What can we learn from Amazon...... #3
- Adrian Dionisio - business737 owner
- Oct 9, 2020
- 5 min read
Updated: Mar 17, 2024
Jeff Bezos, the founder and CEO of Amazon was, in 2020, the richest man in the world for a third consecutive year. Which of his business concepts can be used to grow any businesses and become more profitable?
Successful Business Strategies
1. Intense focus on Customer Service & Experience
"Always treat you customer as king"
If there is one thing we can learn from Amazon's success, it is that this old adage is as relevant as ever. Never underestimate the importance of your customer. Value them and treat them as you would like to be treated.
“If you make a sale, you can make a living. If you make an investment of time and good service in a customer, you can make a fortune.”
Amazon is built around one thing: customer happiness. This is the foundation of all their success. From it's start in 1994 the company has set out to be “ the earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavours to offer its customers the lowest possible prices.”
Amazon are not competitor obsessed, they are customer obsessed. One of the fundamental principles of business is that what works out best for the customer ultimately works out to be best for the business
“If we can arrange things in such a way that our interests are aligned with our customers, then in the long term that will work out really well for customers and it will work out really well for Amazon.”
Amazon has a relentless commitment to the customer experience. Everything that Amazon does — every strategic move, every investment — is guided by its goal to be the most customer-centric company in the world. Every step along the way is designed to serve customers as best as humanly possible.
"People will forget what you said, people will forget what you did, but people will never forget how you made them feel"
2, Business Development
"If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table"
Amazon has continually moved into one sector after another. Unlike Apple, Google, and Microsoft, Amazon is not fixated on a system of interlocking apps and services. Amazon instead emphasizes platforms that each serves its own customers in the best and fastest possible way.
A strategy of continuous evolution has allowed the company to experiment in numerous different areas. The website that once sold only books is now not only a dominant retailer, but has pioneered new categories such as cloud computing, air delivery and smart speakers. The key to its success is not any one process, but how it integrates its customer obsession deep within its culture and practice.
“Our customers are loyal to us right up until the second somebody offers them a better service,”
Amazon innovates by starting with the customer and working back. Every new initiative starts with a description of how the service works and how hypothetical customers would react to it. How will the service affect the customer? What surprises them about it? What concerns do they want addressed? Amazon internalize how customers would think and feel about the new innovation from the very start.
The company strongly believes that until you internalize the customer's perspective, nothing else really matters. That's key to how the company operates. They never stop innovating and experimenting with the aim of always delivering more value than the customer expects.
3. Business Innovation
With so many failed products and experiments it could be argued that the company was built on failure. This however is the secret to innovation. Without failure you have no room for improvement.
“If you double the number of experiments you do per year you’re going to double your inventiveness.”
We can learn from Amazon that we must always keep experimenting, innovating and testing. Equally important is measuring the outcomes for effectiveness and viability. With any idea, the first question to ask yourself is “can we measure this?”
Bezos commented how his company is stubborn with respect to vision but flexible when it comes to details. He stated;
“If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve.”
4. Business Strategies based around things that last
What are your customers saying to you? Where are you putting your energy and focus? Is it in something that customers will still care about in 10 years, in things that won't change? Bezos best summarises the concepts behind basing strategy on things that won't change;
“I very frequently get the question: ‘what’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘what’s not going to change in the next 10 years?’ The second question is actually the more important of the two – because you can build a business strategy around the things that are stable in time….in our retail business, we know that customers want low prices and I know that’s going to be true 10 years from now. They want fast delivery, they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon, I just wish the prices were a little higher [or] I love Amazon, I just wish you’d deliver a little more slowly.’ Impossible [to imagine that future]. And so the effort we put into those things, spinning those things up, we know the energy we put into it today will still be paying off dividends for our customers 10 years from now. When you have something that you know is true, even over the long-term, you can afford to put a lot of energy into it.
Amazon's strategy of success has been to plan long term based on what won't change. How many companies plan ten or twenty years ahead? Not many, but they should.
Here’s a list of books that Bezos recommends all his top leaders read.
The Remains Of the Day by Kazuo Ishiguro
Sam Walton: Made in America by Sam Walton
Memos from the Chairman by Alan Greenberg
The Mythical Man-Month by Frederick P. Brooks Jr.
Built to Last: Successful Habits of Visionary Companies by Jim Collins
Good to Great by Jim Collins
Creation: Life and How to Make It by Steve Grand (influenced the creation of AWS)
The Innovator’s Dilemma by Clayton M. Christensen
The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt and Jeff Cox
Lean Thinking by James P. Womack
Data-Driven Marketing by Mark Jeffery
The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb
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