How does Jeff Bezos’ empty chair help Amazon become a $ 1,600 billion company?

Launched in 1994, Amazon has grown from a small online bookstore to the world’s leading e-commerce giant. November 2020, the company based in Seattle, Washington (USA) launched a pharmaceutical delivery service, marking the first step into the medical field. Now, Amazon aims to provide basic health care to employees at large enterprises.

According to many marketing experts and former Amazon employees, the customer obsession of Jeff Bezos – the founder and CEO of Amazon, is a key factor in the success of this empire. With its strategy of going back to the end product to find a way to meet the specific needs of its customers, Amazon has been successful in forecasting customer needs and tailoring services to satisfy them.

Currently, Amazon, with a market capitalization of around $ 1,600 billion, is serving more than 150 million premium paying customers globally and has 1.2 million employees, according to Business Insider.

The ‘reverse’ process to find a way to match your customers’ needs

One day in 2011, Ian McAllister, former head of Amazon’s Alexa and Smile audio devices, came to CEO Jeff Bezos with a bunch of new ideas. At Amazon, meeting like this means presenting to Bezos an internal press release or a document covering a prominent problem the customer is facing and explaining what ideas are featured. How will update solve that problem.

However, not all ideas are successful. Bezos would point out a mistake if the report didn’t clearly explain the problem to the customer. If it is not possible to present the customer’s problem in an attractive way, then it may not be a problem worth solving.

Amazon “goes back” to develop products and services that satisfy the needs of customers – Photo: Getty Images

This process, called “backward,” has been adopted by McAllister’s team to develop Amazon Smile – a customer-per-order charity support platform. While it takes many steps to send charity money directly to organizations, Smile allows Amazon shoppers to donate money for the charitable activities they care about with each order at no extra cost.

“To me, this is a clear example of how Jeff Bezos is obsessed with customers,” McAllister told Business Insider. “It’s not just words. From then on, every press release that I or any member of my team writes, has to include a presentation about the client’s problem, and this too. is the topic discussed first in each meeting “.

In a new book titled “Invent and Wander”, Jeff Bezos affirms an obsession with customers that helps Amazon predict and deliver nearly every item consumers need to buy every day.

Amazon’s move into the healthcare sector is the most recent example of this strategy. In December 2020, Amazon launched Amazon Pharmacy, a free 2-day prescription drug delivery service for members who sign up for Prime. Now, the company plans to provide direct medical care to employees at large companies with Amazon Care.

SEAT SEAT FOR CUSTOMERS IN THE MEETING ROOM

To understand why Amazon’s ambitious moves have been so successful, it is important to take a closer look at its customer-centric strategy, which revolves around addressing all customer needs and problems.

“Because you obsess with customers, you will find ways to satisfy them,” Sunil Gupta, professor of business administration at Harvard Business School, commented in a recent post on the program “IdeaCast. “.

According to Mr. Gupta, most companies advertise as having a customer-centric business model, but in reality most of them focus on improving services instead of thinking about how the customer will spread. test them.

For example, a gas company may offer additional services at its gas station without considering that most customers want to avoid going to the gas station. By contrast, Amazon has taken its customer-centric strategy to the next level, says Gupta.

Bezos often puts an empty chair in meetings and asks employees to imagine a client sitting there – the most important person in the room. This is the reason Amazon employees started product development by writing in-house press releases.

Amazon boss always puts an empty chair in the meeting room – Photo: AP

“Even in the absence of a product, customers want something better and the desire to satisfy customers will guide us to find what they want,” Bezos wrote in his annual shareholder letter. 2016.

Another example of Bezos’ consumer obsession comes from developing the Kindle e-reader. The Kindle Paperwhite version of the e-reader has undergone several updates since its inception in 2007.

Like all Amazon inventions, the Kindle started with an internal press release that presented a problem: More and more customers were switching from reading paper books to electronic devices. And Amazon wants to be a pioneer in this trend.

Despite never having any experience with hardware, the Amazon team spent three years learning how to build Kindle, Gupta said. Bezos wants the Kindle to be a simple device even for those who are not tech-savvy, that is, you don’t have to connect to a computer to download content. At the time, although other e-book-enabled devices required a computer connection to download books, Amazon pursued a transfer of data over wifi so that customers could download books from anywhere. .

This was not Amazon’s smoothest project, but it was incredibly successful. According to Wired, the Kindle was out of stock within six hours of opening the first batch. Currently, Amazon accounts for 60% of global reading device sales, according to data from Euromonitor.

DO NOT STOP FIND HOW TO DISCOVER CUSTOMERS

In recent years, Amazon has continuously invested in the food sector. In 2017, the company acquired the grocery chain Whole Foods for more than $ 13.7 billion, or $ 42 per share – 27% higher than the closing price of the code at that time. In August 2020, Amazon opened its first Amazon Fresh grocer in Los Angeles to serve only “price-sensitive” customers.

According to Gupta, when customers start to look to Amazon to buy food more often, they tend to buy many other products on Amazon. This shows the success of the approach towards creating an ecosystem for consumers, giving them the experience of shopping in one place without having to think about elsewhere.

The same logic applies to Amazon’s decision to expand into the pharmacy, said Scott Galloway, professor of marketing at New York University.

“In my opinion, the fastest growing medical company in the world is Amazon,” Galloway told Business Insider.

He believes that Amazon is the only company with the resources to compete with the industry leaders in the medical field. The inbuilt manufacturing and shipping systems allow Amazon to produce and deliver pharmaceuticals at lower prices than their competitors.

With the plan to provide online medical services to employees at Amazon’s major companies, technology plays a key role. Smart cameras, smart speakers, and purchase history data can provide valuable information about a customer’s health, nutritional habits, marital status, age and whereabouts. Alexa and Prime also allow customers to book appointments with just a few clicks or voice commands.

Amazon is constantly expanding its product and service ecosystem to satisfy all the everyday needs of customers – Photo: Getty Images / iStock

This existing ecosystem allows Amazon to easily know what medical products a customer might need and deliver it to their home.

In other words, Amazon’s customer-centric approach is now being automated. So when Amazon customers search for conventional drugs, they don’t need to go to the pharmacy anymore. Instead, they can find it right on Amazon without thinking much and trust it to be cheap, fast, and convenient.

“The biggest opportunity in the health sector is savings. But it is not saving money, but saving time.” Galloway said.