6 Lessons B2B Companies Can Learn from Amazon

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Let me start out confessing that I have a love/hate relationship with Amazon. I bet a lot of you reading this suffer from the same malady. Amazon is like the giant squid threatening to swallow up Tokyo – seemingly unstoppable. They gobble up entire markets and drive retailer and e-tailers out of business.

And when you make a purchase from Amazon, you put more money into the pockets of the world’s richest person, Jeff Bezos – as if he needs a few more bucks. Personally, I would rather enrich the small company struggling to make a go of it. Yet, like many of you, I still contribute to Amazon’s domination because of their selection, pricing and service.

I spent a good part of my career in the B2B software industry playing David against industry Goliaths and always enjoyed the challenge and occasional victories. There is satisfaction in competing against the biggest –sometimes also the best and sometimes not.

With all this in mind, why am I such an admirer of what Amazon is doing? More importantly, what are the lessons we B2B companies can learn from Amazon to make us stronger and more successful?

Lesson 1: Deliver incredible customer experience (CX).

One of the hallmarks of good CX is to make sure your customers don’t need service in the first place – in other words, give customers a positive experience at every state of the buying and usage process. Amazon excels at this. You get what you ordered, when you are supposed to (usually) and the experience is mostly pain-free – even pleasant if you are one of those who enjoys shopping online. And if something happens, they take care of customers quickly and efficiently.

CustomerThink.com has lots of information on how to improve your B2B CX game, but here are a few suggestions:

  • Remember that B2B companies are comprised of individuals that appreciate similar (or better) levels of service as when they deal with B2C companies.
  • Don’t overpromise – meet expectations routinely, and exceed them when necessary.
  • Map your customer journey to ensure you know how to satisfy customers at every touchpoint.
  • Communicate often and transparently, and encourage this to be a dialogue, not a monologue.
  • Offer multiple communication channels including, phone, chat, email, online forms, etc.
  • Set your KPIs, benchmark the current numbers and set your company on a path of constant improvement.

Lesson 2: Make your brand/solution easy to find in search engines.

Amazon is a master at two aspects of search. First, at being high in the search rankings. You will usually see Amazon in the first group of page one search engine rankings. But even more importantly, when you search for a particular item on the Amazon website, you will quickly find the results, expertly ranked by relevance. Most other online and on-premise companies can’t compete. On many occasions, I’ve searched for a particular item that I know a company has, yet it doesn’t show on their search results.

As I tell my B2B clients: never, ever lose business to a competitor because prospects can’t find information on your website. This is so important that I consider Search Engine Optimization (SEO) a baseline marketing expenditure. And since there may be multiple decision makers and influencers, you also need to target your off-page and on-page SEO to attract unique audiences (e.g. IT, management, finance, etc.).

Lesson 3: Master the upsell and cross-sell.

Upsells are when a customer purchases an item related to the initial product, and cross-sells are when a customer buys something not related to the initial product. Both types of sales can add hugely to your own bottom line because there is no incremental cost in bringing in that revenue.

Jeff Bezos has stated that an emphasis on upselling has added 35 percent to Amazon’s bottom line. He understands that the best time to get customers to buy more is at the point of initial purchase, using techniques like:

  • “Customers who bought this item also bought…”
  • “Customers who shopped for ____also shopped for…”
  • “Frequently bought together…”
  • “Customers who viewed this item also viewed…”
  • “Sponsored products related to this item…”

As a B2B company, you practice upselling when you promote a service plan or training with your B2B product, and cross-selling when you include a totally different software program (e.g. CRM plus invoicing) as a bundled offer.

Lesson 4: Provide deep product information.

In Amazon’s case, when you peruse a particular product, you will see a fairly detailed description, full specifications, tons of customer reviews, and photos and brief descriptions of related products and competitive products. The goal is to give you all the information you need to make a purchase decision. And lest you think this only works for low-priced products, Amazon sells products ranging from a few cents to $1.5 million. Here is an article that lists the 20 most expensive Amazon products in 2019. Bottom line: the company that shares the most relevant and credible information usually wins.

Content is especially important to B2B buyers. As this Martechtoday.com article shows, “The average B2B buyer’s journey involves consumption of 13 pieces of content, including eight vendor-created pieces and five from third parties. Make sure the prospective buyer finds the content they need on your website, not your competitor’s website.

Lesson 5: Buy market share.

Five years after its founding, Amazon was losing over $600 million per year on a net operating basis, and the company took 10 years to start turning a profit. This strategy will not work for all B2B companies, or even most. It requires patience and investors with deep pockets. But when it does work, it works incredibly well.

CRM company Salesforce is a great example of this on the B2B side. Started in 1999, it did not turn a profit until 2005. Not only was the company well-funded, it raised an additional $110 million in its public offering in 2004. Its sole-focus seemed to be grabbing market share, even at an initial loss. Founder Marc Benioff understood that once companies starting using his service and inputting their prospect and customer data, he would retain those prospects indefinitely and reap large profits.

