Amazon Prime: How CRM is The Secret Behind Amazon’s Success

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The world of online shopping is market-driven by massive competition and constant changes. Amazon is still the preferred one-stop-shop destination for millions of loyal customers worldwide. But how did they do it?

The World of Amazon and Amazon Prime

We all know Amazon and its related service Amazon Prime. We’ve all shopped there. And the reason we return to their website, time after time, is because it’s easy. Their one-click ordering makes it ultra-convenient to shop for a new product (or three) that you may not need. And Amazon Prime is a lifesaver when you suddenly remember that Mother’s Day is tomorrow. We have all been there, right?

The simple truth is that we continuously return to the alluring world of Amazon because it’s easy. Amazon remembers your past purchases better than you do. It can also recommend products you might need. Storing your card details and information for an effortless checkout. This results in a streamlined buying process, giving clients exactly what they want – in the easiest way imaginable.

Nonetheless, most people are not fully aware of just how massive Amazon actually is. In fact, it’s estimated that more than 85% of the world’s products may soon be available on Amazon. Few other online retailers can compete with that. Yet, the numbers only increase: of every $1 Americans spent online in 2015, Amazon managed to capture 51 cents. Furthermore, it was recently revealed by Jeff Bezos, that 25% of all American households now hold an Amazon Prime membership. According to Bezos’ estimations, this is a number that will most likely rise to 50% of households soon.

With this in mind, we can’t really do anything but agree with Bezo’s claim that “What’s really happening out there is that Amazon is shredding the competition. And the competition just doesn’t know what to do about it”.

The Basics of CRM

Success is no accident, as the great footballer Pele once declared, and this is especially true for Amazon. Founded by Jeff Bezos in 1994, the original vision was to build a virtual shopping place for book lovers. Wise investments and a fool-proof business plan helped navigate the young company safely through the dot-com crash. And Amazon is now the largest internet retailer in the world as measured by revenue and market capitalisation. And a lot of this success can be attributed to their dynamic CRM system.

But what exactly is a CRM system?

Short for Customer Relationship Management, CRM software is the key to managing and synchronising your business communication and information. In today’s world, CRM is no longer considered a trend, but rather a standard requirement for most businesses. While CRM has been around since the 1990s, it has gone through a massive development over the recent years. Today’s CRM systems can synchronise and group your external contacts. They can also give employees up-to-date information on customers, and ensure that they have the best possible experience when dealing with your company.

More recently, CRM developers have added enhanced features like analytics and management modules, resulting in the systems that we have today: a database of prospects and leads that you can access from a range of devices. Used wisely, it can open up communication between you and potential customers. And it can build lasting relationships between companies, teams and individuals. Most importantly, different teams need different views. You need to be able to fine-tune your CRM system to the needs of your business.

As Amazon knows rather well, a CRM system is not a one size fits all solution.

Read More: Choosing an Open Source CRM Solution.

Amazon and the Power of CRM

User friendly. Great selection. Convenience. If you ever find yourself thinking of Amazon, chances are that these words immediately spring to mind. In fact, these factors are so imperative to the company’s success that it would struggle if it no longer provided a user-friendly website, smooth communication operations, and its impressively high level of data storage. As you might have guessed from the headline, one of the secrets behind this is a good CRM system.

Financially, Amazon is operating with nearly unlimited resources. Instead of searching for the best software system on the market, Amazon invested time and money building their own in-house system. While their software is certainly unique, thanks to enhancements and innovation in the marketplace, it’s now largely similar to most other good CRM systems on the market. It actively captures customer data – for example, all previous purchases – in order to give customers an accurate and streamlined shopping journey. Moreover, the customer journey involves basically no human interaction at all. In just a few clicks, you can access your previous orders, track your parcels or update your details. All of this reveals a system which is both quick, profitable and efficient – for Amazon and their clients alike.

Neatly Organised User Interface

If you are only to take one lesson from this case study, let it be the following. The user interface is everything. Take a peek at Amazon, and you will find that their website is very clean. It’s streamlined, easy to understand, and easily searchable. The images are high-quality, descriptions are detailed and accurate, and prices and reviews are plainly visible. Everything is neatly organised into departments and categories. And the checkout process is clear as day.

In short, everything is intuitive

As a matter of fact, shopping on Amazon is so easy that anyone can do it. And that’s one of their biggest strengths as a company – accessibility for all. Their overall focus on customer experience, or “customer obsession” as they themselves call it, is one of the major reasons why they consistently outperform other online retailers. As the leading Retail Analyst at Barclays, Paul Vogel, puts it: “It’s selection, service and convenience. Ultimately it’s how easy it is to use their interface. And Amazon’s got all this stuff already. How do you compete with that? I don’t know, man. It’s really hard.”

Amazon won by investing in a CRM system that can grow with their business. You see, Amazon is not just Amazon anymore, instead they have evolved into a provider of everything. Prime members will find a Prime Video selection that seriously challenges providers such as Netflix and HBO, their Alexa is a serious competitor in the AI market, and they’re financial investors in up and coming tech firms. Not to mention that they’re the world’s largest provider of cloud infrastructure.

Amazon’s dynamic system allows them to constantly reinvent themselves. It doesn’t give restrictions, rather it lets them easily adjust to the market plan.

Personal Data Storage

Most CRM systems will be processing massive amounts of data in their data warehouse every single day. Amazon’s CRM, is no exception. It is constantly gathering information through customers’ searching and browsing, data mining, their wish list and so on. Whatever you decide to buy – or not buy – you are providing the system with information. This information is then analysed and used to tailor your experience on Amazon and their service accordingly.

If you want to buy something at Amazon, you will need to set up a personal account. It’s through the said account that Amazon can track your purchases and your browsing history. This allows them to tailor marketing campaigns and email campaigns based on products you will probably like. What’s more, you can store payment details and personal information in your private account. This dramatically speeds up the checkout process. The next time you make a purchase – anything you could possibly want is only a click away.

Anyone who uses Amazon regularly will notice that they are constantly suggesting products you might be interested in. Impressively enough, most of these suggestions tend to be quite accurate. Frequent customers will also appreciate their “customers who bought this item also bought” feature. Social proof is a powerful tactic that consistently boosts Amazon sales. The secret to this feature lies in its powerful CRM.

Customer Interaction

Your personal account on Amazon ensures that you rarely have to reach out to customer support. Update your card details? You can do that yourself. Cancel an order? You can do that too. In the rare cases where you do require to speak to support, you will find that it’s dealt with quickly. This is because the CRM software allows them instant access to your information. In other words, Amazon is stress-free for both customers and its employees.

Another feature that makes Amazon so successful and trusted is the focus on peer reviews. Under every product, you can find a section where other buyers have reviewed the product you are looking into buying. All buyers are verified, and they are freely sharing the good, the bad and the ugly about a certain product. A recent article by Forbes reveals that 88% of consumers trust online reviews just as much as personal recommendations. In other words, if your online store is not offering user reviews, you are alienating 88% of your buying population. A bad review may stop someone from ordering a product. But it could still enhance your reputation as a trusted retailer.

Amazon is only one of many examples of how a good CRM solution can transform your business. We understand that comparing CRM providers is a vital, but time-consuming process for any business. But don’t worry – we are here to help you.

At YourShortlist, we offer impartial, expert advice on a wide range of IT projects, including identifying your next CRM system. And we always do it for free.