At age 52, Amazon CEO Jeff Bezos is worth $66.5 billion and recently surpassed Warren Buffet as the third richest person in the world. His fortunes have come largely from Amazon, which he founded in 1994. Today, Amazon has revenues of over $200 billion and is currently one of the largest retailers in the world despite having no physical stores.
At the center of this growth is Bezos’ relentless focus on customer strategy.
I remember those early years. In 2008, Amazon’s profits were $4.6 billion, compared to eBay’s $6.5B. As Amazon plowed its profits into its vast server farm and infrastructure, critics were skeptical of the strategy. But Bezos was adamant that a customer-driven strategy taking a long view would pay off.
It was in 2008 when Bezos summarized his view in a now well-known quote: “If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.”
Organizations today can learn a lesson from Bezos. In our current rapidly-changing environment, in addition to your current competitors, you also have new competitors popping up out of nowhere, often with a novel business model and significant financial backing.
While it’s critical that you are aware of your competition, it would be a mistake to let the competition direct your strategy.
Instead, as Bezos argues, develop a culture of relentless attention to your customers and their experience with you at all touch points of the organization. The more you understand your customers and their needs, the more you can understand how you can help them and deliver a fantastic value proposition.
Here are three things you can do in the last two quarters of 2016 to invigorate your customer strategy:
Simplify Your Mission Statement
Sharpen your mission statement into a clear and concise call to a purpose. Amazon’s is “To be Earth’s most customer-centric company where people can find and discover anything they want to buy online.”
Clarify Your Target Customers
Be clear on who your customers are. It’s often helpful to think of them in segments (we like to call the portfolios). Focus your efforts on segments that are a good fit and have the most potential. Understand their perspective and what their priorities are as they look to you for help. Be careful to avoid the temptation to be all things to all people; you instead end up as a mediocre solution that nobody selects.
Map Your Strategy
Use a one-page framework to map out your strategy for delivering customer value and reaching the targeted metrics articulated in your business plan. Tools like the Business Model Canvass, Value Stream Mapping, or the Strategy Map are helping in clearly articulating how you will manage your organization to provide direct value to your customers.
This article was written by David Baker. David is with Baker Strategy Group, a research and strategy consulting firm helping clients to make smart decisions and take effective action. A smart strategy is the art and science of understanding your target market making good strategic choices to allocate resources most effectively to grow your business.