So, he is on the way out. Inarguably the most important and successful business leader of the 21st century is heading for the exit. Jeff Bezos will step down as Amazon CEO later this year to take up the role of executive chairman.
In the coming days you will read and hear a lot about the 57-year-old and his transformation from bookish geek to business titan. Of his rapacious intellect, entrepreneurial zeal and seemingly infinite appetite for challenge and growth. Bezos the disruptor. Bezos the innovator. Bezos the magnate.
All true. But even the most cursory Google search will confirm that the secret of Jeff Bezos and his stunning success has little, if anything, to do with any of the above. Bezos himself consistently and explicitly called out his main “obsession” throughout his legendary tenure running Amazon. He could hardly have made it any clearer.
It was all about the customer.
Watch any video of Bezos talking about business, or Amazon’s growth, or his own life lessons, and within seconds he will inevitably talk customer-centricity. In business school we call it ‘market orientation’. And you might also have heard it referred to as ‘customer focus’. Those concepts all mean that same thing. They mean that the purpose of a business is to identify, serve and delight a customer. Companies do not derive success from making products or from selling them. These are intermediate steps. If you follow the money all the back way to its origin, the point of a business is to understand and then satisfy customers.
‘The most important person in the room’
I know, I know. It sounds super obvious. “Listen to your customers.” But obvious is not the same as easy. The practicalities of most businesses mean that, as soon as they put down a textbook and pick up their tools, they lose focus on the people who pay for everything. The myopic process of looking at operations or products or sales as if these things are the most important business drivers begins in earnest. And the consumer is left lost and lonely.
The dirty secret of most companies is that they are run by product-obsessed engineers, cost-cutting accountants or revenue-driven sales people. Each perspective misses the fundamental truth of market orientation for different reasons. Jeff Bezos never forgot that truth, not once in a quarter of a century. And spent most days reminding everyone else under him not to forget it either.
He would often wheel an empty chair into meetings at Amazon HQ and use it to remind the gathered executives that “the most important person in the room” was the customer. He would make all his senior executives attend call centre training so they could literally hear the voice of the customer, over and over again. And he would read hundreds of the emails addressed to firstname.lastname@example.org.
In the early days he was literally the only person able to answer many of the queries. As the years passed and the billions accumulated, these emails became an important touchstone with reality. On countless occasions Bezos would read a customer email and silently forward it to the executive responsible with a single keystroke: “?”. A simple, menacing indicator that Jeff wanted answers.
Bezos knew his customers and could use that knowledge as the platform to invent the next thing.
I’ve seen this kind of behaviour before. Retail chiefs call it ‘walking the floor’. The idea is that the bigger and more senior you get, the further from the customer you are, and the more vulnerable and weaker you become. And as executives lose track of the market, so too do the companies that they lead. By staying close to consumers and reminding everyone in the organisation to do the same, Bezos created a company that existed to serve customers. Adopting a vision to become “Earth’s most customer-centric company” – was not the usual arrogant hyperbole of big business. Amazon really did aim that high. And it arguably achieved it too.
And it was not just empty chairs and big speeches. If you understand it properly, customer centricity is a vacuum. It is an awareness of what you, the manager, do not know. A darkness at the very core of the business. Proper marketing always begins with market orientation/customer-centricity and that then leads, inevitably, to the next step in the marketing process: that of market research. If market orientation is knowing that you are in the dark, research represents turning on the lights.
Bezos knew that if his boss was the customer he would need to go out and listen to her. So another hallmark of his approach was constant research and – perhaps more importantly – a corporate culture that was inquisitive and open enough to the learn the lessons that this research would reveal. I’ve met many a marketer that has amazing insights at their disposal but who simply cannot see or accept what those insights are clearly signalling. Without market orientation, market research is useless.
The story of how Amazon embarked upon perhaps the greatest feat of brand extension in corporate history is illuminating. Twenty years ago, Amazon was a seller of books, videos and music. But what next? One day, Bezos sat down at his desk and randomly picked a thousand Amazon customers. He sent each of them a short email that asked, “besides books, music and video, what would you like to see us sell?”.
It is classic Bezos. In the place of blue ocean innovation, he turned to his customers for direction. The list of things that came back was, according to Bezos, “incredibly long”. It represented whatever each customer had on their mind at that moment. One consumer suggested windscreen wipers. It was, Bezos later recalled, a list of “everything”. And a light went off in his head as the emails started to arrive. Amazon could expand into every category. It could be “everything” because the consumer was giving Amazon permission to do just that. And his research was revealing it.
It’s a famous example but also a potentially misleading one too. I must meet a marketer a month who tells me that Steve Jobs did not listen to customers because it would have stopped him being innovative and thus successful. Partly true. Partly not true. I’ve yet to see the results of any research where consumers lay out, perfectly, what they want, at what price and in what amounts, and how it should be distributed and advertised. That’s rarely how it works.
Instead, research allows us to understand the consumer. And from there, innovation and strategy and success can emerge. Steve Jobs got this. Bezos gets it even more. He describes all customers as being dissatisfied, just not aware yet of what that dissatisfaction will eventually be or the superior alternative that could eventually exist. For Bezos customer obsession was not just about passively listening to customers and giving them what they asked for. It was about understanding them and then inventing on their behalf. Because, as he famously observed, “it is not their job to invent for themselves”.
But this invention did not happen to the exclusion of or in opposition to the needs of the market, as my Steve Jobs mythologists would have you believe. It happened because Bezos knew his customers and could use that knowledge as the platform to invent the next thing. Insight is not the enemy of invention. It is its mother, waving from the window with a warm mug of a tea and proud look on her face.
And the best thing about these customer-inspired inventions is how successful they can be and how disruptive they initially appear. Bezos was quick to contrast his own obsession with customers with the slower, more common focus that rival companies had on each other. “If you’re competitor-focused,” he once observed, “you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.”
Terry Leahy said exactly the same thing when he took over at Tesco all those years ago. Another great marketer, Leahy had watched as Tesco had blindly followed the then dominant Sainsbury’s supermarket for its strategic direction. Such competitor orientation is folly because it is slow, because you are automatically behind your main rival, and because it may be a direction that suits your competitor and not you. Worst of all, it permanently prevents the focus on customers that should propel a good company forward.
You will inevitably read volumes in the next few days about the digital and technological foresight of Jeff Bezos. Remember that all of it came a distant second to customers. Famously challenged over the fact that he was going to approach retailing differently because he was an internet player, Bezos uncharacteristically lost his temper. “Internet shminternet,” he shouted. “It doesn’t matter to me… What matters to me is: do we provide the best service?”
It is the biggest lesson of marketing and the greatest insight that Jeff Bezos and his success can bestow upon you. Focus on customers. Always.