SYS210 TMA Case Study

Amazon CRM

By Rob Binns | Senior Writer | Updated: 20 April 2021

Amazon. No, were not talking about the South American rainforest. But when it comes to sheer size, we might as well be. Amazon is an ecommerce goliath a household name where you can buy almost anything you might want or need, and have it delivered the next day. So, whats been the secret behind its massive success?

Amazons world class Customer Relationship Management (CRM) strategy, of course.

Amazon is growing every year. In Q3 2020 alone, it reported a colossal $96.15 billion in net sales a 37.4% increase from the same period in 2019. Its founder Jeff Bezos is on track to be the world's first ever trillionaire although the company itself surpassed that particular milestone a year ago. So just how did Amazons CRM take it from its humble roots as a garage-based online bookseller to unfettered digital dominance?

Developing its CRM strategy has helped Amazon retain customers, and tailor its service around the individual. And crucially, its helped it sell to its millions of loyal customers not once, but again and again, while fighting off swarms of competitors.

The Amazon story

1994: Jeff Bezos founds company as an online bookseller

1997: Reaches one million customer accounts

1998: Expands into selling CDs and DVDs

2001: Makes first profit in final quarter of year

2005: Launches Amazon Video

2007: Launches the Kindle e-reader

2017: Acquires supermarket chain Whole Foods Market

2020: In February, Amazon becomes just the fourth tech company in the world to reach a valuation of $1 trillion

2021: Amazon purchases 11 aircraft from Delta Air Lines and WestJet Airlines to join Amazon Air' the ecommerce titan's burgeoning entry into the cargo network space.

Amazon's CRM strategy: the secret to success

We see our customers as invited guests to a party, and we are the hosts. Its our job every day to make every important aspect of the customer experience a little bit better.

Jeff Bezos, founder and CEO of Amazon

A strong emphasis on the customer is the foundation of Amazons success and its the companys intelligent use of CRM that has enabled this. Developed in-house, Amazons CRM software captures customer data at the point of purchase, which it uses to instantly customize its users online experience.

So why do customers keep coming back? Well, Amazons interface is simple and easy to use. You can view your own order history and how much youve been spending, and returns are handled swiftly through the system. Re-ordering is a breeze, and you can track your purchase through every stage of the delivery process.

All of this is down to how Amazon has managed to overcome common CRM problems, as well as the ecommerce giant's intuitive use of CRM software. Lets take a look at how it works.

Top 5 ways Amazon uses CRM

1. Tailored offers and promotions

When you buy something on Amazon for the first time, Amazon asks you to set up an account. Why? Because it makes for a smoother and more personalized experience, as youll get recommendations based on your interests.

This allows Amazon to tap back into what you like and sell to you on an ongoing basis. Amazons CRM brings you tailored offers and promotions based on your past purchases a popular approach to CRM that's also well-utilized by the likes of Apple and Uber.

2. Personal data collection and storage

Amazons CRM stores your personal and payment details when you create an account to buy something. And no, its not for any sinister, shadowy purposes (we hope!) it simply makes it that much easier for you to purchase again. You can order with one click knowing that your personal data is protected by Amazon Pay's industry-leading fraud prevention tools and have your item arrive the next day.

With that in mind, its not hard to see why Amazon are crushing the competition.

3. Recommendations

Another great thing about Amazons CRM? The recommended products feature. When youre logged in, Amazon will recommend products that might interest you based on your past purchases. You can also check out what people viewing an item also bought, and explore related products with ease. Offering these temptations without pressuring the customer is whats helping Amazon turn over billions every year.

4. Customer support

The big one. You can deal with almost every issue you might have as an Amazon customer through your account. The returns process is all dealt with online too. And if theres something that does require you to speak with a customer service assistant? CRM to the rescue again. Any Amazon staff you speak to will have your details at the ready, meaning quick and efficient resolution to all problems and more satisfied customers.

5. Evolution of services

Amazons use of CRM has been influential in the growth of its services. Its dedication to its customers led to the invention of the Kindle, while Amazons online Kindle Marketplace offers a tailored experience with unique book suggestions.

Amazon Video has also become one of the biggest streaming services out there. It offers hand-picked film and TV choices for each customer, which wouldnt be possible without CRM.

Want more? Discover how CRM is redefining the success of other major brands or jump straight into choosing a CRM system for your business today:

Read through the attached case study Amazon CRM. As you read through the case, and based on what you learned in SYS210: Business Driven Technology:

(A) Explain customer relationship management systems and how they can help organizations understand their customers. (400 words, 35% Marks)