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Simple Steps to Amazing Growth and Clarity Client Success Learn to Track ROI Book Review: ‘Leadership in Turbulent Times’ Learning New Skills With Lynda.com
LESSONS IN BUSINESS GROWTH FROM JEFF BEZOS The World’s Richest Man
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Meet Lucy Hart
Making a Difference With a Pair of Shoes
member who doesn’t have Prime. The short-term loss on each order is worth it in order to capture and keep the customer. The primary focus for both Bezos and Amazon has always been customer experience, retention, and growth. Notice that growth and new customers come after customer experience and retention. By prioritizing experience and retention, Amazon can boast a 94 percent retention rate on year-one Prime members and a 98 percent retention rate on year-three Prime members. That is nothing short of amazing. Bezos’ focus on creating a great experience each time someone comes to the site and getting people to come back over and over again is what allowed him to spend nearly limitless money on marketing to acquire customers. I just hired a new team member to manage/monitor some of our ad spend. At one of the first meetings, this person asked me what the monthly budget was, and I responded as I always do: The monthly budget is unlimited, as long as you can get me new customers within this range. Once you have a system down that creates an amazing customer experience and you can keep the new customers you get, then you can spend crazy amounts of money on customer acquisition. Here’s the problem: Continued on Page 2 ...
a bunch of investor money) got reinvested in the business. Bezos and the executive team didn’t fly first class; that would have been a waste of profit. They flew coach to meetings. If they wanted to upgrade to first class, it came out of the executives’ own pockets. I saw firsthand how much impact that extra expense can have when you’re not careful. One time, I was days away from closing a deal to buy another company, but for years, that company’s owner had sucked out ALL the profit from the business. Everyone and their mother was on the payroll in some way, shape, or form, and there was no money left over to reinvest. You have to have money to make money. At every Amazon executive meeting, there is always an extra seat at the table for the customer. In those early days, Bezos would often point to the seat and speak for the customer. His No. 1 priority was customer experience: what happened when someone placed an order, what happened when they received the order, what happened when there was a problem. At this point, two-thirds of American households have an Amazon Prime membership. We’re now spoiled with free two-day shipping! Even though Amazon loses money on the shipping costs for Prime, the average Prime customer spends 54 percent more per year than a
Have you ever marveled at the success of Amazon and Jeff Bezos? In 25 years, Bezos has built Amazon into the largest online retailer in the world. We all know Amazon is huge, but did you realize that 49.1 percent of all online transactions right now are done through Amazon?
The top 10 list of online retailers and their percentage of market share is pictured on
Page 2. Take a look at that list. These are massive companies. Apple, eBay, Walmart, and Home Depot round out the top five. If we add up market share for all other retailers on the list, they don’t even manage half of what Amazon does. It really is amazing to see what has been built in just a few short years, and Bezos’ personal success has been nothing short of amazing. What causes this level of success in such a short period of time? How do you build a company and wealth this fast? If I told you I had all the answers, I’d be lying, but I have studied both Bezos and Amazon, and I have come up with a number of conclusions that are valid for any business. Bezos wasn’t in it for the short term. Most entrepreneurs are trying to get rich yesterday, but that wasn’t the plan at Amazon. All profits (and
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