Could your business be like Amazon?
Tune in to the latest episode of The Sophisticated Marketer’s Podcast to find out
January 22, 2018
Let’s be honest: using Amazon as a benchmark for your business can sound like a way to beat yourself up on a daily basis. Everything about Amazon seems unique: it’s one of the fastest-growing companies in history and recognised as one of the most innovative ever to have existed. It uses data differently, approaches customer experience differently, brings unique resources to bear on almost any task or challenge it chooses, and seems to step effortlessly into sectors and redefine them at will. Any entrepreneur or exec would love to build a business with Amazon’s power, influence and growth numbers. But is it realistic to set yourself such standards?
Bryan Eisenberg believes that it is – and he should know. The latest guest on our Sophisticated Marketer’s Podcast has advised businesses from Google to Marketo to GE on improving online customer experiences and conversion rates. He’s also spent years analysing exactly what makes Amazon, Amazon. The book that he’s written about this with his brother Jeffrey is tearing up the bestseller charts and drawing very positive reviews in the process. Its title is telling: Be Like Amazon: Even a Lemonade Stand Can Do it.
I’ve known Bryan for years. He’s one of the most insightful, open and original marketing thinkers out there. He’s great fun to be around – but he never makes wild statements just for the sake of it. When he claims that the principles that built Amazon can be applied to any business, it’s well worth listening. This isn’t hype.
Click on the link below to hear my Podcast interview with Bryan in full. And scroll down further for the four pillars of Amazon’s success that Bryan believes are applicable to any business. All are familiar concepts – but concepts that take on a wholly new meaning when you look carefully at the way that Amazon applies them:
Pillar 1: Customer centricity
Everyone talks a good game on customer-centricity. Bryan quotes research from Bain that found 80% of executives believe their businesses to be customer-centric. The problem is: only 8% of those businesses’ customers agree.
Amazon’s customer-centricity is different. It doesn’t settle for giving customers what they want today, or what they chose last time they interacted with the business. It’s focused on staying ahead and anticipating what customers will want tomorrow. And that takes far more imagination and commitment.
Amazon’s future-focused customer-centricity has led it into voice search with Amazon Echo and Alexa, and it could next be headed in the direction of drone deliveries and AI-generated fashion. But it’s not a wholly new principle by any means. Walmart (the Amazon of its day) did something very similar. Bryan believes any business is capable of the same. It’s not necessarily about data or resources – it’s about a shift in mentality.
Pillar 2: Innovation
Amazon’s track-record on innovation is particularly intimidating. Can any other business hope to compete? Bryan admits that most would struggle to innovate at the same rate – but that doesn’t mean they can’t innovate in telling ways that differentiate them from the competition. You don’t have to innovate a wholly new technology; just a way of doing things that’s rooted in an understanding of future customer needs.
Bryan’s stories of businesses doing this are one of the most inspiring parts of this podcast: the donut shop that recognises the importance of visual perfection in the age of Instagram, the air conditioning maintenance company that came up with the idea of using distinctive red screws – so that customers could see that the whole AC unit had been checked by an engineer. As he explains in our interview, there’s no need to obsess about innovating with Virtual Reality (VR) or Augmented Reality (AR) when you can make a huge difference for customers just by improving your instruction manual.
Pillar 3: Agility
Innovation is a natural result of Amazon’s customer-centricity. So too is agility. Bryan talks about the need to deliver at the speed of the consumer as one of the most important paradigm shifts in retail – and in business in general. You don’t wait to improve things for your customers at a speed that suits you – you redesign processes to do so at a speed that suits them. It’s a mentality that many start-ups have – and one of Amazon’s great strengths is a culture that’s retained the same commitment.
Bryan talks about how Amazon redesigned its entire MP3 online store within just two hours following the death of Michael Jackson. I was working in the music business at the time, and remember this very well. It immediately aligned Amazon with how its customers were feeling at that moment. Amazon didn’t achieve it just by employing people who could rebuild an eCommerce site at the drop of a hat. They anticipated an event that could happen, empathised with how millions of people would feel when it did, and had a contingency plan in place to respond at a speed that would make a difference to them. That’s what true corporate agility looks like. It’s not just an instinct – it happens by commitment and design.
Pillar 4: Continuous optimisation
Anticipating what customers are going to do, innovating everywhere, and doing so at speed: if you think that sounds like a recipe for mistakes, then you’d be right. As Bryan explains, the continuous testing and optimisation that Amazon is famous for is really an inevitable response to how it operates. When you run a business this way, things will go wrong at times – and they’ll go wrong quickly. To make it all work, you need a system for fixing them that’s just as fast. That’s why continuous optimisation is written into Amazon’s DNA. This business succeeds because it doesn’t expect to get things right first time. It’s not trying to design a finished product – it’s running an on-going, inherently adaptable experiment.
Why marshmallow eaters struggle to be like Amazon
Underlying these four pillars of Amazon’s success is another principle that’s arguably just as important. It’s the passage of Bryan’s book that people are most likely to highlight on a Kindle when reading (just one of the incredible insights that you can gain from Amazon data). It’s the principle of not eating the marshmallow.
In a famous experiment that’s also something of a YouTube sensation, kids were given a marshmallow and told that if they refrained from eating it, they could have an additional marshmallow later. They were then left alone with their marshmallow – and filmed as they wrestled with the dilemma of whether to scoff it.
This study of children’s capacity for delayed gratification had one predictable result – and one rather less predictable one. As you might expect, the vast majority of kids ate the marshmallow. What was really interesting was that, when experimenters checked in with the same kids years later, they found that the most successful amongst them tended to be those that had held out for marshmallow number two.
What does all of this have to do with Amazon? It sums up the problem that most retail businesses have – and in fact, that many businesses have full stop. They are so focused on the need for immediate revenue that they can’t make a longer-term plan to bring greater disruption to their industry. The great achievement of Jeff Bezos was to convince investors in Amazon that it was worth taking a longer-term view – and waiting for the second marshmallow. It allowed the company the time and space to design something different rather than just responding to the promptings of the market.
That’s the real test of businesses that want to be like Amazon. It takes vision and it’s not easy (as anyone who’s stared at a marshmallow for 10 minutes without eating it can tell you). However, it will allow you to put Bryan’s pillars into action in a way that very few of your competitors can.