Introduction:

Amazon.com as we all know is the leader in the online retail segment. It was created in the view that internet
could revolutionise the way things could be sold to the consumers. There were a lot of companies which had
jumped into the mad race of capitalising on the internet retail, but this had led to a lot of bad practices in the
chase for customers but ultimately not creating value. The websites tried attracting customers by deep
discounts and free giveaways, but these customers vanished whenever the companies tried to improve on
their margins. This was an example of a bad marketing thinking. On the contrary, Amazon.com has proved to
be a category-leader in acquisition, sales and retention performance, and has displayed excellent bonding
levels hence remaining no.1 in the e-retail business.
Amazon.com has shown high levels of customer satisfaction and bonding. In a research by Millward Brown,
Amazon.com has shown very high levels of loyalty. 54% of category buyers in US are loyal towards
Amazon.com. The industry average says 10%.

Overview of how Amazon operates:

Amazon.com works on an interactive technology which is very smart. It naturally focusses on servicing the
high value customers. The regular shoppers are favoured but at the same time not neglecting the low value
shopper.

Amazon.com works on the principle of direct marketing. For the regular customer, it captures the browsing
information based on cookies. Hence the customer gets a personalised view on his system. Also the
recommendations made to the customer are tailored. All the books and products of Amazon.com have
category information about them and whenever a customer buys any such product, there is a buying history
maintained. This again helps Amazon.com to recommend books or any product that could be relevant to that
particular customer.

Whenever a customer registers on Amazon.com.com, the interests which he mentions are used in profiling.
This again helps in sending customer specific information in the form of newsletters. On the website, the
customer can view display prompts and advice about birthday gifts. All this can be received if the customer
has registered to allow for these. A customer can also put up information about himself for others to read.
This brings about more customer involvement. This practice is known as permission marketing.
Amazon.com provides for customers to interact with one another on their website. This is quite beneficial as
they get to review books and products for and through each other. These reviews can be recorded and
scored or graded by others. Amazon.com then rewards those who provide many valued reviews. This kind of
direct marketing also enables consumer word of mouth.

Amazon.com works on ways how to increase the sense of customer community and belonging. It provides
interesting information about other customers like the most preferred books for people in say, Detroit or
how many people are currently online from New York.

Also not to forget the beautifully managed website; Amazon.com.com follows a step by step process of
selling books to customers in the minimum time possible and with the easiest of navigation. It also provides
information on what else the customers who purchased that particular book or product purchased.
Amazon’s customer Centre for Integrated Marketing, focused implementation of technology registers a high
score on many of these, including on the following essential factors:
 Customers feel that all their brand experiences come from one identity.
 Customers trust the brand’s promises.
 The brand treats different kinds of customers in ways appropriate to them.
 Whenever appropriate, the brand recognises individual customers wherever they interact or do
business.
 Customers are happy with the brand experience.
 There is a service-oriented ideal that encourages aligned commitment across the organisation.
 Everyone nurtures what the brand means to committed customers.
 The brand organisation is excellent at realising high value propositions.
 Objectives are coherent with the brand/company’s competence.
 There are no silos.
 Practices ensure shared learning across the organisation.
 The organisation works in effective partnership with the members of its value stream.
 Business processes are actively aligned to the brand value promise.
 Quality customer information is available in a timely way at every point of need.
 There is a profound shared knowledge of key customer groups.
 Customer management focuses on the value of customers over their lifetime.
 The company and agencies all work together in partnership.
 Evaluation is managed as a learning discipline across the participants

CRM strategy in practice:

The 10-Steps strategy outlined:

1. Investment: Invest according to customer value: Amazon.com followed this rule: ‘Invest according to
customer value’. It focussed heavily on the regular buyers and the high value customers. There is huge
spending on the internet banners which favours the already existing online shoppers. Amazon.com
targets these users as their prime audience. There is high consumer brand awareness and a wide range
of products. There is a feature called the ‘My Favourites’ folder where the customer can bookmark his
favourite items. All these attributes help Amazon.com in achieving targeted frequent communication
along with widespread distribution presence and accessibility.

2. Relationship: Optimise the whole customer relationship: Amazon.com believes in the principle of:
‘Optimising the whole customer relationship and not just acquiring them.’ It firmly believes that the
acquisition cost of the customer equity will be repaid effortlessly if the current customers are kept
satisfied and a fruitful relationship with them is maintained. They believe in investing 70% of resources in
building great customer experiences and then utilising 30% on spreading the word about it. Amazon.com
leverages its CRM on lean advertising, the service and the selling the most effective way at each touch
point.
3. Reputation: Be true to the brand and its positioning: Amazon.com truly follows: ‘Be true to the brand,
its values and its positioning’. They aim at being trustworthy in ethics and providing guaranteed
satisfaction in the delivery as well as the product.

4. Relevance: Service each customer community appropriately: As discussed previously, Amazon.com

tracked the interests of each customer and serviced each user community suitably. This gives each
customer a feeling of being serviced in a special and trustworthy way. This develops the sense of
belonging and spreads the word. It also helps Amazon.com estimate sales and the share of wallet.

5. Value: Create enduring value first, tactical worth second: They constantly believe: ‘Create enduring
value first, tactical worth second.

6. Touchpoints: Manage the relationship at all appropriate touchpoints (CODAR): Amazon is committed to
an interactive approach to CRM marketing. It invites you to subscribe to newsletters emailed to you. It
welcomes you to each return and acts like it expects you. It provides an opportunity for you to tour its
home and in each room it comments on its furniture and fittings, introduces you to other friends and
plays the host. It makes suggestions. It is instantly responsive to your demand and promises prompt
despatch. And it even responds to complaints. Amazon automated the complex process that starts when
you hit the patentprotected “1-Click” buy technology and ends when your purchase is delivered to your
door. Then they created a “flow experience” that keeps customers coming back to Amazon’s website to
read product reviews or one another’s “wish lists,” And it’s all guaranteed.

