“The second program is called Pay to Quit. It was invented by the clever people at Zappos, and the Amazon fulfillment centers have been iterating on it. Pay to Quit is pretty simple. Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. The headline on the offer is “Please Don’t Take This Offer.” We hope they don’t take the offer; we want them to stay. Why do we make this offer? The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.” — Jeff Bezos (excerpted from a recent shareholder letter)
For the last year I’ve been talking about happiness and culture as strategic advantages. In my training classes I frequently reference Shawn Achor’s book The Happiness Advantage and share the incredible story of how Zappos became a billion dollar company by creating a world-class culture (Tony Hsieh recounts the transformation in his book Delivering Happiness). Two days ago Amazon released its shareholder letter and formally announced their extended version of the employee pay-off program that Zappos pioneered. Simple idea: If you’re unhappy working at Amazon then please take a $5000 check and quit. No hard feelings.
When I talk about things like happiness and culture in a sales training class a lot of people smile and nod. A few take notes. Most don’t do much with it. Yet if there’s something to learn from Amazon and Zappos it is that organizational happiness is a sales strategy–perhaps the most effective in today’s point-and-click market. Given the level of product and service parity that is occurring why would a customer tolerate a difficult or unsatisfactory service experience? They won’t. They don’t have to. They’ll buy the product elsewhere.
Bezos’ letter as well as Zappos successful track record with their pay-to-quit program illustrates an organizational attitude toward “selling” in an experience economy. The attitude is simple: ONE bad customer service experience is unacceptable. ONE unhappy employee will cause far more than $5000 damage to a company’s brand. ONE dissatisfied customer will load both barrels and blast negative reviews among her peers, inside her network, and on review sites that are visible to anyone. A company can only sustain this for so long. In our industry lost customers, lost sales, bad word-of-mouth and the like are only repaired with more marketing dollars (got to make the phone ring somehow right?). Yet I rarely meet a business owner who elects to invest the marketing and advertising budget in to the customer experience rather than expensive outbound lead generation.
The “thing” that Amazon understands, that Zappos understands, that Costco understands, that Whole Foods understands, that Apple understands is that Culture is a core value. Happiness is a core value. And ultimately it’s employees who create culture on a customer-by-customer basis. Exciting, fun, joyful cultures are a delight to work with and that type of outcome will only happen by investing in team members who have a passion for putting smiles on customer’s faces. It will only happen by investing in the customer experience and not the next cold lead.
I can hear the industry naysayers: “We can’t do what Amazon does because we can’t afford to let people go. Not that many people want to work in the heating and air conditioning trade.” To an extent that’s true. But it’s not because of wages. According to CNN the average wage of an Amazon production working is $13.50/hr. It’s not about the money. The reason that the HVAC industry has a hard time finding and retaining amazing talent is that the majority of HVAC companies just aren’t that inspiring or enjoyable to work for. Bitter pill. Positive and happy company cultures are magnetic. People want to work for companies that have unique employee-centric cultures. I”ll make the case that an HVAC company with a Zappos-esque culture will rarely lack for eager applicants.
Culture is a strategic advantage. Happy employees. A clear purpose. Engaging core values. Meaningful experiences. Owners and managers who invest in and empower their teams. Employees who truly thrive and contribute. These are the new standards by which the best companies find great people, retain them, and deliver an incredible experience. As Tony Hsieh remarked: “Businesses often forget about culture, and ultimately, they suffer for it because you can’t deliver good services from unhappy employees.”