Should Your Business Be Like Amazon? The Customer-Centric Experience

Updated: Oct 19


customer centricity begins with customer service

Your business may depend on sales. But there's no such thing as sales without customer loyalty.

A loyal customer base begins with customer experience. And customer experience is, by default, customer-centric.

But what does it mean to develop a customer-centric brand? Can you establish a customer-centric approach without sacrificing long-term revenue? And can a customer-centric organization survive in the face of a constantly evolving retail landscape?

The Importance of Customer Centricity

A customer centric approach means teamwork

Once upon a time, a business would speak and people would listen. But in 2022, the opposite is true.

It's no longer sufficient for a business to offer a clearly defined brand identity backed by a clever marketing campaign. Or even to convey its brand story. It needs to offer a total experience for customers — not so much a product as a way of life.

And for the past 25 years, Amazon has helped pioneer this shift from product to customer. Customer centricity isn't just a memorable catchphrase for Amazon. It's an entire business model that's ineradicably altered the face of both retail and marketing — and subsequently the relationship between businesses and consumers.

Customer centricity starts with placing the values of the customer as the sole driver of your brand. It requires understanding their needs. Their desires. Their dreams. And providing a product to fulfill them. Customer centricity doesn't just create a brand. It creates a culture.

And customer-centric culture is what's driving our world today. But what does the Amazon model mean for your business? How does the customer-centric experience reflect on your brand? Is customer centricity necessary for your brand to survive? And how can you adopt it with barely a fraction of Amazon's budget?

Let's look at just how Amazon got to be Amazon in the first place.


The Digital Landscape — The People's Landscape

Customer centricity and customer feedback

When Amazon launched in 1995, the internet was hardly the ubiquitous phenomenon it is in 2020. But it was ruled by an ethos that distinguished it from traditional media.

It represented the voice of the people. Their values. Their lifestyles. Their needs. And their habits.

As frustrating as it can be for companies to try and navigate the peculiar ecosystem that is Amazon, it's to Jeff Bezos' credit that he recognized a void in this emerging digital landscape.

Chiefly, if customer trends are constantly changing, the marketplace needs to adapt accordingly. That meant that the whole customer experience needed to be reimagined.

Realizing the need for an entirely new reimagining of the marketplace as being entirely customer-driven didn't just help define Amazon. It helped define the nature of digital media as we know it.

That doesn't mean that there weren't risks. When Amazon first went public in 1997, its revenue was only approximately $15.75 million — and that was with an accumulated deficit of close to $6 million. In 2021, the company's reported net sales were over $469 billion.

In comparison, a recent report from UBS has indicated that up to 50,000 retail storefronts are likely to close in the US by 2026. That's not necessarily a result of a lack of customer centricity. It's a result of the convenience of Amazon.

And convenience is the first step toward understanding any customer-centric strategy.

Amazon didn't just change retail. It changed the very dynamic between consumers and businesses.


The Amazon Template

A template for defining customer experience

Amazon may command the lion's share of eCommerce, but they're hardly the only marketplace in town. They're simply the most consistent one.

To understand just how Amazon became synonymous with customer centricity, it's important to review some of the key elements in the Amazon formula.


Design

Even as early as 1995, Amazon was able to recognize that consumers aren't going to purchase what they can't understand. That's why they continue to maintain the most responsive, user-friendly, and image-rich platforms; a design that set the standard for online retail as we know it.


Exclusivity

There may be a host of other online retailers offering free two-day shipping, bundled savings, and even one-click ordering. But consumers always remember the originators. And Amazon was far ahead of its competitors' time.


Diversification

It's easy to forget that Amazon initially began as nothing more than a virtual bookseller. Today, over 500 million different products are being sold on Amazon each day, to mention nothing of their own proprietary line of electronics and — in sharp distinction to its major competitors — their very own algorithm.


Trust

Why do customers continue to rely on Amazon as opposed to their competitors? Consistency. Not merely in service, but in competitive pricing and reputation.

Where other retailers consider profit to be the sole definitive benchmark, Amazon knows that customer trust and loyalty are fundamental keys that define long-term reputation.


Retention

Customer retention may be vital to the success of any business. But Amazon Prime has perfected the model with the most recent estimates indicating a retention rate of 98 percent after a two-year subscription. That's despite an increase in subscription costs. And that's despite competitive offerings.

