A STUDY OF THE CRM STRATEGY OF AMAZON
AUTHOR-VEDANGEE BORIKAR
INTRODUCTION
Amazon is the world’s largest internet retailer by revenue and market capitalization, thanks to smart investments and a foolproof business plan that guided the nascent company safely through the dot-com catastrophe. When we think of online shopping, first Amazon comes to mind. With its quick delivery times, one-click buy option, variety of products available and guaranteed quality, Amazon has become the go-to for people, giving it a sizable loyal follower base. Jeff Bezos founded Amazon in 1994 with the goal of creating a virtual bookstore for book enthusiasts. Their dynamic CRM system can be said to be responsible for much of their success. Amazon utilizes the Salesforce CRM that the researcher will be discussing in this paper.
Customer Relationship Management (CRM) is a technique for learning more about customers’ requirements, wants, and behaviors to develop a good relationship with them. It is a set of people, procedures, software, and internet capabilities that enable a company to manage its customer relationships in an efficient and methodical manner. CRM’s purpose is to better understand and anticipate the demands of present and potential customers to boost customer retention and loyalty while also broadening marketability of products and services.
RESEARCH METHODOLOGY
The methodology followed in this paper is a combination of primary and secondary research. Primary research is conducted through the form of a survey, the results of which are analyzed using graphs. The flow of research before writing this paper is examining Amazon’s marketing strategy and learning about its CRM program and how it has been one of the secrets to Amazon’s continued popularity and customer retention. Various research paper, journals, articles, and websites were used to write this paper.
HYPOTHESIS
H0 -The various CRM strategies used by Amazon is not the reason for its continued success.
H1– The various CRM strategies used by Amazon is the reason for its continued success.
REVIEW OF LITERATURE
- Kaur, J. (2022), examines three major organizations’ customer relationship management strategies: Apple, Amazon, and BMW. It discusses their distinct CRM tactics and their outcomes. The goal of CRM, according to the study, is to collect data on every encounter a company has with a customer via all channels and save it in the CRM system so that the company can properly understand customer behavior. It also discusses the advantages of a successful CRM strategy for a company.
- Imran, A. (2014), has extensively studied Amazon’s information systems, business strategies and E-CRM. In this paper, the researcher has analyzed the transaction processing systems that included 1-click purchase and secure payment. They have studied the supply chain management with special focus on the Customer Relationship Management (CRM) strategies and other business strategies applied for internet activity and smart innovation strategy.
- Ling, R., Yen, D. (2016), focus primarily on the IT component of the CRM implementation. They believe that CRM is also a natural and predictable extension of how marketing and sales have evolved over the years and, in many ways, are coming full circle. They theoretically analyze the critical success factors in implementing CRM and conclude that customer information and the associated technology tools are the foundation upon which any successful CRM strategy is built.
SURVEY AND ANALYSIS
PRIMARY RESEARCH
The analysis of the following data is done with the help of a survey done through forms circulated. The questions were based on the following parameters:
- The first question answered by the 110 respondents included mentioning their email-id to avoid double counting of responses.
Out of 110 respondents, 61.8% were in the age bracket of 50-75, 20.9% were aged 10-25 and 17.3% were from the age group of 25-30.
Out of the 110 respondents, 100% of them had heard of the brand Amazon. Thus this proves that Amazon is a pretty well known brand.
Out of the sample size, 7.6% did not products from Amazon often, 52.7%% bought products from amazon frequently while 40% shops products from amazon frequently. This shows the popularity of Amazon products and how the marketing strategy is efficient.
5
Out of 110 respondents, 68.2% prefers buying electronics and appliances from amazon, 51.8% buy beauty and fashion products, 46.4% buy health and wellness products, 15.5% order food from the amazon pantry and 26.4% buy other kinds of products.
Out of the 110 respondents, 73.6% enjoy the variety of options provided by Amazon, 42.7% love the lessened delivery times, 34.5% appreciate the fast customer service provided by Amazon, 32.7% are satisfied with the good quality assured by Amazon.
Out of the 110 respondents, 70% were aware of the Amazon loyalty program, Amazon Prime and 30% were not. This gives us an insight into how Amazon has promptly advertised its loyalty program.
On a scale of not satisfied to completely satisfied, 1.8% of the respondents selected 2, 11.8% were midway, thus voting 3, 50% were somewhat satisfied voting at 4 and 36.4% were completely satisfied, selecting a 5.
About 63.6% of the 110 respondents were completely satisfied with Amazon’s problem solving approach that is a big part of their CRM strategy, 30.9% were unsure of their response, thus selecting maybe and 5.5% were not satisfied.
SECONDARY RESEARCH
The researcher will be analyzing the CRM strategy of Amazon.
The primary notion of e-CRM is the application of CRM to internet-based e-commerce businesses (E-CRM). It allows users to gather, integrate, and distribute data collected on the company’s website throughout the organization. In today’s world, an e-commerce platform is no longer limited to a single channel, but rather has extended toward multimedia communication multiple sources. Today Amazon has successfully implemented the e-CRM program.
