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Amazon's 4 Pillars of Success: A Preview of Jeffrey Eisenberg's Pubcon SFIMA Keynote

Danny Goodwin
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amazon-boxesBy being customer-centric, continuously optimizing and innovating, and creating an agile corporation, Amazon.com has dominated the competition. Your company can as well, says best-selling author and online conversion optimization expert Jeffrey Eisenberg.

Eisenberg will be the keynote speaker at the Pubcon SFIMA Summit in Fort Lauderdale, Florida, on Thursday, April 24, where he will help digital marketers understand What You Need to Survive and Thrive: the Four Pillars of Amazon's Success.

SEW recently caught up with Eisenberg, partner at Eisenberg Brothers and Associates, and the author of Call to Action and Waiting For Your Cat to Bark?, to preview his upcoming keynote and offer us some insight into how Amazon.com became an online retail behemoth, and how companies can adopt what Amazon.com has done and win.

Danny Goodwin: I use Amazon a lot, as do many of our readers. I recently saw a figure that Amazon accounts for 30 percent of all e-commerce sales in the U.S. How has this happened? Why do we use Amazon so often? What has been the key to Amazon's growth and success?

Jeffrey EisenbergJeffrey Eisenberg: Amazon.com sold its first book in July of 1995. They ended 2013, selling $74.45 billion worth of stuff, all kinds of stuff.

The company did not start out knowing substantially more than most other businesses starting their efforts online, but because it was willing to think ahead, develop data-driven technologies and push the boundaries of how best to do business on the Web, it is now the largest online retailer. It now captures about 30 percent of every e-commerce dollar in the U.S. (and in many other markets as well), and it is also a successful B2B vendor, hardware developer and publisher.

Amazon is 10 years ahead of the curve and even leads strongly data-centric companies like Walmart. Amazon was built upon Jeff Bezos' vision and the four pillars of success:

  1. Customer Centricity
  2. Continuous Optimization
  3. Culture of Innovation
  4. Corporate Agility

DG: When looking at Amazon's success, what is one core tenet Amazon embraces that maybe other digital marketers aren't, but should be?

JE: "The most important single thing is to focus obsessively on the customer. Our goal is to be earth's most customer-centric company." ~ Jeff Bezos, founder and CEO of Amazon.com

DG: When looking at Amazon's optimization strategy, what impresses you most and why?

JE: Amazon continuously optimizes every aspect of their business. I don't mean the traditional marketing optimization tactics of A/B testing changing buttons or buyer flows but they optimize operations, marketing. finance, etc. To get a full understanding of how they push all of their operations to optimize it is worth taking a few minutes to look through the Slideshare Amazon.com: the Hidden Empire.

Amazon.com: the Hidden Empire - Update 2013 from FΛBERNOVEL

Back in 2004, we knew that Amazon.com was already doing more than 200 marketing optimization tests at any given time. Even today most companies average between two and five tests a month.

So imagine if Amazon has not scaled the amount of tests they had but continued to do only 200 tests a month and most of their competitors did even 10 tests a months how many more times is Amazon learning and optimizing over their competitors. The key is the Amazon.com understands that optimization is not a tactic or a project but it is a strategic competitive advantage woven into the management of their business and it's ultimate reponsibility lies with the CEO.

DG: Amazon and Google have become competitors in a few areas of late, such as shopping, entertainment, tablets, and so forth. Where do you see this fight going over the next few years, and who do you think would ultimately win in an Amazon vs. Google fight?

JE: Amazon and Google will both be winners. However Amazon, to a greater degree than Google, has a Bias for Action among their core values:

"Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking."

Their teams are organized for execution. They have small, cross-functional teams (like Apple where teams are not larger than two pies of pizza could feed) that are able to execute on things independently end-to-end without needed to gather resources from anyone other team. They have clearly communicated group goals and the means for all to see the data to understand how they are performing in real-time.

So when events happen like the death of a celebrity or the FAA allowing electronics to be on during takeoff and landing of planes they can and do act on it in minutes and can be live within a couple of hours. While most companies struggle with their corporate metabolisms to call a meeting in two hours, Amazon's culture allows them to completely reconfigure parts of their business to react in near real time.

DG: Is Amazon just so far ahead of everyone else it's game over? Or can companies compete with Amazon.com? If so, why? If not, why not?

JE: The game is not over. Nevertheless, most companies will not be able to compete; they won't even be able to catch up.

The Four Pillars of Amazon's success can be adopted by other companies, they will be other winners, too. I'll cover some of that in my presentation. If I tell you everything right now people might decide to take an extra coffee break during my presentation.


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