Amazon Retail CRM

Group 3: Dhara | Durgit | Pankaj | Prasham | Ronita

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Overview
Origin Flywheel of Growth Revenue Streams
Ø Founded by Jeff Bezos in 1994
Ø Vision – Become Earth’s most customer
centric company

Leadership Principle

Revenue Per Unique User (in $, 2011)

189
200
ARPU
100 39 24 4
0
Amazon Ebay Google Facebook
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CRM Strategy

“We see our customers as invited guests to a party, and we are the hosts. It’s our
job every day to make every important aspect of the customer experience a little
bit better.”
– Jeff Bezos, founder, and CEO of Amazon

§ Customers Create Personal § Access to all information- § Minimal Customer Support

account
§ Software captures all data like
location, past purchase etc.
§ Customized Recommendations
Product ordered, delivery time requirement
and date, return policy etc. § Peer reviews of products
§ Website- clean, streamlined,
easy to understand, easily
searchable
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Customer Grievance Redressal

There are a lot of variations of complaints from case to case. The customer
care representatives really try to relate and sympathize with the issue no
matter the dimension of it. This helps them find the best solution for every
cases with maximum customer satisfaction.
Amazon India Statistics

What The customer care representatives maintain decorum throughout and

gives a personal touch to every call by calling out the customer’s first
Customers names. They also have a very neutral accent which helps in
understandability.

think?
Most customers feels like the representative over the phone is following some
kind of fixed script and don’t utter a word outside it even if it is not helping the
problem. But they felt amazon’s customer care is not so mechanical and they
treat customers’ problems as ‘humans’.

Level 2 : Customer Service

Escalation
Level 1 : Customer Support
Complaint via email, resolution
Resolution via chats/call backs
within 5 days
Level 3 : Grievance Officer Level 4 : Nodal Officer
Complaint via email, resolution Complaint via email, resolution
within 3 days within 3 days
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Customer Feedback & Recommendations

Feedback Importance Private Message
Ø Review improves influence customers have on Ø Focus is the service of the seller of a product
each other.
Ø Seller responsiveness
Ø Amazon provides opportunities to interact with
Ø "Message Vendor“
other customer and potential customers
Ø "Item“: Where's My Stuff?, Cancel Order ,Can You
Ship Faster? Etc.
Research
Ø Consumer reasons for writing product reviews
Ø How to get some aggregative indicators of product
reviews which can influence purchases Public Feedback
Ø Which reviews are more successful because there are Ø Focus is on the product itself.
many available, as opposed to just one
Ø Not on the company or the buying process.
Steps taken by Amazon
Ø Appear on the product description page
Ø Always protecting its customers
Ø Product-focused and not market-focused
Ø Tried to make self-help easy
Ø Can be posted by anyone, not only by people who
Ø Saves consumers a lot of time, might have wasted have bought from Amazon
looking for helpful responses
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Loyalty Program

Benefits of Prime Membership Are you currently subscribed to Do you perceive Amazon Prime
any loyalty program? as a Loyalty Program or Service?
Amazon
Prime
32% 38%
Service
Others
Prime Video Exclusive Deals Fast and free
Delivery Loyalty
60% Program
62%
8%

Unlimited Access Discounts Early Access Games and Source: Primary research`
to Kindle Music

Pricing
Flagship loyalty Ranks top in Competitive Builds
129₹ per month 999₹ per year program various surveys Advantage Community

ü 10 Million Subscribers
ü 40% direct purchase
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Loyalty Program Success Framework
Structure of Loyalty Program Increased Purchase Frequency
ü Creates a sense of community.
ü Differentiation w.r.t. prime and non-prime users Decreased Consumer Price Sensitivity
Structure of Rewards Customer Advocacy
ü Mostly direct rewards, few indirect rewards.
ü Utilitarian and behavioral rewards. Extended Relationship Lengths
Customer Factors
Increased Share of Wallet
Customer program fit: High
ü Customer can see and identify benefits. Developed Sense of Community
ü Customer’s current requirements and program benefits
match Increased Firm’s Performance

Ø A small portion of customers contribute to large share of revenue.

Ø Prime users on an average spend more and frequently than non-prime users.
Ø Prime video creates a sense of community and incentivizes users to come back. It also responsible for consumer advocacy.
Ø Churn-rate for Amazon Prime is around 2% so the length of the relationship extends. However, an average user shares the account with at
least 3 people which has an impact on profitability.
Source: The Drivers of Loyalty Program Success: An Organizing Framework and Research Agenda by Michael McCall , Clay Voorhees, 2011
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Customisation in diversified offerings

Initial Strategy of Customization

Bucketing a number of customers according to similarity in
demographics and offer services and recommendations
accordingly

Scenario
Customers got unwanted recommendations which did not give
them a good experience

Improvised Strategy
The recommender algorithm started treating every customer as
a different bucket give personalized recommendations
according to their needs and preferences.
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Comparison with Competitors

Ø The major reason for better experience at Amazon is its prime-membership deal & look
and feel of website
Ø People trust Flipkart more than Amazon just because it is an Indian brand
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Comparison with Competitors

Regular Visits to Amazon App Flipkart is an Innovative Platform

Ø Neat App Ø Cash on Delivery
Ø 20% Increase in Sales Ø Prexo Deals
Ø Today's Deals is the major attraction Ø No Cost EMIs
Ø Flipkart is unable to copy the same Ø Understands Indian Consumer's
Behavior Better

Google Reviews
Ø Amazon preferred over Flipkart
Ø Amazon for customer service
Ø Flipkart for product variety
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Gaps and Recommendation

▸ Major Gap Identified

Indian market is very price sensitive and its prime membership is thus reused by many
users. Its effects are:

Ø It is affecting the profits from the loyalty program

Ø Amazon is missing out on some data and mixing up customer behavior data when
multiple users are on the same prime account
Ø When prime membership credentials are shared for content sharing purpose, privacy on
the shopping behavior is also violated

▸ Recommendations
Ø Create profile option in the Prime Loyalty Program which can facilitate multiple
customers be under one loyalty account. It will enable Amazon to have a
competitive pricing and attract more customers.