The key factors that changed the fortune of Amazon!
A lesson to learn…
Today, Amazon is known as one of the most renowned E-commerce website globally. But it was also facing many issues in its initial days. Later on, they manipulated technology to rescue themselves and turned out to become a popular brand name round the globe within a few years. While going through Amazon’s story, I was basically motivated by their CRM based optimization strategy which resulted in their profound success. It is actually a very insightful lesson to learn for any aspiring Entrepreneur.
Amazon adopted a CRM based strategy which included intuitive features that effectively influenced the quality and quantity of Leads simultaneously.
- Collection of Customer Data.
- Recommendations based on analytics data gathered from the User’s previous queries.
- Encouragement to sign up for the Amazon Profile.
- Leverage to Profile based Customers.
- Invest on New Trends rather than following the already established ones.
When we take a brief look over these features, one thing is common in each one of them. They didn’t required any budget specifically to implement such optimizations. These tactics were typically designed to cater to the shoppers who were actually interested to in shopping on-line. They offered lucrative deals just for signing up for Amazon profile.
They also encouraged Customers to benefit from the special offers which were restricted to Amazon profile. By doing so, they ensured that the Customer gets tempted to shed his inhibition regarding on-line shopping. They implemented the collected data for even better usage. They started to offer product recommendations based on each profile individually based the Profile Data.
When they did this, genuine customers did not hesitate to engage with Amazon. Further utilizing the data for an intuitive accessibility turned out to be the Master Stroke for them leading to a balanced product exposure which suits a customer’s individual choice. With the help of these intuitive tools, they ensured that a customer searching for any specific product could reach the product with ease. Simultaneously, he also gets to have a look over other relevant products that not only added to customer’s convenience but also made sure that he remains interested in purchase.
The comparison between E-bay and Amazon is the specific indication of the fact behind this successful masterstroke of Amazon. When we look at the visitor stats there is no significant difference, but when we look at the Revenues, you find major difference in the figures of both the Websites. Interestingly, people have spent more time on E-bay and yet the Sales of E-bay is far less in comparison to Amazon. It clearly shows the impact which Amazon’s CRM optimizations had on the approach of the Visitors between the two Websites.
Amazon’s revenue for the year 2015 was 44% more than their revenue of previous year. Their cash flow increased significantly by 25%. Since the five years of adoption of these customizations, Amazon has consistently showed an annual growth rate of more than 150%. These figures challenge the rhetorics of conventional marketers and a tight slap to the faces of those critics who were against their concept of ‘Software as a Service (SaaS)’. Amazon was determined and confident and therefore went through with it. Ultimately, it reaped immense profit from the same tactic which has forced many of those critics to follow the same themselves. Incredible results changed their perspectives. Even if we consider Amazon Web Services (AWS) alone, it has generated a revenue of more than $500M and is expected to cross the $1B mark very soon.
This is a perfect example of exhilarating success and reaping unbelievably high revenue with the assistance of technology. The good part is that this thrust required no expenditure as was the case in traditional marketing. To everyone’s surprise, Amazon also went for full forced Promotion tactics after it started to gain comprehensive profit. This helped Amazon in exploring maximum possibilities and attain an extensive domination in the field among all E-commerce Websites.
After a detailed analysis, we found these striking aspects of their strategy which propelled them to such lucrative success –
1. Reaching out to the Customers before they turn into Leads
It is critical to understand that not every person that participates in a marketing campaign is not necessarily interested in the product and sadly, most Companies don’t stress on this ‘Conversion Potential’. A successful business can be created with proper planning even if it has lesser resources, to begin with. The Internet is the easiest mean of communication and if business utilizes it to customer’s convenience, it rarely goes wrong.
- Offer Convenient Accessibility to Products through Call tracking.
- Collect User Data Information in an engaging manner without forcing.
- Entice, Engage and Impress with a proficient CRM.
Budget, either small or big, depends upon the scale of Business. Even if you don’t have a hefty budget for marketing, you do not need to stretch it unnecessarily. The present age of technology provides ample dimensions for forming a connect with interested people and as an entrepreneur one apparently has no reason to miss out on this golden opportunity. The e-commerce setup provides the effective base for startups to mark their footprint in the market. The Internet ‘is and will’ get larger as a platform because it exhibits an ever growing public dominance. And if used appropriately, it is sufficient enough to build a large loyal clientèle within months.
2. Use analytics and Prioritize ‘Hot Leads’
It is critical to understand that every member of the audience is not there because he is interested in your product. I can’t understand why most Companies ignore this natural truth. Companies often invest and form large Sales team to target every probable Lead. When you do so, you are ignoring a practical truth that every lead can’t be converted because they don’t require it and therefore, most of the Leads eventually turn out to be ‘impotent’ or non-productive. It is much better to hire an assorted sales team and specifically prioritize on those ‘Hot Leads’ who are closely examined and exhibit better potential to get converted. Amazon followed somewhat similar strategy.
