed off.  However, as an interesting follow-up to my last post…even actors are putting away their head shots and saying goodbye to craft service (at least temporarily) in order to dedicate themselves to public affairs in our changing economy.

Following his character’s recent suicide, Kal Penn will now be serving as the associate director in the White House Office of Public Liaison. This is a confluence of two topics I find particularly interesting: (1) the growing popularity of public issues in society and (2) the growing savvy of public institutions in their marketing. Kal Penn is a brand. That is why there is no shortage of news articles about his recent career change punning on ”Harold and Kumar.” He is a pop-culture icon for a younger generation–and he will be able to reach out to an audience which may otherwise either have no interest in or feel unconnnected to Capitol Hill. People may think its ridiculous that an actor is in the White House, it may also be rather brilliant.

More info on Kal Penn’s departure? Check out this Washington Post article.

A New York Times article, “With Finance Disgraced, Which Career Will Be King?” discusses the  increasing popularity of public policy as a career choice in the wake of Wall Street’s demise. This is particularly interesting to me, as I went to school for public policy. . .only (apparently) before this was trendy.

The article points out how America’s “top talent”–once attracted to the prestige and lifestyle awarded by the finance sector–are now looking to alternative careers:

At Harvard, for example, about 40 percent of undergraduates in recent years went into the most lucrative corporate arenas like finance and consulting, based on surveys at the school year’s end. “That certainly won’t be the case this year,” observed Lawrence Katz, a professor and labor economist who has studied undergraduate career choices at Harvard going back to the 1960s. “We’re seeing students who would have been part of the Ivy League pipeline to Wall Street in the past considering very different career paths.”

Additionally, Schools of Public Affairs and Administration–which include my alma mater–have seen an 82% increase in applications in 2008/9.  Is this directly linked with economic recession? Unclear. What is clear, however, is that a shift is occuring and the public sector will likely benefit.

A MSNBC article, “Jobless turn to pink slip parties for networking”, discusses how the growing pink-slip population is finding creative solutions to addressing their unemployed status. “Pink slip parties”–such as those hosted by an NYC Meetup group–offer an opportunity for employed professionals to network and meet recruiters. Which sounds great, except that the ratio of unemployed professionals to recruiters can’t be particularly favorable. This dynamic has left many unemployed professionals (obviously) absolutely desperate for work:

“Places have hiring freezes. And they have cutbacks. And they have layoffs. There are a lot more people in the job market,” said 32-year-old Ana Arrendell, who has been searching for work since August.

At first, she was looking only for a job in her field, graphic design. But as the months have gone by, Arrendell has lowered her expectations. “RIght now, I’ll take anything,” she said Friday as she left a New York City-run office that offers resume-writing assistance and interview training.

But, do desperate times call for desperate measures? Unfortunately, the rule of thumb here generally is, yes. However, its important to keep in mind that desperate doesn’t just mean giving up the things you want, it can also mean getting creative–which is exactly what Pink Slip Parties demonstrate.  What is most interesting about these events is that it shows how people are creatively finding new solutions to a tough situation–one that has pushed most people well beyond their comfort zones.