Content Marketing Today

Amazon.com Secret: Great Content + Great Customer Service = No Need to Advertise

What explains Amazon.com’s phenomenal success?  Amazingly great content marketing has a lot to do with it.

In a January 5 NY Times article about Amazon.com that was prompted by an extraordinary customer service experience, columnist Joe Nocera opens with the sentence: “My Christmas story — the one I’ve been telling and retelling these last 10 days — began on Friday, Dec. 21.”

If ever there were a perfect example of content marketing driving positive word-of-mouth around the world, this is it.  What began as a story that he told friends and family expanded into a long article that examined exactly what motivates Amazon.com to be the customer centric powerhouse that it has become. 

The article notes that legendary Legg Mason investment manager, Bill Miller, said:

“Amazon has really had only one stated goal since it began: to be the most customer-centric company in the world.”

Amazon.com CEO Jeff Bezos explains the why of this in a recent interview on the Charlie Rose show, quoted in the article:

“They care about having the lowest prices, having vast selection, so they have choice, and getting the products to customers fast,” he said. “And the reason I’m so obsessed with these drivers of the customer experience is that I believe that the success we have had over the past 12 years has been driven exclusively by that customer experience. We are not great advertisers. So we start with customers, figure out what they want, and figure out how to get it to them.”

Many of you may remember that Amazon.com decided to kill all its advertising in 2003.  What I didn’t know at the time but the article makes clear– this was a trade-off to support the cost of providing free shipping.  Financial analysts thought Bezos was crazy at the time. He was simply following through on his customer centric mantra, believing that providing an extraordinary customer experience would continue to accelerate positive word-of-mouth that would do more than advertising ever could to grow the company.

From the perspective of the financial analyst community this was a crazy decision because unlike Bezos, who thinks long-term, they think short-term: “What Wall Street wanted from Amazon is what it always wants: short-term results. That is precisely what Dell tried to give investors when it scrimped on customer service and what eBay did when it heaped new costs on its most dedicated sellers. Eventually, these short-sighted decisions caught up with both companies.”  In fact, it’s possible that Dell will never fully recover from its customer service debacle.

While Dell was stiffing  customers, Amazon.com has been coddling theirs. In the end, doing what was right for the customer time after time, has paid off on the bottom line.  Their margins have increased from a measly 3% to a solid 6%.  They are now consistently profitable.  And, according to the article in their most recent quarter, their average customer was spending $184 per year on the site–that’s an increase of more than 20% from the same period in 2006.

Author Nocera concludes, “As for me, the $500 favor the company did for me this Christmas will surely rebound in additional business down the line. Why would I ever shop anywhere else online? Then again, there may be another reason good customer service makes sense. “Jeff used to say that if you did something good for one customer, they would tell 100 customers,” Mr. Kotha said. I guess that’s what I just did.”

Here are some the key takeaways from this article:

• Amazon.com’s obsession with its customers ultimately prompted this New York Times article.  The article, in turn, will have a marketing impact well beyond what traditional advertising might have generated.  Amazon.com’s cost to get the article written = zero dollars. 
• It is obvious that no public relations firm had a hand in placing this article in the New York Times.  That means that there was no incremental public relations expense either.
• Traditional marketers go on and on about a company’s brand equating to the sum total of customer experience.  Much too often, that’s just a lot of blather.  In the case of Amazon.com it’s the reality.  Customers trust Amazon.com. That makes for one very powerful brand.  
• Amazon.com is all about content marketing.  Its website makes it easy to buy by providing a wealth of information about books and a host of other products and services.  The article notes that 52% of its customers do all of their product research using just Amazon.com before they buy.  That is an Incredible level of trust.
• Bezos does not describe what they do as content marketing.  But as he describes their approach to their customers, it is clear that they have a content marketing mindset: “We are not great advertisers. So we start with customers, figure out what they want, and figure out how to get it to them.”  Understanding your customers and figuring out how to make their lives better or how to make them more successful–that is at the heart of successful content marketing.
• Although one analyst suggested that Amazon.com had foregone the $600 million worth of shipping revenue by providing free shipping to its best customers, it was able to eliminate a marketing cost that represents a huge percent of revenues for most major consumer brands.  For example, in 2006 Coca-Cola spent $1.9 billion on advertising which is 8% of its revenues.  If Amazon.com were spending at that level, it would’ve been shoveling $1.2 billion out the back door. 
• And, of course, I am expanding word-of-mouth with this blog post as well. I’m guessing there must be at least a dozen other blog posts that comment on the article and on Amazon.com.  Doing right by your customers really pays off.