A Business should rather leverage on the generation of healthy Leads and rather than convert the leads successfully. Because if you have healthier Leads, it is certain that Lead Conversion will improve automatically. So, a business should –
- Plan the Sales strategy using analytics.
- Engage pro-actively to Customer Satisfaction.
- Sort the genuine leads or ‘Hot Leads’ on the basis of analytics data.
But it is really interesting to note Businesses ignoring the quality of Leads and then, blindly form a large Sales team without concerning the potential prospects of conversion. They set up targets and throw Sales team on every lead. It is no wonder that it leads to poor conversion rate. This ‘Hit and trial method’ is always risky, whether it is life or Business because it wastes more time and effort and yields lesser than the genuine expectations of Business. When it fails, Business eventually loses its virtue in a market.
If you know how many leads are productive, you can adopt a sales team that is actually required to target the Leads effectively. Therefore, a small but skilled team works on limited leads which are genuinely interested in purchasing your product.
3. Smarter Targeting, Efficient Conversion
Sadly, businesses often commit this mistake of wasting their time and money on irrelevant or non-productive lead. They set big teams without determining the potential outcome which inevitably results into pathetic ration of lead conversion. Meanwhile, those genuine leads slip away while your Sales Team is engaged with dead Leads. It is better to optimize and then target the Leads. Give sufficient time to those important Leads which are likely to slip away in case response is delayed.
- Improvise your Sales strategy on the basis of User requirement.
- ‘Strike when the Iron is Hot’ – Interact with the Lead when he is wants to do so. It is vital to build ‘Trust and Belief’ in the mind of User.
- Give direct access to users for instant connectivity on his own choice.
This is actually an Incredible Way to explore Business Growth Like Never Before!
Why don’t we track credibility of a Lead? Should we ignore the fact that Lead Conversion deteriorates by doing so? It would be better if we emphasize on qualitative Lead Generation rather than quantitative deadlines? Such campaigns are usually thwarted and bashed away by the public because it would irritate even us, forget the common people. This generally forms a negative perception on the back of the mind of most individuals including us. And Sales, as it ultimately rests on the powerful shoulders of a strong marketing strategy. Thus sales are down, the Company suffocates and keeps fighting just for the sake of survival.
There are various instances when Sales do not match the extent of expenditure done on marketing. This is a clear indication of marketing strategy going wrong. An expensive marketing strategy is bound to backfire if it is unsuccessful in bringing a noticeable thrust in the volume of Sales. Every marketing strategy is vulnerable to collapse if it receives a cold initial response. But to be honest, it is not correct to blame the blunder on Marketing Strategy alone.
There are various other aspects which are also significant in Lead Conversion. While Marketing is supposed to bring the audience, there still lies the mammoth task of convincing the customer to purchase your service. And here, things tend to get nastier for the inexperienced entrepreneurs.
While it is risky for big budget companies too, but they can afford a loss on marketing investments due to their prior financial foothold. They are more courageous to take such risks because they know that it pays off big-time if it ends up as planned. But average startups are bound to follow a moderate string of budget and therefore they are under immense pressure to succeed because they don’t have an established financial foothold.
Frankly, expensive marketing tactics are influential but only if they are carried out at an extent where you go all guns blazing on a number of platforms irrespective of budget regulations. Access to the electronic media including Television, Radio, Print Media, Social Media Circles, Digital Advertising etc consumes a big chunk of money, and developing Businesses can’t afford to take such expensive risks with no assured recovery.
Even if developing businesses try, it won’t be able to leverage it because of budget limitations. Financial Flexibilities have always been a compulsion in the Traditional space of Marketing. It is extremely difficult for a Developing Business to make the cut, conventionally.
Growing Business within Limited Resources is a necessity!
This question haunts many Entrepreneurs. There is no precise answer to this question. And to be honest, there can’t just be a single complete answer to it. Strangely, there are certain actions that always help in growing a Business. After a quick comparison of data, I found a few interesting stats which can really boost business growth under minimum expenditure. And it is not surprising to see a gradual influence in the Volume of Sales. Thus Business grows exponentially.
This clearly marks the fact that Sales aren’t necessarily dependent upon Marketing. The best thing about this process is that it is rooted on Basic Principle of Business i.e. Profitability. To Sell more products in limited investment naturally, increases the Profit per sale. And practically, Profitability is one major factor in determining success of a Business. So it enhances your roots. Doesn’t it?