Something popped up on my Linkedin feed today, and I am glad it did. It was a clip from the 1999 interview of Jeff Bezos. I was watching that interview after a long time today, and the first thought in my head was how relevant Bezo’s words were then, as they are now, and as they will be for years to come.
…his nearly unmatched focus on customer service…
That is how a CNN profile on Jeff Bezos started. This line came up in the first ten seconds of the segment. That is how driven Bezos is to customer service. The first words from the Amazon CEO in the segment were “We know customers like low prices, we know customers like big selection, and we know customers like fast delivery”. But what was even more important was the immediate next words:
…and those things are going to be true 10 years from now, they are going to be true 20 years from now. So you can count on those things, and we can put energy into them…
You pick up a point on Amazon’s timeline, and you would always find “great customer service” as the cornerstone of everything they have done. That is what makes great companies. Customers that swear by the service they get from the businesses they transact at. And it is not just a talking point for Bezos or Amazon, it seems to be so hard etched in their DNA and the core fabric of who they are that this comes up more frequently than anything else.
This segment aired shortly after Bezos bought The Washington Post in a $250M deal, and he is asked about it as well, and when talking about it here, once again, it gets down to customer service.
What has worked at Amazon is focusing on the customer, putting the customer first — which is easy to say but difficult to do.
Now. This interview is from 2013. But that is not how this whole story started. It started because I reran into an extremely old Bezos interview — one that took place in 1999. And if you look at it, the ‘customer service obsession’ was still there.
At that time, Amazon had just over 3,000 employees. The segment starts with that info and that Amazon (at that time) had over 4 million sq. ft. of distribution center space. And in the immediate next line, Bezos says:
And that is something I am very very proud of. Because with that distribution center space, and half a dozen distribution centers around the country allows us to get product close to customers so that we can ship it to customers in very timely way.
Everything at Amazon is about putting the customer first.
What all would a customer want from us?
How much of a variety would he/she be looking for?
What details could help the customers make the most informed purchasing decision?
What challenges could a customer face after placing the order?
If the purchase is not up to the expectations, what would the customer be expecting from Amazon?
The answers to a lot of these questions seem quite intuitive today. But they weren’t so when Amazon started. A lot of what they were doing fell under the definition of unchartered waters, and it was asking questions from a customer’s perspective that helped them find the answers to these questions. Did they get some answers wrong? I am sure they did. But they got it right more often!
FOCUSING ON CUSTOMERS HELPS MAKE GOOD BUSINESS DECISIONS TOO
And it is not like Bezos doesn’t know what he is talking about. The enormous wealth Amazon and Bezos have amassed over the years is a testimony to that. Amazon has never shied away from experimenting with bold ideas, and a lot of them have failed, and yet the business is stronger than ever before. And that is primarily because of their intense focus on customer service. It is that focus on customer service that helps them with their strategic decisions as well. Take Amazon devices, for example. Bezos in this same segment talks about them, and it's quite interesting.
Bezos claims that Amazon sells the device at break-even, and there is no effort to make money on the sale. Put that in contrast with the hundreds of dollars Apple makes on sale of each handheld device. Why? Because, in his view — customers like low prices, and by keeping the prices low, he is opening up the possibility of the device reaching to an exponentially higher customer base.
But the business is still focused on making money off of these customers. So, Bezos adds that they hope to make money when the customers use the devices, not when they buy the devices. So, theoretically, you are aiming at making money by getting more and more people to use your hardware.
Another thing that’s interesting here is that Bezos is talking about the new tablet Amazon had launched at the time. But if you just read it again, it seems applicable to every single device Amazon has, whether it is the TV stick, Echo or Kindle.
WEWORK MAY CALL ITSELF A TECH COMPANY. AMAZON NEVER CARED IF IT WAS ONE
In a time when companies are falling over themselves to call themselves a “tech company”, Bezos in the 1999 interview completely bashes down on the notion — “It doesn’t matter to me if we are a pure internet play. What matters to me is that we provide the best customer experience.”
And when pressed down on the topic by the host bringing in investors into the fold, Bezos simply says that “they (investors) should be investing in a company that obsesses over customer experience”.
If you ask any investor who backed Bezos and Amazon in those early days, I am sure they would all be thankful for this obsession. Just watch this 8 min video and see how every single road leads down to “customer experience”.
In the long term, there is never any misalignment between customer interest and shareholder interest.
INTERESTING FUN FACT
Go watch that 1999 interview once again. If you notice, when Bezos is talking about customers in this clip, he is referring to the company as “Amazon dot com” and not “Amazon”. See what 14 years can do to a company identity. But that obsessive focus on delivering the best customer experience — that has always been consistent at Amazon.
And that is what makes them the best at what they do.