1. Interactive User-Interface
The user-interface (UI) of Amazon CRM is incredibly intuitive and simple to use, making it easy to use for all online consumers. The user interface is clean, uncluttered, easy to navigate, and understand. Here are a few of the features that make Amazon’s CRM very easy to use:
- High-resolution pictures of products
- Exact description
- Ratings that are bold and visible
- Categorized categories
- Checkout is simple and straightforward.
2. Personal Data Storage
Every day, most CRM systems will handle large volumes of data in their data warehouse. Customers’ searches and browsing, data mining, wish lists, and other methods are all used by Amazon’s CRM to collect information. Whatever you choose to buy – or not buy – you are sending information to the system, which is then analyzed and utilized to modify your Amazon experience and service accordingly.
When you shop on amazon, a personal account is necessary. This information allows them to personalize marketing campaigns and email campaigns to stuff you are likely to enjoy. You can also save payment information for a faster checkout.
The recommendations that Amazon provides are usually accurate and customers can take advantage of the “customers who bought this item also bought” function. Amazon’s functionality is retained by its CRM system’s capacity to save data.
3. Provide Human Support
While amazon provides a large and impressive support resources roster, live agent support in unavoidable, which some people prefer. Amazon thus provides a robust customer representative team who can be reached via phone, email, or live chat. There are no waiting times when it comes to amazon phone support, and they are available 24/7.
Amazon also boasts the feature ‘Mayday for the fire’, even though it was discontinued, it still remains one of the most impressive features of customer service, where all the customer has to do is tap twice to connect to the live support agent who will guide them through the problem. They have vowed to get customers connected to the support agents under 15 seconds which they were able to do so in just under 10 seconds, which is a very impressive feat.
4. Communication challenges
Covid-19 has had its impact on offline retail stores, as well as on online e-commerce websites like Amazon too. It led to customers facing challenges like delayed delivery, stocks going out, delays in the refund, and many more. As all these challenges were unprecedented, amazon could not effectively counter it but they did the best they could. They opened communication lines about the situation and the pressing challenges faced by the company.
Customers were informed prior if they might expect delays and other issues on the Amazon website. The company has also produced several articles in order to educate clients about the problem. All of this is to guarantee that customers are aware of the problems and are not disappointed with their Amazon buying experience.
5. Loyalty incentives
According to various polls and studies, amazon prime is one of the best loyalty programs in the world. The program has been hugely successful, with Prime members spending twice as much as non-Prime members do.
Amazon addressed one of its consumers’ major complaints: shipping charges. Prime began by focusing on the demands of Amazon’s most loyal customers, and subsequently expanded over time. Focusing on the short-term benefits of a long-term strategy may seem contradictory, but it helps justify your continued investment in your consumers and allows you to provide more benefits to entice more casual users to join. They’re putting their money into the client, not the product.
Instant gratification is more vital than ever, and this premium loyalty program provides members with immediate advantages. Amazon may offer its best perks to customers who will get the most value out of their loyalty program by charging an annual fee. The free trial is also important here, so more customers can determine if the solution matches their needs.
Charging is a two-way relationship. Amazon Prime members are compelled to make additional purchases to justify their membership fees. Moreover, Amazon has ensured that it is committed to running a program that is increasingly helpful to its members, including the ability to try the finest benefits right away on their first purchase. This is what a premium loyalty program looks like.
6. Make self-help easy
Amazon had a robust and remarkable support center in addition to a comprehensive user interface. You may access all pages from a single screen, whether you want to evaluate your order, manage accounts, read FAQs, or contact customer service experts. If you can’t find the appropriate answer for your question, you can always use the search bar to look it up. There is a plethora of other resources available in the form of articles, which you can readily access for any assistance you require. Basically, Amazon CRM approaches help and support resources in the same way as they handle product pages. You can either search the entire category or a specific product. The clients can assist themselves easily without having to wait for customer service.
CONCLUSION
The study concludes that Customer retention is more important to Amazon than customer acquisition. Amazon shoppers are frequent users and thus return to Amazon.com to buy products. Amazon retains customers intelligently and truly by providing excellent service and clear communication to its most loyal customers.
Integrating lean advertising, service and selling amazon acquires customer and through great customer experience it retains the customer. Amazon has also focused on peer reviews that verified buyers provide to guarantee the quality of their products. Amazon CRM Is thus one of the best examples of how CRM can transform the business and the brand.
REFRENCES
- Amazon CRM – How to master the Amazon CRM Strategy? Folio3 Dynamics Blog.
- Case Study: How CRM is The Secret Behind Amazon’s Success. (2018, April 23). YourShortList (Formerly Software Advisory Service).
- How Amazon Paved the Way for Premium Loyalty Programs. Clarus Commerce.
- How Do They Do It? Amazon’s CRM Success Story. (2013, October 15). Expert Market.
- Https://www.researchgate.net/profile/Md-Abdullah-Al-Imran/publication/261440748_A_STUDY_ON_AMAZON_INFORMATION_SYSTEMS_BU. (n.d.).
- What Amazon Teaches Us About CRM Strategy. (n.d.).
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