Amazon.com: A+ for Engendering Customer Loyalty via Customer-centricity

by Chris Fischer

Our own Phil Rubin is a strong advocate for Amazon as evidenced by his numerous mentions and posts. His passion for this brand sparked an interest in me, and as a new Amazon customer, I wanted to share my perspective of this true customer-centric retailer.

Amazon is a prime example (no pun intended) of delivering a world class, customer-centric experience by leveraging specific assets:

  • Use of customer data (transactional and social)
  • Product availability
  • Product information
  • Pricing
  • Delivery
  • Customer service
  • Extending the experience

By using each of the following key focus points, Amazon consistently earns and nurtures loyalty to its consumer base:

Data usage - Amazon uses data to make the customers’ shopping experience easier and more engaging.They remind customers of what they have purchased, provide them with suggestions based on what other similar customers have purchased and provide history to peruse in case they have forgotten itemspreviously purchased andenjoyed.Amazon has created a very relevant shopping experience by using data to make shopping easier, educational and ultimately more rewarding for their consumer.

Product availability is second to none – Chris Anderson in his Wired Magazine article, The Long Tail: Why the Future of Business Is Selling Less of Moreaptly describes why Amazon is winning.They most often have what you want, no matter how obscure.In today’s market, online shoppers expect a robust inventory or they will find what they want only a few clicks away.

Product information - There was a time when the purchaser had to make a purchase without the benefit of a product review, or at best, one referral from a confidant.Today, Amazon provides a wealth of product information through hundreds of reviews on most products, significantly increasing pre-purchase knowledge and minimizing post-purchase cognitive dissonance.

Pricing - Amazon.com often makes the market in price leadership.Using the Amazon store or the Amazon Marketplace, one can often find the best price available – even with shipping fees included.Customers trust Amazon and their no-hassle return policy and will most often pay slightly more to make their purchase at Amazon.True loyalty does just that – it causes customers to be less price sensitive because they trust and value the brand.

Delivery -Amazon created Amazon Prime to reward their loyal customers with two day, free shipping on most items for an annual fee of just under $80.Although many online retailers are moving toward “Free” shipping, Amazon’s loyal customer base will continue to pay the fee to receive their purchases days ahead of the average online retailer’s fastest delivery schedule.

Customer service is exceptional for an online retailer.They stand behind every sale they make, regardless if it is from their warehouse or one of their vendors.Returns are hassle-free.Print out an Amazon shipping label, pack up your items and call UPS for pick-up.Replacements are mailed even before Amazon receives your return and returns are quickly credited. With direct human interaction, Amazon has crafted an exceptional experience.

Extending the experience – Lastly, Amazon has extended benefits to Amazon Prime members in the form of “Free” online streaming movies and television shows.Unrelated to the purchasing experience, Amazon has provided a benefit that extends the value of their brand beyond the transaction.This added perk keeps Amazon top-of-mind even when their consumers are not purchasing.

I now see why Phil is such a big fan of Amazon. In our opinion, all retailers should look to Amazon as a leader. Their business models may not allow them to mimic what Amazon can do in terms of product availability, pricing and delivery.However, all brands can do more to leverage data, improve upon their customer service experience and extend the value of their brands outside the typical transaction.Loyalty is driven by exceptional customer-centric brand experiences that the competition can’t match as easily as your price.