7 CRM Strategies of Amazon That You Can Use for Your Ecommerce Business

Customer relationship management (CRM) is the process of managing interactions with existing and potential customers. CRM helps businesses understand their customers’ needs, preferences, and behaviors, and provide them with personalized and relevant solutions.

KEY TAKEAWAYS

CRM is the process of managing interactions with existing and potential customers.

Amazon uses CRM to provide personalized and relevant solutions to its customers.

You can use some of Amazon’s best practices for your ecommerce business, such as personalizing recommendations, communicating effectively, creating loyalty incentives, protecting customer privacy and security, and improving customer satisfaction.

You can also use various tools to help you implement and manage your CRM strategy.

Amazon is one of the most successful ecommerce companies in the world, and its CRM strategy is a key factor behind its growth and customer loyalty. Amazon uses CRM to collect and analyze customer data, deliver personalized recommendations, communicate effectively, provide human support, create loyalty incentives, protect customer privacy, and improve customer satisfaction.

In this article, we will explore how Amazon implements its CRM strategy, and how you can use some of its best practices for your own ecommerce business.

Personalize Recommendations Based on Customer Data

One of the most noticeable features of Amazon’s website is its personalized recommendations. Amazon uses a sophisticated algorithm that analyzes customer data, such as browsing history, purchase history, ratings, reviews, wish lists, and preferences, to suggest products that are relevant and appealing to each customer.

Personalized recommendations help Amazon increase sales, cross-sell and upsell products, and build trust and loyalty with customers. According to a study by McKinsey, personalization can increase sales by 10% or more.

You can use personalized recommendations for your ecommerce business by collecting and analyzing customer data from various sources, such as your website, social media, email marketing, surveys, etc. You can then use tools like Google Analytics or Shopify to segment your customers based on their characteristics and behaviors, and create personalized offers and messages for each segment. You can also use tools like ReadyCloud or Zaius to integrate your customer data across multiple channels and platforms, and deliver consistent and relevant experiences to your customers.

Communicate Effectively with Customers

Another aspect of Amazon’s CRM strategy is its effective communication with customers. Amazon uses various channels and methods to communicate with customers, such as email, phone, chat, social media, etc. Amazon also uses automation and artificial intelligence (AI) to enhance its communication efficiency and quality.

For example, Amazon sends automated emails to customers to confirm orders, provide shipping updates, request feedback, offer promotions, etc. Amazon also uses AI-powered chatbots to answer common customer queries and provide self-service options. Amazon also provides human support via phone or chat when customers need more assistance or have complex issues.

Effective communication helps Amazon keep customers informed, engaged, satisfied, and loyal. According to a study by Zendesk, 70% of customers say that effective communication is the most important factor in creating a positive customer experience.

You can use effective communication for your ecommerce business by choosing the right channels and methods for your target audience, and using them consistently and appropriately. You can also use automation and AI tools to streamline your communication processes and reduce costs. For example, you can use tools like Mailchimp or Constant Contact to create and send automated email campaigns to your customers. You can also use tools like Chatfuel or ManyChat to create and deploy AI-powered chatbots on your website or social media platforms. You can also use tools like Zendesk or Freshdesk to provide human support via phone or chat when needed.

Create Loyalty Incentives for Customers

Another element of Amazon’s CRM strategy is its loyalty incentives for customers. Amazon offers various programs and benefits to reward customers for their repeat purchases and referrals, such as Amazon Prime, Amazon Smile, Amazon Rewards Visa Card, Amazon Business Prime American Express Card, Amazon Gift Cards, Amazon Associates Program, etc.

Loyalty incentives help Amazon increase customer retention, referrals, lifetime value,
and advocacy. According to a study by Bain & Company, increasing customer retention by 5% can increase profits by 25% to 95%.

You can use loyalty incentives for your ecommerce business by creating and offering programs and benefits that appeal to your target customers and align with your business goals. You can also use tools like LoyaltyLion or Smile.io to create and manage your loyalty programs and track their performance. You can also use tools like ReferralCandy or Friendbuy to create and run referral programs that reward customers for bringing new customers to your business.

Protect Customer Privacy and Security

Another component of Amazon’s CRM strategy is its protection of customer privacy and security. Amazon uses encryption, firewalls, authentication, and other measures to safeguard customer data from unauthorized access, use, or disclosure. Amazon also complies with various laws and regulations that govern data protection, such as the General Data Protection Regulation (GDPR) in the European Union, the California Consumer Privacy Act (CCPA) in the United States, etc.

Protection of customer privacy and security helps Amazon maintain customer trust, confidence, and loyalty. According to a study by Cisco, 84% of customers say that they are more loyal to companies that have strong security practices.

You can use protection of customer privacy and security for your ecommerce business by implementing and following best practices and standards that ensure the safety and integrity of customer data. You can also use tools like Shopify or WooCommerce to create and host your ecommerce website on secure platforms that provide encryption, firewalls, authentication, and other security features. You can also use tools like TrustArc or OneTrust to help you comply with data protection laws and regulations in your region.

Improve Customer Satisfaction

Another factor of Amazon’s CRM strategy is its improvement of customer satisfaction. Amazon uses various methods to measure and improve customer satisfaction, such as customer feedback, ratings, reviews, surveys, net promoter score (NPS), customer satisfaction score (CSAT), customer effort score (CES), etc.

Improvement of customer satisfaction helps Amazon identify and address customer pain points, expectations, and needs, and provide them with better products and services. According to a study by American Express, 33% of customers say that they would switch to a competitor after just one bad experience.

