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Branding Laws · Internet Marketing · eMarketing · Internet Advertising · Online Branding |
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Branding Laws · Internet Marketing · eMarketing · Internet Advertising · Online Branding |
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Amazon.com and Customer Relationship Management
April 26, 2003
Amazon.com and Customer Relationship Management
Jeff Kang
Figure 1: Official
Amazon.com Logo
CRM: Customer
Relationship Management
A holistic process of
identifying, acquiring,
retaining, and growing
customers.
What is Customer Relationship Management?
Consumer relationship management, like the name implies, is the process of
creating and maintaining relationships with business customers or consumers.
Companies that use CRM usually have large databases that collect information
about their customers. This in turn, is used to acquire, retain, and develop a
relationship.
How is Amazon.com using Customer Relationship Management?
Amazon.com has been regarded as a leader when it comes to using Customer
Relationship Management. In order to retain their customers, Amazon.com
utilizes cookies to keep track of your preferences. They give their customers
the option to open an account with their website. When people sign up, the
company has the capability of keeping a record of all the transactions someone
has made. Included in the records are information such as:
· Credit card information
· Customers’ shipping address
· Customers’ billing address
· A status of all your orders
· Product preferences
With this information, the company can then keep a track of your visits and
have advertisements, product promotions, and discounts, designed personally
for them. If their records show that you have an interest in gardening or
snowboarding, then they will advertise products, and recommend books relating
to your interests the next time you visit their site.
The information gathered can also assist them in making sure that their
customers are satisfied with the level of service that they received. Every time
a customer contacts Amazon.com with concerns, customer service
representatives have your exact records and can help turn a potentially bad
experience into a satisfying one.
How did Customer Relationship Management help increase profits for
Amazon.com?
Customer Relationship Management helped increase Amazon.com’s profits in
many ways. The most important way is that it turned an impersonal sales
median into a personal one. Selling over the internet does not allow for
personal relationships to develop and therefore customers do not have any
sense of loyalty to an online vendor. With Customer Relationship Management
Amazon.com’s customers have a sense that they are important as consumers.
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Customer Relationship Management also increases profits for Amazon.com by
cutting advertising costs. With CRM they can focus on more profitable
customers, rather than wasting their money and energy pursuing non-profitable
ones.
The account feature has also increased profits for Amazon.com by minimizing
the time required to check out of their online stores. Many internet users are
impatient and the use of CRM is beneficial to the company because consumers
can now just press one button to fill out all the information needed to make a
purchase.
Conclusion
Amazon.com has been the model internet company when it comes to utilizing
Customer Relationship Management. The system has allowed them to gather
information about their customers, and design advertisements and promotions
to appeal to them individually. It has made the transaction process effortless
and made customer service more efficient when it dealt with customer
complaints. With all this information on their consumers, Amazon.com has
been successful in analyzing the data to acquire, retain, and develop a
relationship with their customers, and at the same time increase their profits.
References:
1. Patton, Susannah, Talking to Richard Dalzell. CIO.com. June12, 2001.
http://www.cio.com/research/crm/edit/061201_amazon.html
2. Thompson, Bob, CRM and the Internet. Business Week. 2002.
http://www.businessweek.com/adsections/crm/internet.html
3. Venkatraman, Santosh. Customer Relationship Management – Not Just
a Fad. University of Arkansas at Little Rock, 2001.
Principles of Internet Marketing (MGRS 324) Spring 2003. University of
Nevada, Reno
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