Does your business love its customers?

If I could have known how much Amazon.com, Inc. (NASDAQ: AMZN) would get, I would have bought some stock on the IPO.

What is probably the most useless sentence ever written!

It is akin to “If I had known what the lotto numbers were last night, I would have marked them on my ticket”.

It might be wiser to ask yourself, “Given Amazon’s success, what lessons does it offer us?

One, by the way, is “Better late than never”; I left a lot of money on the table but bought – belatedly – Amazon stocks, and I still own them today.

The lessons could go to disruption and innovation. Changing the game, doing things differently – better – is difficult. But if you can do it right and actually achieve “flight speed” then you are turning the benefits of other people’s exercise of power into mill stones around their necks.

Not easy to do, of course, but once you do, the world can be your oyster.

The lessons could, linked, go to scale. Size becomes its own defense at some point as you go from a puny upstart to a dominant player. You can set standards, take the lead, and your marketing costs can drop as you become a household name, at least among your target market.

And the lessons could go to culture. Building from scratch, while difficult, can be easier than trying to change things from the inside out. An oil tanker takes more time, effort and distance to turn than a speedboat.

But, as I said before, these things are only evident in hindsight, and only after a business has passed an invisible tipping point.

Many potential Amazons have failed. Wal-Mart, usually presented as the victim of Amazon’s success, has found a new lease of life.

Still, I was amazed – and, again, I’m a shareholder, so discount it accordingly, if you think it’s appropriate – to receive an email from Amazon this morning telling me that ‘they sent me a refund.

The word refund was in the “subject line” of the email, but it didn’t tell me what the product was.

“Bugger,” I thought, “I wonder what I’m not getting.

Upon opening the email, I was instantly confused. I actually received the product yesterday.

I must have read a little further.

Then I read it:

“Reason for reimbursement: item shipped late”

I hadn’t complained.

To tell the truth, I didn’t even realize it was late.

Yet Amazon had reimbursed me for my shipping costs. In full.

Again, remember I hadn’t complained.

Amazon swallowed my shipping costs.

Not to keep me soft. Not because I complained.

But because they think they screwed up and wanted to get it right.

They couldn’t have done anything. I probably wouldn’t have noticed.

If I had complained, they could have legitimately blamed the COVID-related shipping delays.

Or reluctantly offered me a partial refund or site credit.

I probably would have been happy with this if I had complained.

But Amazon doesn’t want me to be “satisfied”.

He doesn’t want me to feel neutral about the company.

He doesn’t want me to tell my friends that Amazon is okay.

Make no mistake, Amazon isn’t doing this out of the kindness of its heart (of its shareholders).

Amazon does it because it knows the customer’s love matters.

Meeting expectations is the ticket to the dance, but truly delighting customers sets a business apart.

He knows that by treating customers better than they expect to be treated, those customers will be even more likely to use Amazon next time around.

This saving in freight is an investment in customer loyalty.

Because Amazon also knows that the cost of “acquiring” a new customer is many times the cost of retaining an existing customer.

He probably also knows that people also want to work for a company that cares about its customers. And that it is far more effective to deal with supply chain failures preemptively than to deal with unhappy customers.

And he knows human nature means that I now feel better as an Amazon customer than before opening this email.

So, I’m probably going to use Amazon more in the future, because I know how much they care about their customers. I’ll be less worried that they’ll try to blame me next time. That by choosing between Amazon and someone else, I’m going to trust Amazon a little more.

And all of the above, measured over days, weeks, months, and years, makes that freight payback a pretty cheap investment.

Which raises questions:

How many companies are trying to make money on every transaction, missing the forest for the trees?

How many companies invest time, effort and money to improve the experience of their customers?

How many companies are really playing the game for the long haul – realizing that satisfied customers, while less profitable today, are gold mines in the long run.

It’s not just Amazon, of course.

For example, Aussie Broadband Ltd (ASX: ABB), in the generally boring and undemanding telecommunications world, elicits a ton of love and recommendation for customers.

Corporate Travel Management Ltd (ASX: CTD), a company that I also own shares in, has long won awards for customer service and satisfaction and has high customer retention rates.

And there are plenty of others as well.

As a group, I think there’s a good chance that the companies that care about their customers the most – and whose customers feel that love – will beat the ones that don’t.

This is not the only way to pick a winner on the stock market. And there will be exceptions that will prove the rule. But when your customers actively talk to others about their great experience… well, you’re probably on to something worth paying attention to.

Dupe!

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