4 Things Amazon Teaches Business Leaders About Modern Processes

Jan 23, 2017
4 min read

Today's post was written by Evan Ellis, President and Chief Operating Officer at Xactly. You need only look at shopping behaviors this past holiday season to understand the impact of Amazon. Amazon has completely transformed business to consumer (B2C) selling. In doing so, it has become the world’s largest e-retailer, with over $100 billion of revenue in 2015 alone. However, Amazon’s biggest success is its innovation. By re-imagining processes through the use of big data and the cloud, Amazon has created a new paradigm and irreversibly altered traditional business models.Increasingly, executives understand the necessity to adapt and know that they must use big data as a tool to strengthen customer focus. According to Gartner research, nearly 90 percent of today’s companies expect to compete primarily on customer experience. By emulating practices introduced by Amazon, companies can improve processes to serve customers more effectively and drive increased performance. To understand the potential of this opportunity better, look at how new sales and employee compensation processes are increasing business value by applying the following lessons from Amazon.

Lesson #1. Use Data for Comparative Value

Amazon and other companies have amassed enormous amounts of data. Where Amazon has outperformed others is in how it’s used this aggregated data in a unique way to bring new value to their customers. In a brick and mortar environment, a salesperson can show you what accessories complement and enhance your purchase. Or a salesperson might direct you to a different item you might like based on insight into your preferences. Amazon does this for us online using big data – showing us what people, who have made the same purchase – also bought, and showing us the most popular items across product categories. To help users decide on items to buy, Amazon draws from over 150 million customer purchases. This type of comparative data holds immense promise for businesses. In the realm of compensation, it gives businesses the ability to quickly see how their compensation plan compares with other companies of a similar size or other companies within their market sector. Compensation is a huge line item expense and one of a company’s most strategic tools. With comparative data, you can build a competitive plan to attract and retain top talent. You can see the proven impact of incentives to drive top line performance. You can see whether your plan is aligned with market best practices.

Lesson #2. Deliver Instant Insight

A huge part of Amazon’s appeal is its ability to give us instant insight. Buyers can immediately see what goods are available, at what price, and their projected arrival date and time. Consumers love this. By seeing all of our choices, we can make better selections at the desired price point. Consider how this is being applied to compensation. Companies are learning, for example, that when they give sales reps instant insight into their incentive compensation plans, they improve behaviors. The ability to see and track performance increases motivation and satisfaction. This, in turn, helps organizations drive their own business goals.

Lesson #3. Make Access Mobile-Friendly

Amazon makes it easy for us to buy whenever and wherever. If you’re at Starbucks and remember that you need to buy a birthday present for a party your daughter is attending on the weekend, you can buy one that very moment on your iPhone. Done and crossed off the to-do list in less than the two minutes it takes the barista to make your drink. We’ve come to demand access to the data that’s most important to us via mobile. Let’s face it. For most of us, compensation ranks at the top. Variable pay – or incentive compensation – can be invaluable in driving performance. By not giving your team ubiquitous access to this data, you’re losing an opportunity to maximize its value. Put simply, you cannot manage what you cannot measure. Reps need the ability to monitor and track their performance against set goals to improve their and your ability to succeed. Data should be intuitive, visually pleasing, and easily accessed from any mobile device – giving them insight anytime, anywhere.

Lesson #4. Be Accurate

Amazon made a public commitment to fast, reliable and accurate deliveries for its customers. By doing so, Amazon differentiated itself from the get go from its competitors. No one was as fast as Amazon. Amazon capitalized on this even further with the creation of Amazon Prime – giving customers the ability to purchase premier service for expedited delivery. In fact, this has proved so successful that now over half of Amazon customers in the U.S. are also Amazon Prime subscribers. Amazon’s fulfillment speed and accuracy, through use of automated processes, has been key to its customer success. Likewise, your employees want timely and accurate payments – whether it’s a commission payment to a sales rep or a quarterly bonus for meeting performance objectives. Making sure that your employees are compensated accurately is critical to their trust. The cost of turnover is high – according to Aberdeen Group – it can be over $30K per rep per year. Keeping employees satisfied is essential to retain the top players – and appropriate compensation is a baseline for employee satisfaction.

A Stronger Foundation for Business Growth

According to Forrester Research, Amazon.com generated about 60% of online sales growth in 2015 – far outpacing overall online retail. Your business success depends on your ability to grow. These Amazon lessons are rapidly moving from the business to consumer (B2C) sphere to business to business (B2B). To stay ahead in this environment, you need to use data in more innovative ways, make data access and insight readily available to those to whom it matters – and do it all quickly and accurately.

  • Sales Coaching and Motivation
  • Sales Performance Management
Karrie Lucero
Karrie Lucero
Creative Strategist

Karrie Lucero is a Creative Strategist at Xactly Corp. She earned Journalism and Marketing degrees from New Mexico State University and has experience in the tech and SaaS industries, content strategy and creation, video production, and brand storytelling.