Take a Tip from Bezos: Customers Always Need a Seat at the Table A close study of Amazon.com founder Jeff Bezos reveals one of the world's most innovative companies is rooted in one of the oldest ideas. The customer comes first.
By Bob Thompson Edited by Dan Bova
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When starting a new business, it's understandable that the main focus is to develop an innovative product or service that will cause the market to stand up and pay attention. It's also clear that entrepreneurs need passion and endless supply of energy to create a new business from that innovation.
Related: Stop Losing Money and Focus on Customer Service (Infographic)
But a good idea and passion are not enough to sustain a company in the long term. Groupon is a cautionary tale. Founder/CEO Andrew Mason was fired for a plummeting stock price and poor business performance just fifteen months after the second largest IPO in US history. In Mason's resignation message, he imparted this "wisdom" on employees: "Have the courage to start with the customer."
Mason learned, too late, what Jeff Bezos always knew. He founded Amazon.com with the mission to be the "Earth's Most Customer-Centric Company." Interestingly, for several years he resisted attempts to define precisely what he meant by "customer-centric," according to Bill Price, former Amazon.com Global VP of Customer Service. Eventually Bezos said he meant, "Listen to the customer and invent for the customer."
These days, we're all familiar with Amazon.com and enjoy its effortless buying experience for an ever-increasing array of products. Bezos, in a 2011 video, elaborated on his approach:
1. Obsess over customers. "If you're truly obsessed about your customers" Bezos says, "it will cover a lot of your other mistakes."
2. Invent. "You need to listen to customers, they won't tell you everything. You need to invent on their behalf. Kindle, EC2 would not have been developed if we did not have an inventive culture."
3.Think Long Term. "Most initiatives we undertake take 5 to 7 years before they pay any dividends for the company."
Related: 3 Ways to Grow Your Business By Focusing on the Customer
Customer-centricity is not a black-and-white proposition. Most companies can claim to be customer-centric to one degree or another. Companies generally evolve (and sometimes devolve) through four stages of development under the leadership of the CEO.
All four stages are at work at Amazon.com. Providing personalized and relevant recommendations (stage 1) is one crucial feature at the digital shopping site. But it is Bezos' relentless focus on customer-driven innovation (stage 4) that sets Amazon.com apart from 95% of companies. Bezos has said that "inventing and pioneering requires a willingness to be misunderstood for long periods of time."
In the early years, Bezos was criticized for allowing customer reviews because negative reviews would detract from Amazon.com's job to "sell things." Bezos held his ground, because: "We don't make money when we sell things. We make money when we help customers make purchase decisions."
In 2005, CustomerThink gave Amazon.com a customer-centric leadership award. In an acceptance letter, Craig Berman, Amazon's director of platform and technology communications, said: "It is simply in our DNA to approach our business by starting with the customer and working backward, and for the past ten years we have stayed laser-focused on this core principle."
Amazon.com keeps innovating to serve existing customers by expanding what it sells and how consumers access its content (e.g., Kindle). It has also been a pioneer into new markets like cloud computing with Amazon Web Services.
Bezos is famous for leaving an empty chair at the conference table and letting attendees know it's occupied by the "the most important person in the room" – the customer. He backs up that symbolism with an array of metrics, 80% of which relate to what customers care about. Customer-centric business leaders excel at institutionalizing these five habits:
1. Listen to what customers value and seek their feedback on their experiences.
2. Think objectively to make sound, fact-based decisions.
3. Empower employees with the resources they need to please customers.
4. Create new value for customers, without being asked.
5. Delight customers by exceeding their expectations.
Launch your business with an innovative offering, be passionate about what you do. Just don't forget that for long-term success, customers always need a seat at the table.