CODAR Analysis: CODAR is a tool that achieves the big ambition of unified communication planningand
evaluation. CODAR, a proprietary tool with a patented technique, defines and evaluates all
communication activities, from top to bottom, across all contact points, within all disciplines, and related
to all and any business objectives, using a single intelligent framework derived from the way
communication affects people. CODAR leans on cognitive theory, while also drawing from behavioural
and systems theory. It also draws on decades of marketing communication practice and psychological
theory.

CODAR application architecture: CODAR has the following holistic and fractal architecture:
 An overall business-related goal, such as market share, brand or customer equity.
 A hierarchical but fractal communication planning structure: master communication objectives
with multilevel subsidiary communication objectives and activities
 Communication priorities and objectives for each communication activity, from the master
plan to the lowest level communication activity, based on a unified framework of planning
dimensions.
 A set of measurable objectives for each planning dimension defining what constitutes
successful accomplishment.
 A defined relationship between lower and higher-level communication activities, such that the
contribution of each communication activity to the overall plan is clear.
 Optimisation tools for channel planning, selecting the best media and discipline combinations
 A learning and evaluation econometric database
 A communications knowledge base
CODAR planning dimensions: CODAR uses five dynamic and inter-dependent planning dimensions to plan
and evaluate any communication. These are:
 Idea forming, referring to the
communicator’s objective of influencing
the ideas, associations and thinking of
the communication recipient, for
example about the brand or a particular
project or product. This is therefore
primarily a cognitive planning dimension.
 Relationship building, referring to the
objective of causing the communication
recipient to feel him or herself
connected through some form of
relationship with the brand or its
representatives. Examples might be the
feeling of affinity with the values of the
brand or culture, trust or appreciation,
the sense of being personally recognised
and appreciated, gaining accessibility to
the communicator or brand, feeling a
sense of belonging to some privileged or special group, involving the brand and its products more in
everyday life, and others. This is therefore primarily an affective planning dimension.
 Behaviour activation, referring to the objective of causing an intentional or actual behaviour change
by the communication recipient, for example sales activation, sales enquiry or commitment to
behaviour change. This is therefore a conative-planning dimension.
 Help or service support, referring to the objective of providing required help or support to the
communication recipient, for example in the form of information about a product or policy or help in
a process. Here the objective is to reduce anxiety and generate the feeling of being cared for.
 Product experience, referring to the objective of giving the communication recipient an experience,
whether actual, such as in a product trial, or imaginal, such as through a virtual, visual or verbal
representation of the subject or product. Here the proposition is that it is difficult to agree to a
proposition unless it and its consequences can be imagined. Each of these objectives or dimensions is
present to some extent in every act of business-oriented communication. However, the relative
priority and specific objectives of each element will vary from communication to communication. It is
the process of selecting the relative priorities (represented on a radar chart) and specific content of
these objectives and subsequent evaluation of performance against them that constitutes the core
of the process and tool.

7. Imagination: Bring imagination to the customer experience: Amazon has a series of newsletters on
various topics, an immediate set of recommendations when you come online, your own area for
recommendations, specialist advice on all kinds of key topics, like Digital cameras or buying car, online, or
editors choice Jazz, best seller recommendations, and much more.

Amazon has editors and experts on all topics; they classify products and aim to be a perfect guide, and
when they don’t know they enlist thousands of customers into giving advice. It adds up to a powerfully
imaginative tool for social bonding and increasing sales. Even critical reviews by other readers that put
you off purchasing increase trust in the brand.
8. Learning: Measure and learn: Amazon has exact knowledge of the value and cost of each of its
customers and has impressive feedback systems and can use this knowledge to design and improve its
systems, marketing and services.
9. Use technology like an artist: Perhaps the most important point to make is that most people don’t think
of Amazon primarily as a technology company but as a service or shopping site. The many examples
already given indicate how technology is harnessed to CRM purposes that add value. Amazon’s CRM
system depends on the following functional applications:
 A relational database of customers, including a history of their purchases and activity, as well as
the marketing activity of the brand (such as sending newsletters).
 A relational database of product information, including not only basic information such as price
of also reviews, editorial and such like.
 An order processing system, including financial processing, such as credit cards, linked to a back-
end delivery system. In the case of Amazon, this includes automated warehouses.
 A dynamic web page management system that can take standard information and formats and
customise them to the customer.
 An efficient and brand enhancing site design and appearance, including navigational tools and
aids.
 An automated communication system, such as e-mail systems, order information systems, and
message management while the customer is online, that ensure personalized, timely and
relevant communication.

In reviewing the Amazon website, it is worth noting that a Microsoft research study in 2001, conducted with
Cranfield, identified that integrated corporate websites, such as Amazon, are much more effective than other
styles, such as non-interactive (or even interactive) or transactional sites. It is the most mature sites that
realised the greatest benefits from e-business services. It also found that customer satisfaction is the key
performance indicator, and much more important than so-called e-indicators.

10. Make it good for everyone: The 10th challenge is to:

 Develop brand, knowledge and financial equity for the company;
 Create fulfillment, development and financial satisfaction for the employee;
 Ensure the customer is happy and committed, and hence create customer equity.
Despite the immense losses and rollercoaster share price ride, clearly the CRM systems have contributed
brilliantly to these goals.

References:
1. http://www.pbr.co.in/Brochure/d003.pdf
2. http://www.ukessays.com/essays/marketing/crm-practices-followed-by-amazon-com-marketing-
essay.php
3. http://www.amazon.com/CRM-practices-corporate-banking-relationship/dp/3659139181