Here’s an interesting story I wrote about Amazon.com for this week’s big How We Buy Now package in BusinessWeek. Amazon has developed an excellent reputation for customer service and this story provides some insights into their strategy for developing customer loyalty, which is based around harnessing customer passion.
Amazon: Turning Consumer Opinions into Gold
The Web giant’s cache of consumer-generated reviews lures ever-more shoppers, who increasingly research products before buying
By Spencer E. Ante
When Amazon.com (AMZN) first began letting customers post reviews of products in 1995, many people thought the Internet retailer had lost its marbles. Letting consumers rant about products in public was a recipe for retail suicide, critics thought. Now, almost 15 years later, customer reviews are as common as hyperlinks, and a retail Web site that does not have feedback loops is considered passé or irrelevant. In fact, more than 5 million consumers have posted tens of millions of reviews on Amazon.com, says the Seattle company.
Amazon’s review program reflects a new reality for the way consumers shop in the Digital Age: The Internet has become the world’s greatest research tool, and consumers hardly buy anything anymore without first getting the skinny online. Some 70% of Americans say they consult product reviews or consumer ratings before making a purchase, according to an October 2008 survey by Penn, Schoen & Berland Associates, a research and consulting firm. Amazon has played a central role in the change in consumer behavior by being the first successful Web retailer to embrace consumers’ views. “What we try to spend our time on is harnessing customer passion,” says Russell Dicker, Amazon.com’s senior manager of community.