Like him or loath Jeff Bezos, you’ve got to respect his foresight and customer acquisition strategy…

When Bezos launched Amazon in 1994 why did he decide to sell books through an online marketplace?

Books are heavy, are expensive to ship and generate small margins.

At the time people were sceptical, with many business analysts asking why Bezos decided to start an online bookstore during a time when publishers were in a panic over shrinking book sales.

Bezos founded Amazon in the dawn of the internet after becoming intrigued with the exponential growth of online usage and sales. His gamble to quit a lucrative position at a New York City hedge fund to start his online bookstore has paid off handsomely.

But the initial product he sold, didn’t matter so much, for Bezos it was about finding a product that could be shipped without breaking and would provide lots of customer data.

About a year after founding Amazon Bezos was exhibiting at a national publishing conference and hung a sign above his booth proclaiming Amazon was the ‘Earth’s Biggest Bookstore’.

Intrigued Roger Doeren (COO of Rainy Day Books) as reported by the New Yorker) questioned Bezos on where, specifically, his bookstore was located, to which Bezos replied “Cyberspace”.

Bezos then explained ‘he intended to sell books as a way of gathering data on affluent, educated shoppers. The books would be priced close to cost, to increase sales volume. After collecting data on millions of customers, Amazon could figure out how to sell everything else dirt cheap the internet’.

His strategy was brilliant, Bezos knew once Amazon had gathered enough customer data, he’d have a winning formula to push beyond book sales and be able to sell everything else over the internet.

Bezos has built a business with the customer at its core, understanding early on the lifetime value of their customers and their associated key characteristics to keep them returning.

We’ve also designed a customer centric business, although it’s slightly different to Amazon’s model of delivering products in the quickest time and at the cheapest price.

Our business provides office technology solutions, and after research, we found people wanted short term penalty free agreements, with guaranteed fixed prices and lifetime warranties.

…which provides certainty & peace of mind, resulting in many customers staying with us for life too.