3 Lessons From The Amazon and Zappos School of Business

3 Lessons From The Amazon and Zappos School of Business

What do have in Amazon and Zappos have in common? They are both big winners, with 3 powerful lessons to help you win big, too.

If you aspire to build a company on the cloud, you will do well to model Amazon and Zappos. So offer world-class products, automate almost everything with cloud technology, keep customer data safe and secure with flawless cloud security, deploy a brilliant marketing strategy to build your brand, and offer impeccable customer support. But there are 3 other more down-to-earth lessons, too, that you should heed because these will give your business an untouchable competitive edge in your marketplace.

Before we get to these lessons, let’s take a quick look at what makes Amazon and Zappos exemplary business models.

Amazon

Amazon was founded in 1994 as an online bookstore. Today, it is an “everything” store. Along the way, it has transformed ecommerce as we know it. The mindset of founder, Jeff Bezos, is responsible for its meteoric success among online retailers. The Seattle-based company’s $247.6 billion value even beats the $230.5 billion market capitalization of Wal-Mart.

Zappos

Zappos is an online shoe retailer, perhaps one of the best in the world because of three idiosyncrasies.

  1. It has an unparalleled focus on providing customer satisfaction.
  2. It offers free shipping—to the customer, as well as back from the customer if the shoes don’t fit.
  3. It has the “tightest” corporate culture known to humanity, with such tight-knit employee allegiance that outsiders refer to it as a cult.

Incidentally, the name comes from “zapatos,” the Spanish name for shoes. The extra “p” in the name is a prop to encourage proper pronunciation.

Founder Tony Hsieh now serves as its chief executive. Although the company was acquired by Amazon in a ground-breaking $1.2 billion deal in 2009, it behaves like a competitor to Amazon.

3 Business Lessons

Regardless of the size, scope, or service of your business, here are 3 invaluable lessons you can learn from these two business giants.

Lesson 1: Race Ahead With “A Well-Oiled Machine”

If your business is not on the cloud, you are paying too much for your technological infrastructure and performing well-below par.

One reason that Amazon and Zappos have been able to beat the competition is because of their superior cloud-based technology.

Ideally, you should transition to private cloud computing if you want to more closely model their seamless business processes. OnlineTech.com offers some compelling reasons why the private cloud (rather than a public cloud or a hybrid cloud) is the best possible choice: “In fact, according to Yankee Group’s recent survey on Cloud Computing, private cloud computing is preferred 2:1 over fully managed public cloud solutions. 67% of respondents preferred the private cloud, whereas only 28% preferred a fully managed public cloud, 21% preferred an unmanaged public cloud, and 8% were looking to a hybrid cloud solution.”

Here are five reasons why you should consider a private cloud analogous to “a well-oiled machine”:

  1. You increase security with dedicated hardware.
  2. You improve flexibility by replacing physical servers with virtual servers. You can change components on the fly. If you change your business processes and need to upgrade performance, it’s simple to get more RAM, a faster CPU, or anything else you need to power up.
  3. You get much better resource management through virtualization.
  4. You can recover faster from a disaster because of unbelievable redundancy.
  5. You save time and money because you eliminate the costs of using physical servers.

Lesson 2: Build A Strong Tribe

While using the best technology gives your business a huge advantage, it’s the collective will of your people who will make or break your company.

Zappos wants its employees to think of their co-workers as “family and friends.” In fact, it goes so far to make sure that employees are happy to come to work that they regularly offers them $2,000 to quit if they aren’t working there just for a paycheck.

Lesson 3: Create A Superior Customer Experience

It’s wonderful to have “well-oiled machines” to automate business processes. It’s amazing to have a culture that is more like a tribe than a gaggle of strangers thrust into the same working environment. But without satisfied customers, nothing moves.

According to a blog post entitled7 Customer Service Lessons from Amazon CEO Jeff Bezos” by customer service expert Kevin Baldacci:

“The latest results from the American Customer Satisfaction Index reveals Amazon.com as the reigning and undisputed champ in both Internet retailing and across the entire department in overall customer satisfaction. Amazon’s CEO, Jeff Bezos perhaps more than any business leader has taken the philosophy of truly caring for the customer and ushered it into the digital era. Bezos has built a company from the ground up purely based off of the unbending, unyielding philosophy of serving the customer across all departments. With a 164 million Amazon customers, few would argue Bezos as the key architect of building an authentic, customer-centric company.”

3 Lessons to Change Your Business

Although it may appear obvious for a company to use the best available technology to automate its process, create a fiercely loyal corporate culture, and deliver superb customer service, this rarely happens in the real world. Amazon and Zappos not only teach us that it’s possible, but model what needs to be done to achieve those three benchmarks of success.

 

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