Amazons Secret Sauce: A Case Study Analysis

By: Ashley N. Rosa

Disclaimer: This is an analysis from an Amazon case study done by Dave Schaffey

It is important to focus on the customer-especially at this time- for startups, small businesses, and large international businesses alike. Amazon is currently one of the largest and most successful corporations in the market. Amazon has grown 15% in the last year alone, reaching its target net sales of $110 billion by the third quarter of 2021.

Shaping Amazon and its Evolving Business Model

Amazon’s secret sauce has evolved since the release of its 1994 marketing strategy. Smart insights author Dave Schaffey explains their relevance in today’s times by stating “Their focus on customer experience put Amazon in the role of a thought leader in e-commerce experience. However, whether due to diminished customer service, increasing customer expectations, or a mixture of the two, fulled by a global pandemic - notably, 2020 was the first time Amazon's ACSI customer satisfaction rating dropped below 80 since launch”. They were quickly able to re-establish their momentum in 2021 by testing market opportunities made available by digital technology, their focus on testing and analysis to improve results, expanding their line to grocery, prime benefits, and listening to the consumers’ criticism.

According to research done by smart insights- Amazon performs exceptionally efficiently measured against revenue per visitor, which is one of the key measures for any commercial website, whether it's a media site, search engine, social network, or a transactional retailer or offers travel or financial services. Forbes credits Amazon's success to 3 rules, which in their opinion is a ‘risky strategy. The three rules are as follow:

1. Strategy is about focus - although Amazon has an incredible number of strands to the business today.

1. Don’t throw good money after bad - with criticism in particular of Amazon's investment in groceries.

2. Your core competencies determine what you can and can’t do - developing the Kindle with no hardware manufacturing experience.

Amazon’s Secret Sauce

Amazon has an emphasis on its customers like no other. Their mission and vision statement, from their 1994 shareholder letter, explains a detailed account of why customer service and appreciation are vital. Their mission statement stated: “Earth’s biggest selection and to be Earth’s most customer-centric company.” As time goes on, they have continued to exploit this strategy and it has brought great advantages for both the consumer and the business. Key features, noted by smart insights, that make amazon stand out in the customer experience sector are:

• editorial and customer reviews;

• manufacturer product information;

• web pages tailored to individual preferences, such as recommendations and notifications; 1-Click® technology;

• secure payment systems;

• image uploads;

• searching on our websites as well as the Internet;

• browsing; and the ability to view selected interior pages and citations, and search the entire contents of many of the books we offer with our “Look Inside the Book” and “Search Inside the Book” features.

• The community of online customers also creates feature-rich content, including product reviews, online recommendation lists, wish lists, buying guides, and wedding and baby registries.

In 1994 Amazon placed its focus on its consumer while other companies at the time focused on crunching numbers and other priorities. By listening to their customer’s wants, needs, and trying to make the consumers’ life easier, Amazon has created a secret sauce. Until this day no other company has been able to tap or master the secret sauce of consumer priority.

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