Tag: Amazon

Amazon’s Investment in Customer Experience

Amazon’s Investment in Customer Experience

Amazon’s Jeff BezosThere was a great case study shared by Jeffery Eisenberg yesterday in his post “Should You Cancel All Your Advertising?”. In 2003, Jeff Bezos pulled all of Amazon’s advertising and chose to reinvest those dollars in deferring shipping charges for customers. This shows insight into the top potential objection to shopping online and directly combats it – if I can get the same item for less on Amazon AND not pay shipping, the only remaining reason to shop retail would be if I absolutely had to have something today. By giving shipping back to the customer, Amazon used great customer experience to generate great word of mouth. But, this does not come without a pricetag. In a recent presentation from Amazon’s CFO, forgone shipping revenue was estimated at a whopping $600Million for a single year.

To answer the question Eisenberg poses of whether or not other businesses should cancel their advertising to focus on word of mouth marketing alone, there are a few considerations:

1) Current Customer Experience – Why are people opting for your competition (be it another business or another channel) instead of you? Is that something you could correct by reinvesting marketing dollars?

2) Quality of Customer Stories – When folks do select your business, what kind of conversational capital are you providing them? Is it the kind of story they will want to shout from the mountaintop, tell a select few, or never think about mentioning again.

3) Awareness & Urgency – Does anyone know who you are? If the answer is no, it could take a long time to launch your business with absolutely no advertising. You would be relying on your immediate personal and business connections to get the word out.

If you do have a solid customer base who would be willing to tell your story more often if only you provided them with a better one, the reinvestment of marketing dollars into your customer experience might payoff just as much as Amazon’s did.