You can use improvement of customer satisfaction for your ecommerce business by collecting and analyzing customer feedback, ratings, reviews, surveys, NPS, CSAT, CES, etc. You can also use tools like SurveyMonkey or Typeform to create and conduct online surveys to your customers. You can also use tools like Delighted or Qualtrics to measure and improve your NPS, CSAT, CES, etc.

TIPS

Use customer data to personalize recommendations and offers for your customers.

Communicate effectively with your customers using various channels and methods.

Create loyalty incentives for your customers to reward them for their repeat purchases and referrals.

Protect customer privacy and security by using encryption, firewalls, authentication, and other measures.

Improve customer satisfaction by collecting and analyzing customer feedback, ratings, reviews, surveys, etc.

CRM Strategies of Amazon: How the E-commerce Giant Wins Customers

Amazon is not only the world’s richest company, but also the most customer-oriented one. The e-commerce giant has been ranked as the best and most trusted online shopping platform for customers in North America and has a loyal following of millions of users worldwide. So, what is the secret behind its massive success? Amazon’s CRM (Customer Relationship Management) strategy, of course.

What is CRM and Why is it Important?

CRM is a system that helps businesses manage their relationships with their customers, from capturing their data at the point of purchase, to providing personalized recommendations, to offering support and incentives. CRM helps businesses understand their customers’ needs, preferences, behavior and feedback, and use this information to improve their products, services and marketing campaigns. CRM also helps businesses retain their existing customers and attract new ones, by increasing customer satisfaction, loyalty and advocacy.

CRM is especially important for e-commerce businesses, as they face fierce competition from other online sellers, and have to deal with the challenges of delivering goods across different regions and channels. E-commerce businesses need to create a seamless and engaging online shopping experience for their customers, and CRM can help them achieve that.

How Does Amazon Use CRM?

Amazon has developed its own CRM software in-house, which it uses to collect and analyze customer data from its website, mobile app, Kindle e-reader, Alexa voice assistant and other devices. Amazon uses this data to customize its users’ online experience, by offering relevant recommendations, deals, reviews, ratings, wish lists, Prime benefits and more. Amazon also uses CRM to communicate with its customers via email, text messages, push notifications and phone calls, to provide order updates, delivery confirmations, feedback requests and customer service.

Amazon’s CRM strategy is based on a strong emphasis on the customer, as its founder and CEO Jeff Bezos once said: “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.” Some of the key elements of Amazon’s CRM strategy are:

Designing the CRM so comprehensively that there is no need for customer service. Amazon’s website and app are user-friendly, intuitive and easy to navigate. Amazon provides detailed product information, high-quality images, clear prices, fast and secure checkout process, and reliable delivery options. Amazon also offers self-service features such as order tracking, returns, refunds and cancellations, which reduce the need for customers to contact customer service.

Providing human support when needed. Although Amazon tries to limit the need for human support, it also provides various channels for customers to reach out to its customer service team when they have issues or questions. Customers can contact Amazon via phone call, email or chatbot 24/7. Amazon also uses artificial intelligence (AI) to enhance its customer service quality, such as using natural language processing (NLP) to understand customer queries and provide relevant answers.

Communicating challenges proactively. Amazon understands that sometimes things can go wrong with its products or services, such as delays in delivery or defects in quality. Instead of hiding or ignoring these problems, Amazon communicates them openly and honestly with its customers via email or phone call. Amazon also apologizes for any inconvenience caused and offers compensation or solutions to resolve the issues.

Creating loyalty incentives. Amazon rewards its loyal customers with various incentives and benefits, such as free shipping, discounts, coupons, gift cards and more. One of the most successful loyalty programs that Amazon has created is Prime membership, which offers exclusive access to Prime Video, Prime Music, Prime Reading, Prime Gaming and other perks for a monthly or annual fee. Prime members also enjoy faster delivery times (such as same-day or next-day delivery), unlimited photo storage and early access to deals.

Protecting customer privacy. Amazon respects its customers’ privacy and security by encrypting their personal and financial data on its website and app. Amazon also gives its customers control over their data by allowing them to manage their preferences on how they want to receive communications from Amazon or share their information with third-party sellers or advertisers. Essential Topics You Should Be Familiar With:

FREQUENTLY ASKED QUESTIONS

Q: What is CRM?
A: CRM stands for customer relationship management, which is the process of managing interactions with existing and potential customers.

Q: What are the benefits of CRM?
A: CRM can help businesses understand their customers’ needs, preferences, and behaviors, and provide them with personalized and relevant solutions. CRM can also help businesses increase sales, retention, referrals, lifetime value, and loyalty.

Q: What are some examples of CRM tools?
A: Some examples of CRM tools are Salesforce, Zoho, HubSpot, Microsoft Dynamics, etc. These tools can help businesses collect and analyze customer data, deliver personalized recommendations, communicate effectively, provide human support, create loyalty incentives, protect customer privacy and security, and improve customer satisfaction.

Q: How does Amazon use CRM?
A: Amazon uses CRM to collect and analyze customer data, deliver personalized recommendations, communicate effectively, provide human support, create loyalty incentives, protect customer privacy and security, and improve customer satisfaction.

Q: How can I use Amazon’s CRM strategy for my ecommerce business?
A: You can use some of Amazon’s best practices for your ecommerce business, such as personalizing recommendations based on customer data, communicating effectively with customers, creating loyalty incentives for customers, protecting customer privacy and security, and improving customer satisfaction. You can also use various tools to help you implement and manage your CRM strategy.

Reference:

http://www.hcltech.com/sites/default/files/CRM_Trends_Insurance.pdf

https://eprints.soas.ac.uk/21171/1/Chapter%209%20-%2010%20Dec%202014%20-%20ANA-ACT%5B1%5D.pdf

https://www.investopedia.com/terms/c/customer_relation_management.asp