By being customer-centric, continuously optimizing and innovating, and creating an agile corporation, Amazon.com has dominated the market. Your company can as well, says best-selling author and online conversion optimization expert Jeffrey Eisenberg.
Conversation between Jeffrey Eisenberg (Online Conversation Optimization Expert) and Danny Goodwin (Amazon User)
Danny Goodwin: I use Amazon a lot, as do many of our readers. I recently saw a figure that Amazon accounts for 30 percent of all e-commerce sales in the U.S. How has this happened? Why do we use Amazon so often? What has been the key to Amazon’s growth and success?
Jeffrey Eisenberg: Amazon.com sold its first book in July of 1995. They ended 2013, selling $74.45 billion worth of stuff, all kinds of stuff.
The company did not start out knowing substantially more than most other businesses starting their efforts online, but because it was willing to think ahead, develop data-driven technologies and push the boundaries of how best to do business on the Web, it is now the largest online retailer. It now captures about 30 percent of every e-commerce dollar in the U.S. (and in many other markets as well), and it is also a successful B2B vendor, hardware developer and publisher.
Amazon is 10 years ahead of the curve and even leads strongly data-centric companies like Walmart. Amazon was built upon Jeff Bezos’ vision and the four pillars of success:
- Customer Centricity
- Continuous Optimization
- Culture of Innovation
- Corporate Agility
DG: When looking at Amazon’s success, what is one core tenet Amazon embraces that maybe other digital marketers aren’t, but should be?
JE: “The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.” ~ Jeff Bezos, founder and CEO of Amazon.com
DG: When looking at Amazon’s optimization strategy, what impresses you most and why?
JE: Amazon continuously optimizes every aspect of their business. I don’t mean the traditional marketing optimization tactics of A/B testing changing buttons or buyer flows but they optimize operations, marketing. finance, etc. To get a full understanding of how they push all of their operations to optimize it is worth taking a few minutes to look through the Slideshare Amazon.com: the Hidden Empire.
Back in 2004, we knew that Amazon.com was already doing more than 200 marketing optimization tests at any given time. Even today most companies average between two and five tests a month.
So imagine if Amazon has not scaled the amount of tests they had but continued to do only 200 tests a month and most of their competitors did even 10 tests a months, how many more times is Amazon learning and optimizing over their competitors. The key is that Amazon.comunderstands that optimization is not a tactic or a project but it is a strategic competitive advantage woven into the management of their business and it’s ultimate responsibility of the CEO.
DG: Amazon and Google have become competitors in a few areas, such as shopping, entertainment, tablets, and so on. Where do you see this fight going over the next few years, and who do you think would ultimately win in an Amazon vs. Google fight?
JE: Amazon and Google will both be winners. However Amazon, to a greater degree than Google, has a Bias for Action among their core values:
“Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.”.
DG: Is Amazon just so far ahead of everyone else it’s game over? Or can companies compete with Amazon.com? If so,why? If not, why not?
JE: The game is not over. Nevertheless, most companies will not be able to compete; they won’t even be able to catch up.
The Four Pillars of Amazon’s success can be adopted by other companies, they will be other winners, too.
Compiled by: Ayanleye Samuel Oluwafemi (CEO, Packagingstores)
Excerpts: LinkedIn Marketing Solutions.