Obsess over customers. That is one of Jeff Bezos’s key business tips. Obsess over customers! And it makes a lot of sense. They’re the ones who pay for your product right? They’re the ones who will come back if satisfied and THEY are the ones who will blog and tweet about how bogus your product is if you offer a sub-standard or good service.
In an interview with the Forbes magazine that will be published on April 23rd 2012, Jeff Bezos, the 48 year old founder, president, chief executive officer, and chairman of Amazon.com, the world’s largest online retailer gave 10 tips that he believes are necessary for any enterprise to thrive:
1. “Base your strategy on things that won’t change.”
No matter what it is you sell: chewing gum, mobile toilets, newspapers or cooking oil, it is all part of one big plan with three big constants: offer a wider selection to customers, lower prices and fast, reliable delivery.
2. “Obsess over customers.”
Early on in his business Bezos brought an empty chair into meetings so his lieutenants would be forced to think about the crucial participant who wasn’t in the room: the customer. Now that role is played by specially trained employees they call “Customer Experience Bar Raisers.” When they frown, vice presidents tremble. Getting company vice presidents trembling is not the agenda, customer satisfaction is.
3. “We are willing to be misunderstood for long periods of time.”
Many of Amazon’s expansions look like money-losing distractions at first. They sometimes send the company’s share price dipping and evoke scorn from financial analysts. Bezos shrugs. If the new initiatives make strategic sense to him, a five-to-seven-year financial payoff is okay.
4. “There are two kinds of companies: those that try to charge more and those that work to charge less. We will be the second.”
Lots of retailers talk about holding down costs and passing the savings to the consumer. Few do so as intently as Amazon, where “frugality” (sparing, thrifty, prudent, economical, avoiding waste, lavishness or extravagance) is one of eight official company values. The reward for putting up with cheap office furniture: a $90 billion stock market valuation and 35% revenue growth.
5. “Determine what your customers need, and work backwards.”
Specifications for Amazon’s big new projects such as its Kindle tablets and e-book readers have been defined by customers’ desires rather than engineers’ tastes. If customers don’t want something, it’s gone, even if that means breaking apart a once powerful department.
6. “Our culture is friendly and intense, but if push comes to shove we’ll settle for intense.”
Data reigns supreme at Amazon, particularly head-to-head tests of customers’ reactions to different features or designs. Bezos calls it “a culture of metrics.” With dozens of these gladiator-style showdowns under way each week, there isn’t much time for soothing words or elaborate rituals of social cohesion.
7. “If you want to be inventive, you have to be willing to fail.”
Early on the company hired a lot of editors to write book and music reviews—and then decided to use customers’ critiques instead. A foray into auctions flopped. Bezos regards such stumbles as a part of life, as long as Amazon can learn something useful. Try something new, it could work.
8. “In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts.”
Amazon’s advertising budgets are surprisingly small for a retailer of its size. Bezos believes old-fashioned word-of-mouth has become even more important in the digital age—so he prefers low-key process improvements that are meant to get happy customers buzzing. One favorite: Amazon’s war on clamshell packaging, so toys and other shipments will be easier to open.
9. “Everyone has to be able to work in a call center.”
Complaints can be devastating in the age of viral tweets and blogs. Bezos asks thousands of Amazon managers, including himself, to attend two days of call-center training each year. The payoff: humility and empathy for the customer.
10. “This is Day 1 for the Internet. We still have so much to learn.”
Bezos first made that observation in 1997, in his initial letter to Amazon’s shareholders. He hasn’t changed much from it. At Amazon’s new headquarters, two of the largest buildings are Day 1 North and Day 1 South. In interviews Bezos still talks about the Internet as an uncharted world, imperfectly understood and yielding new surprises all the time. Openness to learning is what it’s all about.
From the top man at the world’s largest online retailer, the head honcho at the company that is the undisputed leader in the sales of e-book readers (59% market share), with a customer base of over 30 million customers worldwide and $48 billion (in 2011) in revenue, here’s a business tip for you: obsess over customers!
Adapted from Forbes