When you think of shopping online, chances are good that you think first of Amazon. The online pioneer first opened its virtual doors in 1995, selling books out of founder Jeff Bezos’s garage in suburban Seattle. Amazon still sells books—lots and lots of books. But it now sells just about everything else as well, from music, electronics, tools, housewares, apparel, and groceries to loose diamonds and Maine lobsters.
From the start, Amazon has grown explosively. On a past holiday season, at one point, Amazon.com’s more than 173 million active customers worldwide were purchasing 110 items per second. What has made Amazon such an amazing success story? Founder and CEO Bezos puts it in three simple words: “Obsess over customers.”
To its core, the company is relentlessly customer driven. “The thing that drives everything is creating genuine value for customers,” says Bezos. Amazon believes that if it does what’s good for customers, profits will follow. So the company starts with the customer and works backward. Rather than asking what it can do with its current capabilities, Amazon first asks Who are our customers? What do they need? Then, it develops whatever capabilities are required to meet those customer needs. At Amazon, such words are more than just “customerspeak.” Every decision is made with an eye toward improving the Amazon.com customer experience. In fact, at many Amazon meetings, the most influential figure in the room is “the empty chair” – literally an empty chair at the table that represents the BMM important customer. At times, the empty chair isn’t empty, but is occupied by a “Customer Experience Bar Raiser,” an employee who is specially trained to represent customers’ interests. To give the empty chair a loud, clear voice, Amazon relentlessly tracks performance against nearly 400 measurable customer related goals.
Amazon’s obsession with serving the needs of its customers drives the company to take risks and innovate in ways that other companies don’t. For example, when it noted that its book buying customers needed better access to e-books and other digital content, Amazon developed the Kindle e-reader, its first ever original product. Then Kindle took more than four years and a whole new set of skills to devlelop. But Amazon’s start-with-the-customer thinking paid off handsomely. The Kindle is now the company’s number one selling product, and Amazon.com now sells more e-books than hardcovers and paperbacks combined. Thus, what started as an effort to improve the customer experience now gives Amazon a powerful presence in the burgeoning world of digital media. Not only does the Kindle allow access to e-books, music, videos, and apps sold by Amazon, it makes interacting with the online giant easier than ever.
Perhaps more important than what Amazon sells is how it sells. Amazon wants to deliver a special experience to every customer. Most Amazon.com regulars feel a surprisingly strong relationship with the company, especially given the almost complete lack of actual human interaction. Amazon obsesses over making each customer’s experience uniquely personal. For example, the Amazon.com site greets customers with their very own person- alized home pages, and its “Recommendations for You” feature offers personalized product recommendations. Amazon was the first company to use “collaborative filtering” technology, which sifts through each customer’s past purchases and the purchasing patterns of customers with similar profiles to come up with personalized site content. Amazon wants to personalized site content. Amazon wants to personalize the shop- ping experience for each individual customer. If it has 173 million customers, it reasons, it should have 173 million stores.
Visitors to Amazon.com receive a unique blend of benefits: huge selection, good value, low prices, and convenience. But it’s the “discovery” factor that makes the buying experience really special. Once on the Amazon.com site, you’re compelled to stay for a while – looking, learning, and discovering. Amazon.com has become a kind of online community in which customers can browse for products, research purchase alternatives, share opinions and reviews with other visitors, and chat online with authors and experts. In this way, Amazon does much more than just sell goods online. It creates direct, personalized customer relationships and satisfying online experiences. Year after year, Amazon places at or near the top of almost every customer satisfaction ranking, regardless of industry.
To create even greater selection and discovery for customers, Amazon long ago began allowing competing retailers – from mon-and-pop operations to Marks & Spencer department stores – to offer their products on Amazon.com, creating a vir- tual shopping mall of incredible proportions. It even encourages customers to sell used items on the site. And with the recent launch of AmazonSupply.com, the online seller now courts business and industrial customers with products ranging from office supplies to radiation detectors and industrial cutting tools. The broader selection attracts more customers, and everyone benefits. “We are becoming increasingly important in the lives of our customers,” says an Amazon marketing executive.
Whatever the eventual outcome, Amazon has become the poster child for companies that are obsessively and successfully focused on delivering customer value. Jeff Bezos has known from the very start that if Amazon creates superior value for customers, it will earn their business in return, and if it earns their business, success will follow in terms of company profits and returns.
Source: Principles of Marketing Global, 15th Edition – Philip Kotler, Gary Armstrong
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