2012 – Proactiveness in Delighting customers

I have always been intrigued by the letters sent to shareholders by both Warren Buffet and Jeff Bezos. They are inspiring and, for wannabes like yours truly, a source of motivation and hope. So I am creating a series of articles on what learnings I took away from the letters of Jeff Bezos. This is the sixteenth letter in the series.

You can check out the complete series here: https://alphonserajdavid.com/category/book-reviews/non-fiction/jeff-bezos-stakeholder-letters/

This letter talks a lot about counterintuitive behavior e,sp. along the lines of spending money to delight customers when they are already happy with you.

Lesson #1: Focus on customers rather than competitors

A firm derives its energy by focusing on its mission. Jeff shares that at Amazon, he focused on serving customers better than focusing on beating the competition. Whilst it’s okay to follow and get inspired by the competition, it makes no sense for us to be actively focused on beating them.

Lesson #2: Be Proactive in delighting your customers

The customer-centric behavior in Lesson 1 leads you proactive in helping your customers. This proactiveness is based on the fact that Amazonians keep on reducing the cost of goods on their website and increasing value for their customers. They don’t wait for external pressure. They just focus on providing what’s best for the customers. This customer-first mindset allows you to be proactive in delivering value rather than waiting to react to your customers.

Jeff goes on to say that they invent before they have to, and this is because proactive behavior creates customer trust as it keeps on improving customer experience.

Lesson #3: Focus on making money when customers use your device

As a product Manager building solutions with a hardware component, I like this input. Here Jeff gives the example of Kindle. He shares how he saw 4 generations of Kindles on a beach in Florida and explained his philosophy of selling hardware at break-even prices and making money when customers used them.

Lesson #4: Customer centricity takes time to translate into revenue

Most customer-centric behavior requires proactive thinking and fast idea deployment meaning the costs are front-ended. Also, continuously reducing costs for your customer is not the right thing to do, according to Wall Street. But this is where true differentiation can be created in the minds of the customer.

Quoting Jeff directly here, ” We don’t celebrate a 10% increase in the stock price like we celebrate excellent customer experience. We aren’t 10% smarter when that happens and conversely aren’t 10% dumber when the stock goes the other way. We want to be weighed, and we’re always working to build a heavier company.”

Lesson #5: The longer you retain a customer the higher the value

Constantly providing value through proactive behavior will make sure you retain your customers for a longer time. The longer you retain them, the higher their value and the less you spend on sales and marketing.

This will also create a network effort wherein the customers will become your champions.

Lastly, Customer centricity builds trust and attachment which in the long term is a win win for all stakeholders