NPS Benchmarks March 29, 2017 4 min read by Alex

How Amazon maintains an impressive NPS

How Amazon maintains an impressive NPS

From its humble beginnings as an online bookseller, Amazon has grown to become one of the world’s largest eCommerce businesses. But unlike many massive multi-national organizations, Amazon remains incredibly popular with its customers.

So popular in fact that Amazon accounts for 5% of total US retail turnover (nearly $68 billion in 2013). In terms of NPS, Amazon’s score is 50% higher than main street stalwart Macy’s.

According to Prosper Insights’ 2017 survey of more than 7,500 U.S. adults, more than three-quarters (76.7%) of Macy’s most frequent shoppers headed to Amazon during the holiday season in 2017.

Amazon has redefined the meaning of shopping experience. Now shoppers don’t need face-to-face communication to make a purchase and gain public trust. Good pricing, product reviews, fast shipping and easy returns seem to have replaced the traditional shopping.

The secrets of Amazon’s success

It is important to note that Amazon’s journey to success has been a long and difficult road. For many years the company posted little or no profit while they refined the technology and processes that power their current success.

The good news is that your business can “steal” many of these techniques to improve your own customer satisfaction ratings. Here are some to consider.

1. Investment and experimentation

Amazon has never been shy when it comes to spending money. The business invests vast sums to ensure that their back-end processes are as efficient as possible. They also spend a lot on research and development, building new products and services they believe will be of interest to their customers.

This willingness to experiment is combined with a willingness to fail too. The Amazon Fire released a few years back was not a hit with customers. On the other hand, Amazon Locker, allowing customers to collect packages from secure locations because they are not able to take delivery during office hours, has been an unqualified success.

Amazon does have the luxury of very patient shareholders and investors, allowing them to spend much more than their competitors. For smaller companies, funding needs to be more tightly controlled – but that does not mean sacrificing capacity for experimentation, especially if the customer experience will be compromised as a result.

2. Personalization everywhere

By carefully monitoring how customers use their website, Amazon builds a very detailed, highly accurate picture of their individual customers. This information then forms the basis of every email and marketing effort.

Shoppers using the Amazon website will see a list of recommended products at the bottom of every page, including items that they have previously browsed but not purchased. This is followed by regular emails encouraging shoppers to return and make more purchases.

Amazon personalization

New products like Alexa and Echo will only help to further enhance this profile-creation. By listening to their owners, these devices are feeding real-time information back to Amazon that allows them to add extra context to profiles that cannot be collected by website usage monitoring alone.

Also if you have registered a complaint with Amazon, you don’t have to keep telling the same story next time you reach out to them. The records of customer complaints are persistently stored in Amazon’s centralized database, and can be accessed conveniently by any customer service executive.

3. Subscription membership

One of Amazon’s most successful strategies has been its Prime subscription. The Amazon Prime has grown from a priority delivery service to become a value-add membership program.

Not only do subscribers receive their goods quicker (and for free). But they now receive access to the Amazon Prime TV entertainment content, and even priority booking for tickets to shows and concerts.

Jeff Bezos, CEO of Amazon, told investors last year, the idea behind Prime is to make “such a good value, you’d be irresponsible not to be a member.”

Although the company has added more and more new perks to its Prime subscription, 63% of Amazon shoppers report that free delivery is the most important factor in their purchasing decisions.

Amazon Prime membership perks

So while Prime subscribers pay for the privilege, they also receive unlimited free postage. The deal works out well for Amazon too – Prime subscribers typically spend 300% more than non-subscribers.

4. Effective self-service

Although they appreciate traditional service channels (phone, email, regular mail, etc), most actually prefer to use self-service tools – at least in the first instance. Amazon has carefully refined their service processes, making many of the key operations available to customers.

Instead of having to call a customer service rep to report a problem, shoppers can log a call in their account control panel, and carry out much of the initial escalation themselves.

This level of control allows them to “own” their own issues and frees up Amazon’s internal resources to focus on delivering excellent service on issues that cannot be resolved without human intervention.

Shoppers expect businesses to respect their time, making it as easy as possible to trade with them. In fact, Forrester Research found that 73% of customers believe that “valuing their time” is the most important thing their suppliers can do for them. And by providing tools needed to begin resolving problems, Amazon is clearly demonstrating respect for their customers.

5. Diversified product base

As mentioned earlier, Amazon began as an online bookseller – but as new opportunities have presented themselves, product lines have expanded. As well as physical goods, Amazon customers can now purchase digital downloads, groceries, and hardware – like Kindle e-readers and the Alexa digital home assistant.

Amazon has also found a way to productize their own internal processes. The Amazon Web Services (AWS) cloud service replicates their internal infrastructure, making the same flexible computing model available to other businesses. By selling a subscription to these computing services, Amazon is a significant player in the infrastructure services market too.

By constantly expanding what they offer, Amazon has become a one-stop shop for a huge range of goods and services. This makes shopping with Amazon particularly convenient, boosting NPS and ensuring customers keep coming back.

Complex, yet simple

Many of Amazon’s internal techniques are quite complex (the Amazon AWS Cloud arm of the business is incredibly technical) but they are all focused on the same goal – happy customers. Every development, innovation, and new service is designed with the intention of making the lives of customers easier.

From more accurate product recommendations to applying technology to make the shopping process easier, everything Amazon does is focused on making things easier and more convenient for their customers.

If your business cannot replicate anything else that Amazon does, it can still borrow this relentless focus on customer satisfaction. A customer-focus ethos is free to adopt after all. And ultimately it is only by providing an outstanding customer experience that you can push your NPS scores upwards.

For more help and advice about measuring NPS and using it as a measure for your own business performance, please get in touch to arrange a demo.

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