Amazon Case Study

December 13, 2017

 

Amazon.com continues to be an unparalleled leader in customer service satisfaction over its more than 20-year history. While many companies' focus on providing their customers with a long time consistent approach, Amazon.com in contrast continues to be a leader in striving to push the boundaries by seeking out what their customers want. This is evidenced by some of Amazon’s biggest failures, but even more staggering successes. In an article published by The Seattle Times, David Streifeld said, “Unlike almost any other chief executive, Amazon’s founder, Jeff Bezos, has built his company by embracing risk, ignoring obvious moves and imagining what customers want next — even before they know it.” (2017). Understanding Amazon’s customers goes beyond listening to them. While some companies focus on productivity or profits, Amazon focuses on its customers. One surprising strategy is that during annual training, Amazon managers and leaders attend two days of call-center training. This direct approach puts leaders on the front lines and speaking directly to customers. This gives leaders and managers a unique perspective. Amazon understands what Henry Ford meant when he said, "It is not the employer who pays the wages. Employers only handle the money . . . It is the customer who pays the wages."- Henry Ford, Ford Motor Company. While a vast majority of companies may focus on high customer satisfaction, Amazon wants to satisfy all of its customers and sets out to meet that goal. Amazon also recognizes that if a customer is not satisfied, their sphere of influence far surpasses their influence when they are satisfied. They take complaints seriously and focus on responding to and thanking customers for their feedback. Using failures and frustrations as a learning opportunity is built into the foundation of Amazon.

 

Growth is a result of both success and failure and what is learned is a result of both. The Motley Fool recently examined Amazon.com and what it has learned and grown, from its success and failures, and compared that journey to that of a growth investor or venture capitalist. They quote Jeff Bezos, CEO of Amazon in the article saying, "I've made billions of dollars of failures. Companies that don't embrace failure and continue to experiment eventually get in the desperate position where the only thing they can do is make a Hail Mary bet at the end of their corporate existence." (2017). Sometimes those successes can be a result of something unexpected. One such example is Amazon’s cloud computing division. This started out as a solution for Amazon’s own computer storage issues and has blossomed to be an invaluable offering that has vastly contributed to Amazon’s success. One of Amazon’s biggest and publicly touted failures was the Fire phone. One of the downsides to the Fire phone was that many of smartphone user’s favorite apps were not available on the phone. Coupled with that, was the difficulty of importing content that is readily available on iPhone and Android phones, and the result is some very frustrated customers. The Fire phone also reduced its price from nearly $200 to 99 cents in just two months, turning the Fire phone into a “fire-sale.” The features on the phone that were meant to be a selling point were also not embraced by customers. Although exclusive and proprietary content have their place, blocking customers favorite content or making it difficult or frustrating to access can mean the death of a new product.  The project was quietly shelved, the loss calculated, and CFO Brian Olsavsky commented at a quarterly conference that, "We obviously do learn from everything we do and value the feedback we get from customers, but nothing to share at this point." (2015).

 

Amazon has shown that they are a customer focused company, that they are willing to make mistakes and learn from them, and that they are invested in meeting the needs and desires of their customers. Amazon sets itself apart by taking responsibility for their mistakes, accepting mistakes as inevitable, and learning and growing as a result. Their business strategy has seen tremendous success as a result of both their successes and failures. Being innovative comes with a price and so does providing the best customer service experience. Amazon is committed to both and does not seem to mind paying the price. Thomas Edison is famous for the quote, "Genius is one percent inspiration and ninety-nine percent perspiration." Amazon seems to be unafraid to put in the sweat collateral to bring their customers the products and services they expect with the customer service they deserve.

 

References

 

Baldacci, K. (2013, June 10). 7 Customer Service Lessons from Amazon CEO Jeff

Bezos. Retrieved December 13, 2017, from https://www.salesforce.com/blog/2013/06/jeff-bezos-lessons.html

 

Bowman, J. (2017, August 20). Amazon's Strategy Is a Perfect Example for Growth

Investors. Retrieved December 12, 2017, from https://www.fool.com/investing/2017/08/20/amazons-strategy-is-a-perfect-example-for-growth-i.aspx

 

Fox Rubin, B., & Cheng, R. (2015, July 24). Fire Phone one year later: Why Amazon's

smartphone flamed out. Retrieved December 13, 2017, from https://www.cnet.com/news/fire-phone-one-year-later-why-amazons-smartphone-flamed-out/

 

Kim, E. (2015, October 21). Jeff Bezos says Amazon is not afraid to fail - these 9 failures

show he's not kidding. Retrieved December 12, 2017, from http://www.businessinsider.com/amazons-biggest-flops-2015-10

 

Streitfeld, D. (2017, July 25). Behind Amazon's success is an extreme tolerance for

failure. Retrieved December 12, 2017, from https://www.seattletimes.com/nation-world/behind-amazons-success-is-an-extreme-tolerance-for-failure/

 

Taylor, K. (2017, November 15). Here are all the changes Amazon is making to Whole

Foods. Retrieved December 12, 2017, from http://www.businessinsider.com/amazon-changes-whole-foods-2017-9

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