Amazon is one of the most well-known and recognizable brands in the world. With almost 470 billion dollars (US) in revenue in 2021 and 200 million Amazon Prime subscribers, it’s no surprise that everyone has at least heard of Amazon. As one of the world's largest and most successful e-commerce companies, Amazon has established itself among customers as a place to get a wide variety of products for lower prices with quick delivery.
How did they do it?
Amazon’s company strategy is based on what is called the Amazon Flywheel. The Flywheel strategy is that lower prices will attract more customers, leading to more sales. More sales will attract more sellers, improving the selection of available products. This will bring more customers and sales to Amazon, allowing them to continue to have lower prices.
Amazon’s Flywheel strategy all links back to creating a company and experience focused on the customer and what the customer wants.
Amazon’s customer obsession
Amazon describes itself as customer-obsessed, their work “starts from the customer and work[s] backwards.” This approach is part of what makes Amazon such a successful company. While most big companies place their main focus on building profit, Amazon is putting that energy into “relentlessly focus[ing] on customer experience …” by building brand awareness, relationships, loyalty, and community with their customers. Amazon does this through several secondary approaches, from generating recommendations, gathering customer reviews, and engaging on social media. All aspects of Amazon’s marketing approach lead back to their obsession with customer satisfaction and crafting a positive customer experience.
Personalized content – AI and machine learning
A large part of the Amazon customer experience is based on AI-generated algorithms. Using AI and machine learning, they can predict customer behavior, forecast product demands, product search rankings, product recommendations, and much more. While these algorithms function in the background, customers unknowingly enjoy the benefits. Amazon provides personalized content to its customers, recommending the right products at the right time with recommending top picks for you or showing you “customers who also bought X bought Y.” By being able to provide individualized recommendations and content to each customer, they built a sense of convenience with their customers, which keeps them coming back. They know that they’ll be able to find what they need quickly on Amazon, or Amazon might already know what they’re looking for!
User-generated content
Over the years, Amazon has established itself as a trusted retailer, and one of the main ways they’ve done this is through customer reviews. Amazon smartly views customer reviews as a way to put out user-generated content. This type of user-generated content allows customers to see that the content is generated by real people who have used and tried these products. This will allow them to trust these reviews, the products, and ultimately Amazon.
Amazon’s email strategy plays a significant role in how effectively they can gather customer reviews. Amazon asks customers for reviews a few days after their purchase. The timing of these emails keeps the customer engaged with the site during peak times of excitement and interest in their new purchase, likely leading to more positive reviews. In these review request emails, Amazon will also recommend similar products or products that other similar customers bought. This allows them to up-sell similar products, ideally leading to more sales and reviews.
Strategic use of social media
Amazon uses social media as a way to connect with its customers. You typically wouldn’t expect a company as big as Amazon to interact and reply to comments, but Amazon replies to and interacts with commenters a surprising amount, and they’re typically quick, helpful, and not very generic replies. This type of interaction with commenters allows Amazon to build a sense of community and accessibility with their customers. Amazon keeps in touch with the “social” part of social media by connecting with customers, as well as sharing lighthearted and funny videos and pictures.
In addition to building a sense of community, Amazon also uses social media to promote products and drive customers to their other services like Prime Video or Amazon Music. They’re able to place a focus on marketing their other content to their followers while still maintaining that same social aspect and community connection.
What can you take from this?
Amazon has built its whole marketing strategy around the customer. They’re always learning about their customers and audience and tailoring the experience to them. By crafting an experience tailored for their customers, they’re able to successfully drive sales and promote additional services in an effective way that doesn’t feel pushy to the viewer.
The key takeaway from Amazon’s strategy is not to be so focused on success that you forget about your customers and their experience with your brand. Amazon has based itself as a customer-focused company on its guiding principle of “customer obsession.” Creating a connected, engaged, and loyal community of customers can be your key to success.
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