Lesson 6: Practice continuous innovation.

Amazon Web Services (AWS) is a good example of innovative B2B thinking. AWS was started in 2006 to provide on-demand cloud computing platforms to companies, individuals and government organizations. According to this article, “During a 2003 executive retreat at Jeff Bezos’ house, the Amazon leadership team was asked to identify the core strengths of the company. One thing became abundantly clear: Its infrastructures services gave them a huge advantage over their competition.

Today, AWS adds over $10B a year to the company’s revenue.” Every B2B company needs to do its own version of leveraging its intellectual property to drive more revenue.

Summing It Up

I am not one of those consultants who will tell you that you can be the next Amazon (or Salesforce). Bezos had a unique set of circumstances, plus the money, talent and persistence to create a phenomenal success. But you can certainly leverage the Amazon lessons to create your own version of greatness, on whatever scale is best for your B2B company and its stakeholders.

6 COMMENTS

  1. Great summary here, Chris! I can certainly attest to your 1st lesson “Deliver incredible customer experience (CX)” from my years there leading global customer service. We used the term CX to mean Customer Ecstasy and it was paramount — Going the extra mile, obsessing when customers were “irate”, zeroing in on subsequent purchases as confirmation, keeping a chair empty for our customers, and a lot more. Your 6th lesson “Practice continuous innovation” also resonates — off sites at Jeff’s house where we changed directions and a willingness to drop “old” ideas to pursue newer ones, etc. I will share all of your lessons with B2B companies that I know!

  2. Thanks for the comments Bill, especially since you were one of those who created the incredible Amazon CX machine. A lot of so-called “customer service” departments could benefit from keeping an empty chair for customers.

  3. While revenue growth is a much watched metric, it can create management complacency as it masks latent problems. What makes Amazon a fascinating example is that a company can seemingly do “all the right things” for elevating customer experience, and yet not make customers happy. A The Wall Street Journal article on June 9th (Amazon Doesn’t Need No Satisfaction) highlighted the incongruity. The sub-headline reads “Survey finds a drop in percentage of customers happy with the e-commerce giant as sales soar.”

    Some might explain this as being a victim of their own success as consumers convert from brick-and-mortar buying excursions to online, and the company’s logistics system toils to fulfill the demand. But the article says the survey company, RBC Capital Markets, has “shown a steady decline in satisfaction levels for Amazon customers over the past five years (emphasis, mine). In 2015, 87% of customers said they were very or extremely satisfied with Amazon.” In the May 2020 RBC survey, 64% of respondents made the same claim.

    With Amazon’s revenue heading into the stratosphere, it would be easy for the company to dismiss these findings as inconsequential. But I’m certain they’re paying attention. According to the article, “Rising customer dissatisfaction still could hurt Amazon down the road as many of its competitors sharpen their own e-commerce offerings.”

  4. You make some good points Andy. Obviously, it is hard for any company to deliver great service while growing at such rapid rates. Not surprising that even a company with Amazon’s resources should have some issues. You noted that 64% of respondents say they are “very” or “extremely” satisfied with Amazon. As I mentioned in the article, companies should meet expectations routinely, and exceed them when necessary. While Amazon always remains hungry and strives to get better, with a few stumbles along the way, I believe they still do a great job of “meeting” customer expectations. But I do applaud when other companies compete successfully against the giant, despite the big challenges of doing so.

  5. Amazon’s rating per the ACSI have been steady the past 20 years. Low to mid 80s, sometimes more, through 2019.
    https://www.statista.com/statistics/185788/us-customer-satisfaction-with-amazon/

    But 2020 may be a different story, due to the effect of COVID-19:
    “But while users have clearly been spending more time shopping on the e-commerce giant’s site, the sudden surge of new customers brought on by the virus has put a hurting on one of the company’s key metrics: customer satisfaction. And if left unaddressed, that could seriously hurt the company’s growth moving forward, Mahahey said.”
    https://finance.yahoo.com/news/amazon-customers-less-happy-coronavirus-192943380.html

    A short-term dip due to excess demand is one thing. But increasing stories of dominance and pressure on employees are a bigger long-term threat, in my opinion. For that reason, I find myself doing more shopping directly with my favorite brands in recent months.

    Still, I recently had a poor video playing experience on Amazon Prime. Nothing too serious, but a couple of days later I got an unsolicited refund with this message:
    “We noticed that you recently experienced poor video playback on Amazon Video. We’re sorry for the inconvenience, and have issued you a refund for the following rental(s) and amount(s):”

    How many companies would do this?

  6. Bob, your last point is highly pertinent. Amazon is usually quick to take care of issues and their CSRs usually don’t require approval from higher-ups to make things right. I’ve dealt with too many companies where the CSR doesn’t seem to have authority to do much more than tell me how much they appreciate my business (while not solving the problem). Like you, I try to support other suppliers but due to the six lessons in my article, Amazon is often the logical choice.

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