Recently, I was listening to an interview with Jeff Bezos, CEO of Amazon, on HBR’s Ideacast series (you can listen to the interview here: Jeff Bezos on Leading for the Long-Term at Amazon)
Whilst the whole conversation was only 10 minutes long there a section, in particular, that stood out for me. Here it is, for you (from the transcript):
ADI IGNATIUS: Amazon has done a great job of self-cannibalizing its revenue streams, going from Amazon Store to Amazon Marketplace, from print to ebooks, and so on. In most companies, moves like those would be hard to execute without organizational turmoil. How have you managed the transitions?
JEFF BEZOS: When things get complicated, we simplify by saying what’s best for the customer? And then we take it as an article of faith if we do that, it’ll work out the long term. So we can never prove that. In fact, sometimes we’ve done a price elasticity studies, and the answer is always we should raise prices. And we don’t do that because we believe– and again, we have to take this as an article of faith– we believe by keeping our prices very, very low, we earn trust with customers over time, and that that actually does maximize free cash flow over the long term.
What I find really interesting about this is that despite the fact that Amazon are a very smart, sophisticated and innovative technology business they understand that data analysis, science, mathematics and economics will only take you so far and sometimes will point you in the wrong direction.
Therefore, in order to build better relations with their customers, become more customer centric and do what is right for their customers they have to do what they believe and feel is right.
I think there are lessons for many businesses here. Especially, those that are thinking about or striving to improve their customer experience, their customer service or become more customer centric.
Sometimes you have to forget the logic, the analysis and the data and just go with what you believe to be the right thing to do.
Sometimes we need to have more faith.