How you can learn from Amazon’s relentless customer-centric focus
It’s an online store that offers products from third-party retailers around the globe. It’s a shipping company that hires contract drivers to deliver packages to homes. It’s a grocery store chain focused on fresh, organic produce and healthy options. It’s a technology company that embraces drones, smartphones and streaming video. It’s a membership service that provides subscribers with top notch customer service, feedback, reviews and perks.
It is, of course, Amazon – the ever-evolving, ever-expanding, never-resting-on-its laurels company that has changed the way companies across the globe, in all sectors, think about how they approach business.
Since its founding in 1994 – one year before eBay and four years before Google – Amazon has been intently focused on one thing: Its customers. Amazon’s customer-first approach has allowed it to be a disrupter in the global retail marketplace.
As Tim Ronaldson explains, though, it’s not just the company’s “focus” on the customer that has been important for Amazon. As Jeff Bezos, the founder and chief executive officer, alluded to in Amazon’s 2017 Letter to Shareholders, it’s more about anticipating what the customer will want in the future rather than simply satisfying what they know they want now.
“One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary.’ I see that cycle of improvement happening at a faster rate than ever before,” Bezos wrote.
“It may be because customers have such easy access to more information than ever before – in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether something’s in stock, find out how fast it will ship or be available for pick-up, and more. These examples are from retail, but I sense that the same customer
empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.”
The Vision Bezos Had for Amazon
Nearly 30 years ago, Bezos had a vision about how he would build Amazon into the global giant it is today. In his 1997 Letter to Shareholders, he hinted at Amazon’s business model – “in my view, obsessive customer focus is by far the most protective of Day 1 vitality.”
According to Tim Ronaldson, that focus has enabled Amazon to constantly build on its success as an online retailer and enter into new markets, diversifying itself and significantly boosting other small businesses along the way. In early May, Amazon released its first Small Business Impact Report, which found, among other noteworthy items, that half the items purchased on Amazon come from small- and medium-sized businesses, with 20,000 of these businesses worldwide surpassing $1 million in sales in 2017, creating 900,000 jobs worldwide in the process.
Today, Amazon is known for so much more than online retail. Its membership service, Amazon Prime, began as a way to get free two-day shipping on most items purchased on Amazon and was targeted to the site’s high-frequency shoppers. Now, a subscription gives added benefits of access to Prime streaming videos and preferred pricing in Amazon’s book stores. The company announced recently that it has more than 100 million Amazon Prime members; at $99 per year in the U.S., and soon to be $119, that’s, well, quite a few truck loads of revenue.
In August 2017, Amazon purchased Whole Foods for $13.7 billion and immediately began making changes – cutting costs, selling Amazon tech wares in store, implementing Amazon Prime as the store’s loyalty discount program and testing free two-hour delivery of groceries. Amazon is also expanding its experimental Amazon Go stores to Chicago and San Francisco, with their high tech monitoring and checkout systems where customers can shop freely and “check out” without the need to scan bar codes.
Tim Ronaldson points out that other companies have taken notice to all Amazon is doing and are trying to implement some of Amazon’s features and perks into their own models. Walmart is now offering free two-day shipping, and you don’t even have to be a subscriber to a special program to get the perk; you do, however, need to order at least $35
in goods to get the free shipping. It’s a new strategy for Walmart after its ShippingPass – a $50 per year membership service – couldn’t compete with Amazon Prime since all it provided was the free shipping.
The Lessons Amazon Can Teach Us
It’s a lot to digest how Amazon got where it is today, and where it’s going tomorrow. We haven’t even touched on the company’s newest project, the Amazon Experience Center – pre-wired, voice-activated smart homes powered by Amazon’s Alexa that are coming to Vallejo, Calif. So instead of just playing your music, the technology can control everything in your home. Potentially, Alexa could be your doctor one day, too.
Got all that?
If there’s one lesson to be learned from Amazon, according to Tim Ronaldson, it’s that business success comes from being obsessively focused on your customer, no matter who your customer is and what industry you’re in. Being customer-centric allows Amazon to constantly evolve based on what its customers want. Simultaneously, as Amazon is focusing on its customers’ needs and desires, it’s always thinking about what’s next.
In an October 2017 interview with Walter Isaacson of Vanity Fair, Bezos said, in part, “You always have to be leaning into the future. If you’re leaning away from the future, the future is going to win every time.”
“Amazon is a case study in ceaseless innovation and interminable disruption,” said Artemis Berry, the vice president of digital retail for Shop.org and the National Retail Federation, in a 2016 article posted on its site. “They have truly earned the nickname of ‘ultimate disrupter.”
Can you become that “ultimate disrupter” in your industry? Start with a customer-centric approach to your business. Pay attention to what your customer not only says he or she wants and needs now, but also anticipate what he or she will want and need in the future. By doing this, you’ll be able to leverage your today to get to your tomorrow.
Tim Ronaldson is a classically-trained journalist who helps businesses of all sizes communicate their message in a way that resonates with their target audience. He has led his own business for the last seven-plus years, serving a wide variety of clients in multiple industries.