July 17, 2017

Customer Experience Lessons from Amazon

“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”  –Jeff Bezos (Founder & CEO at Amazon)

Even if you haven’t purchased something through the e-commerce giant, you have most likely heard about Amazon in the news, seen their advertisements across your social media platforms, or received a gift that was ordered through their website.  Some may argue that Amazon is taking over the world, but I digress.  What did it take Jeff Bezos and his team to get to the point of being an internationally recognized e-commerce giant and one-stop-shop for customers?  The answer:  Meaningful Customer Experiences.

Amazon started in 1994 under the premise of being the earth’s largest bookstore.  They quickly expanded into other product categories (e.g., music, toys, electronics, apparel, food, etc.) and into the international market.  Amazon’s early success was in part because of their extremely short operating cycle compared to competitors, as well as their ability to bring buyers and sellers together on their website.

Amazon, like many other successful tech companies over the past couple of decades (e.g., Facebook, Uber, eBay, Google, etc.) is a shining example of an MSP (or Multi-Side Platform).  They bring two parties together (i.e., buyers and sellers) to facilitate an interaction.  Much of Amazon’s early efforts were meant to sway network effects in their favor and Bezos understood it was more important to be the adopted solution, than the best solution.  They invested heavily in their technology infrastructure to better serve their customers, used their buying power leverage to lower prices, and they stayed true to Bezos’ vision of being a place where people can find and discover anything they might want to buy online.  Amazon purposefully built meaningful customer experiences to increase adoption and garner loyalty to the brand—it has paid off so far as their market value has grown to over $430 billion.

Becoming the “Amazon of your industry” overnight may not be feasible, but there are a handful of customer experience lessons from Amazon that your organization may want to consider.

  1. Identify your customer experience goals and build a culture around them. As I mentioned above, Bezos wanted Amazon to be a place where people could find and discover anything they wanted to buy—a one-stop-shop if you will.  He believed the key dimensions that define the customer experience are 1) selection, 2) price, and 3) convenience.  He built a company with customer experience as part of its core, and as a result, Amazon has become an innovator in the industry that constantly adapts to meet the needs of its customers.  Consider: So, what are your customer experience goals?  How is your organization/department/team serving those goals?  You should have a clear direction and understanding of your customers before you begin building business practices and marketing efforts aimed at enhancing the experience. <br>
  2. Listen to your customers and meet them where they are at. Amazon didn’t always have it figured out.  In the early days, they struggled to serve their two different customer bases:  buyers and 3rd party sellers.  For example, they started by listing Amazon owned products and 3rd party retailer products separate via their online “tabs” (e.g., zShops, Auctions, etc.).  Sellers were frustrated because they wanted access to Amazon’s demand (i.e., large customer base) and buyers were frustrated because they wanted access to product variety.  Amazon listened to their needs and moved to a “single-store” strategy that provided a more integrated and simplified solution for both buyers and sellers.  Because adoption is essential to their MSP business model, Amazon has continued to listen to their customers’ needs, test new solutions, and adapt as needed.  Amazon now has multiple offerings for sellers (ranging from running store websites to operating all aspects of product development and operations), multiple offerings for buyers (ex., Amazon Prime), and interact with customers through several channels (e.g., web, social, mobile app, etc.).  Consider: In today’s fast-paced marketing world where customers demand more personalized experiences and omni-channel interactions are essential, the most successful companies will be the ones who engage with their customers in all stages of the experience journey and who are able to adapt to changing needs.  Building meaningful experiences and loyalty takes time, but it starts with listening to your customers and understating what they really need.
  3. Invest in technology, data, and infrastructure to support the customer. This factor has been a key element in Amazon’s success.  They made significant technology investments in their website, e-commerce infrastructure, and database early on to 1) build economies of scale, 2) walk down the learning curve to make it extremely difficult for competitors to enter, and perhaps most importantly, 3) have the tools and ability to meet customer experience needs.  In fact, Amazon was one of the first companies to embrace personalization, provide recommendations based on purchasing history, save customer info for ease of access, and patent one-click buying for customer convenience.  Their technology and data, in addition to customer experience business strategy, is what truly makes Amazon a powerhouse.  Consider: What technology capabilities does your organization use to support the customer experience?  Are your technologies seamlessly integrated to deliver a consistent and meaningful experience to your customer segments?  There are over 5000 solutions in the marketing technology space—a number that will continue to grow exponentially.  Navigating the space is difficult and technologies are often implemented without taking into consideration your business goals.  Luckily, our team at Covalent has experience across multiple solutions and can help you navigate the chaos.
  4. Leverage data to enhance the customer experience. Amazon has approached their business in a scientific way since day one–every transaction is recorded, every buyer is profiled, every inventory movement is known, and even more importantly, every possible next order can be suggested based on each visitor’s purchasing and browsing history. A major differentiator for Amazon compared to traditional retailers (and most other businesses) is the sheer magnitude and power of their data—they believe that all data must be collected, analyzed, and used.  Beyond that, Amazon relentlessly tests and leverages their mass amount of data to improve the experience by providing recommendations, personalizing interactions, and engaging with customers across channels.  Consider: Is your organization realizing the full value of its data?  Are you collecting the right data?   Do you have the technology in place to do both things?  Your organization’s ability to leverage data to build meaningful experiences will increasingly become the #1 factor that separates successful companies like Amazon from companies that become stagnant and inevitably die out.

The future of Amazon will be full of surprises and they will continue to grow and adapt in ways that support the customer experience.  From Amazon’s announcement to buy Whole Foods (introducing them to a trove of new data) and their continued growth of Amazon Web Services (AWS), to drone patents and the introduction of the Amazon Go Beta program, maybe Amazon really is taking over the world (a topic for another time).

Although I have never worked with Amazon directly, I do admire their ability to create a business around the customer.  Take a lesson from Amazon and commit your organization to building meaningful customer experiences.  Our team at Covalent has decades of expertise working with companies to enhance the customer experience by building business processes and implementing technologies that support each stage of the customer journey.  Interested in discussing your customer experience goals?  Contact us here to keep the dialogue going.