Tag Archives for " Jeff Bezos "

4 Putting Amazon In Perspective

How could my 79-year-old mother possibly be a poster child for Amazon.com? When it comes to technology, she’s utterly hopeless… She’s never written or received an e-mail in her life. She’s never  Googled anything, or referred to Wikipedia. And to her, a twitter is something finches do.

And yet here she is, contently reading yet another novel on her Amazon Kindle.

 

The new  Kindle.

The new Kindle.

 

About a year ago my mom had a “micro stroke” that affected the optical nerve in her right eye. Made it almost impossible to read for any length of time, and typical, 12-point type is almost impossible to decipher. To make matters worse, the little library in her town can’t afford many large print books. So she was stuck.

Enter the Kindle.  Critics have panned it for being technologically archaic, and like Sony’s book reader, “bound to go nowhere.” Some say it’s just another pet project of Jeff Bezos, like his exploits in the commercial space race. And Wall Street analysts say it’s such a tiny piece of Amazon’s model, it’s too small to even consider.

But it’s a big deal to my mom. And to me, it’s symbolic of everything good about the Amazon brand.

In the 4th quarter of 2008, when the rest of the retail world was sucking wind, Amazon reported its best holiday season ever. Net sales increased 18% to $6.70 billion, compared to $5.6 billion in fourth quarter 2007. For the year, net sales increased 29% to $19.17 billion, and net income was up 36%.

As Fortune Magazine put it, “By virtually any measure — market share, revenue, profit, stock price, customer satisfaction, international reach  — Amazon Inc. is thriving.”

But why?  Why did Amazon survive the dot-com crash when so many brands fizzled into oblivion? Why did Amazon become the world’s largest on-line retailer? Why does the Amazon brand rank so well on virtually every brand loyalty index?

Because they treat all their customers like my mom.

Bezos started out during the dot-com boom with a plan to sell a lot of books on the internet. And he certainly accomplished that. Amazon went public in record time. All his investors, including his parents, made a fortune. He was even voted Time Magazine’s man of the year in 1999.

But unlike many of the CEOs of the day, Bezos was thinking long-term. From the very beginning he understood that the success of his brand hinged on one thing:  An unrelenting focus on the customer.

That’s the brand mantra of Amazon. To this day, Bezos continually sells Amazon as the most customer-centric company on earth. When he has a tough decision to make, he always defaults in favor of the customer. Often at the expense of short-term profits.

When Amazon added the customer review function many people thought they were crazy. The assumption was that bad reviews would hurt sales. In fact, the transparency boosted sales and help solidify a truly interactive brand relationship with millions of people. Now customer-generated reviews are standard procedure in the e-commerce world.

Amazon’s short-lived TV campaign is another example of how Amazon stays true to its brand. “We did a 15-month-long test of TV advertising in two markets – Portland, Oregon, and Minneapolis – to see how much it drove our sales,” Bezos said in a 1997 interiview. “And it worked, but not as much as the kind of price elasticity we knew we could get from taking those ad dollars and giving them back to consumers. So we put all that money into lower product prices and free shipping. That has significantly accelerated the growth of our business.”

They haven’t run a mass media campaign since, and yet the Amazon brand has grown even stronger. Suppose, maybe, it’s the customer’s experience that cements long-term brand relationships, not advertising?

Bezos believes their focus on the customer has also helped Amazon launch innovative new products and services over the years, like Amazon Prime pre-paid shipping and a host of services for small e-commerce companies.

“We wanted to have a customer-focused culture. We consciously tried to get that. If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.”

Which brings us back to my mom’s Kindle. 

The scalable type is plenty big enough for her to read. There are 230,000 titles to choose from.  It’s simple to use, (with some assistance  from my dad on the downloads.) There’s no annual contract and no monthly bill. And the new, second generation Kindle will even read outloud to her. 

It’s everything she would have ever asked for, if she could have dreamed of such a thing.

To my mom, the Kindle isn’t an electronic gadget. It’s not about the sophisticated wireless connection or any other technological leap. It’s just a tool that enables her to do what she’s always done… curl up with a good book. And for that, we’re genuinely grateful to Bezos and his team.