Amazon has come a long way from its humble beginnings as an online bookseller. Since its launch in 1994, Amazon has grown to become an ecommerce behemoth. These days, it’s one of the first places shoppers turn to buy anything from cleaning products to the latest tech gadgets.
And with over 564 million products sold in the U.S. alone, Amazon is the uncontested ecommerce leader and continues to grow and innovate.
This success took years to achieve and is due in part to Amazon’s strategic approach to growth. Any ecommerce business, regardless of where they start, can learn from Amazon’s example to grow their business and attract and retain more customers.
Here are six lessons that are at the center of why Amazon is so successful. Use them to make your ecommerce business even stronger.
1. Meet the needs of your customers
Part of the reason for Amazon’s evolution from book retailer to “everything” retailer is its ability to tap into the power of referrals.
Jeff Bezos, Amazon CEO, is quoted as saying, “It used to be that if you made a customer happy, they would tell five friends. Now, with the megaphone of the internet, whether online customer reviews or social media, they can tell 5,000 friends.”
News travels at lightning speed across the internet, so to Bezos’ point, by offering customers a positive experience, Amazon grows when their customers share their experiences with their friends and family. This in turn drives new people to Amazon’s store to browse the product pages, experience the benefits for themselves, and then share about it.
The key to sustaining long-term growth with this cycle is to take a customer-focused approach. Bezos explains it this way, “There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.”
What you can do
We live in an age where people share their experiences online, and personal referrals hold more weight than brand marketing.
Use this audience preference to your advantage and focus on ways to make your customers happy. If you do a good job, your customers are more likely to share their experiences, which will help grow your customer base and increase your revenue—by lowering customer acquisition cost (CAC) and potentially boosting lifetime value (LTV).
2. Incorporate data analysis into your decision making
Amazon prides itself on its commitment to innovation and testing. They test every aspect of their business—from pricing to product selection—so that decisions are based on customer needs and not what Amazon thinks customers might want.
As Bezos puts it, “Our customers are loyal to us right up until the second somebody offers them a better service. And I love that. It’s super-motivating for us.”
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