Prime is, of course, only a small portion of Amazon's business. But despite lower prices from competitors whose very existence is dependent on staunch customer loyalty, Amazon continues to retain customers even despite rampant criticism. Why?

It's summed up in the six words which comprise their slogan: "The earth's most customer-centric company."


What Your Business Can Learn From Amazon

What a customer centric organization can learn from Amazon

Cognizance

Customer experience begins even before the customer reaches out to you. Packaging, design, and curation aren't simply marketing tools. They're an integral part of the overall customer experience and should be tailored specifically with that end experience in mind.

Even the smallest interaction with customers will affect their overall perception of your brand. And if you want them to remain customers, be prepared to understand their needs and not your convenience.


Communication

Amazon's customer experience doesn't shape the customer. It's shaped by the customer. What this means is a clearly defined line of communication that isn't just responsive, but transforms direct customer feedback into actionable operating standards.

Amazon doesn't simply listen to customers. They interact directly with them, creating a focus that's reflective of the customer — not their shareholders.


Community

By providing a platform driven by customer reviews as opposed to advertising and marketing, Amazon builds a community organically.

While it's a model that's been duplicated by other retailers, there are still more than a few holdouts. But brand advocacy is a focus your business simply can't afford to lose out on.

Whether it's your site or your social media presence, your customers aren't simply customers. They're your tribe — and tribes are quick to defend their leader. Your customers aren't passive consumers. They're an extension of your brand itself.


Important Customer-Centric Metrics to Remember

Customer centric metrics

One of the most difficult challenges for any company looking to implement a customer-centric strategy is the inability to provide customer-centric metrics to glean actionable insights from.

While this will largely depend on the type of services an organization provides, here are some of the more common metrics you'll find both on Amazon and in eCommerce as a whole.


Conversion rates

Despite wildly varying claims that the average conversion rate on Amazon is anywhere from 10 - 20 percent, the reality is that your conversions are dependent on both your product line and marketplace competition.

Generally speaking, it's a good idea to use roughly 10 - 12 percent as a benchmark to measure your conversions and gradually see how you can improve that rate over time—whether it's through decreasing prices or optimizing your product listings. Discovering your conversion rate is simple: divide the number of purchases by the number of sessions from each visit.


Churn rate

Your churn rate is based on the percentage of customers that choose to not make a repeat purchase. And it's not uncommon for first-time customers to make purchase decisions only to never return. But the issue may not be your product. It may be the overall customer experience.

It's natural to assume that developing a customer-centric culture means providing superior customer service. But customer satisfaction doesn't just begin or end with fulfilling an order promptly. It's the whole of the user experience, from design to fulfillment, that establishes customer centricity.

There are multiple stages to the customer journey. But it's the customers who return you should be listening to. And customer relationship management can be one of the more difficult aspects for a small business to confront.

Maybe your content is poorly organized or uninformative. Maybe you're not proactive in customer engagement. Take the time to listen to customer needs and glean direct insight into how you can improve your service. Personalized feedback can be worth much more than aggregated customer data.


Customer lifetime value

Customer behavior will change over time. And sometimes, even the staunchest of brand advocates can be swayed toward your competition. But it's the long-term customer value that establishes your brand as being a truly forward-thinking and customer-centric entity.

At its core, customer lifetime value consists of the total revenue earned from a customer. But customer lifetime value is about much more than customer sales. It's about retaining customer loyalty. It's about maintaining organic brand advocacy. And ultimately, it's about establishing absolute customer centricity.


The Future of Customer Centricity in a Post-Amazon World

A customer centric world

Amazon may have designed the blueprint for customer centricity in the digital world. But as the lines between the digital and the physical retail worlds become increasingly blurred, both a product-centric and a customer-centric approach will become increasingly necessary for businesses to survive.

Product development isn't a question of competition. It's a question of fulfilling customer needs. It's a question of developing a unique and easily identifiable brand that makes a direct impact on the lives of your customers. And ultimately, it will be your customers who dictate the development of your product, not your competition.

That's because a truly customer-centric culture isn't defined by a brand. It's defined by a tribe.

 

Customer centricity is more than just fulfillment. It's about the whole of your digital commerce presence. Find out more at Color More Lines.

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