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Amazon.com: Customer Service Champion (2015)
EXCERPTS
CUSTOMER SERVICE AT AMAZON
Customer service, loyalty, and customer retention were the three important aspects of Amazon’s service culture. Globally, Amazon was renowned for its fast, efficient, and personalized customer experience. It had always considered delivering excellent customer service a priority and this was engrained in its business culture. The company’s mission was “to be Earth’s most customer-centric company where people can find and discover anything they want to buy online.” Customer-centricity was embedded in Amazon’s DNA. Offering compelling value to its customers had been the core strategy of Amazon since its inception. According to experts, one of the reasons for Amazon being the world’s biggest e-retailer was just that it made customers happier and strove to be the most customer-centric company in the world. “I would define Amazon by our big ideas, which are customer centricity –putting the customer at the center of everything we do – [and] invention. We like to pioneer, we like to explore, we like to go down dark alleys and see what’s on the other side,” remarked Bezos... |
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CONSUMER CUSTOMERS
By the end of 2014, Amazon had a customer base of 270 million (See Exhibit IV for worldwide customer base of Amazon). Experts opined that Amazon was more like an online community. Analysts felt that Amazon differentiated itself in terms of customer service and went beyond the expectations of customers by giving importance to customer perception. For instance, when a customer purchased a book from Amazon and within 90 days, ordered the same book again, Amazon reminded him/her that he/she had already bought it. “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,” said Bezos...
SELLER CUSTOMERS
In order to broaden the selection of products it offered, Amazon allowed third party retailers to sell through its website. In 2000, Amazon began to offer its e-commerce platform to other retailers and to individual sellers who wanted to sell their products through it. Through its subsidiary Amazon Services, it offered programs for seller customers that enabled them to sell their products on Amazon websites and their own branded websites and to fulfill orders through Amazon. Though Amazon was not a direct seller, it earned money in the form of fixed fees and revenue share fees from these third party sellers. Amazon’s seller programs catered to individuals, small businesses, and branded businesses...
DEVELOPER CUSTOMERS
Amazon offered on-demand computing to developer customers through its back-end technology platform. To keep track of its massive online orders, Amazon built a large and sophisticated computing infrastructure. Launched in July 2002, Amazon Web Services (AWS) was a collection of remote computing services offered online for other websites or client-side applications by Amazon. These Web Services provided developer customers access to Amazon’s technology infrastructure that developers could use to run virtually any type of business. According to Jeffrey Lindsay, a senior analyst at Sanford C. Bernstein & Co. , “It delivers a unique user experience in real time to everyone who uses it. It extends to lots of product categories and seamlessly integrates third-party sellers. What they’re doing [with IT] is extremely difficult and very complicated.” In 2012, AWS added 159 new features and services...
BEZOS–THE KEY ARCHITECT
When Bezos founded Amazon, the idea was to put the consumer first and make buying books and other things online simple and delightful for them. He placed customer service above everything else, including profits, and worked hard to establish the philosophy of a company purely based on the philosophy of serving the customer across all departments. Bezos was the key architect of building a customer-centric company as he transformed Amazon from a modest Internet brand into a customer experience champion. According to Gregory Ciotti, marketing strategist at Help Scout , “Amazon is one of those companies that regularly tops the charts for their outstanding service. Anyone who has had to return an item to Amazon knows how helpful and flexible their support team is. This is likely due to the fact that few founders are as passionate about their customer’s experience as Jeff Bezos. Absurdly sharp and insightful, Bezos is an oft quoted idol in all areas of business.”...
USING BIG DATA TO BUILD CUSTOMER RELATIONSHIP
In its early days, when Amazon was primarily a book retailer, the company was the first to use algorithms extensively to provide recommendations to customers such as “Customers who bought this item, also bought this one.” Later in the early 2000s, Amazon realized that it had huge data about its customers who shopped on its e-commerce portals around the world which it could put to valuable use. Being the dominant e-tailer, Amazon had a vast database related to the tastes, preferences, and previous purchasing history of its customers which it used effectively to build customer relationships...
RESULTS
Analysts opined that it was due to the trust Amazon had created among its customers that the company had evolved from a startup bookstore into an established online merchandise retailer. Repeat purchases and word of mouth had made Amazon the market leader in online bookselling, they said. Due to its customer-centric strategies, Amazon managed to carve out a niche for itself in the online business market where many consumers were hesitant to purchase items or give out credit card information to people they had never met or seen. Experts pointed out that because of the customer experience delivered to customers, Amazon had earned good scores in various customer satisfaction surveys. Respondents defined the customer service at Amazon as ‘efficient’ ‘fast’ ‘reliable’ ‘no hassle’, and ‘easy’...
AMAZON LOSING GROUND?
Some critics felt that Amazon had abandoned its commitment to extraordinary customer service and was abusing its market power due to surge in customer complaints in the decade ending 2010. In May 2014, Amazon was involved in a standoff with the publishing house Hachette Book Group (Hachette) after it refused to give Amazon pricing control over its ebooks. It was alleged that after that, Amazon began discouraging customers in the US from buying titles from Hachette by adopting various tactics...
LOOKING AHEAD
Some analysts said Amazon needed to stay competitively-priced and work harder to stay ahead of its rivals as other retailers were finally catching up with it in terms of pricing and free shipping. With most e-commerce sites providing free shipping, Amazon Prime too had lost some of its appeal, they remarked. Experts said that Amazon needed to find a balance between low prices and generating revenues as profits for 2013 were only 0.0037% of sales...
EXHIBITS
Exhibit I: Customer Service Hall of Fame (2014)
Exhibit II:Amazon – Net Sales (in US$ billion)
Exhibit III: Amazon Core Values
Exhibit IV: Amazon Customers Worldwide (1997 – 2014)
Exhibit V: Features Offered to Consumer Customers*
Exhibit VI: Web Services of Amazon
Exhibit VII: Customer Service Approach Adopted by Bezos
Exhibit VIII: ASCI Customer Satisfaction Score (2000 to 2014)
