Last month, I spoke with Martin Rohde, General Manager of Commercial Customers at Amazon Business, for an in-depth discussion about Amazon’s B2B marketplace. Our conversation covered the origins of Amazon Business and how it strives to deliver the same level of customer service to commercial customers, and how it continues to innovate and incorporate advanced technologies, like machine learning, to continually delight its diverse user base.
Understanding what B2B Customers Want
A few years ago, Amazon’s leaders took a step back and asked themselves whether there were ways to better serve commercial customers. They “try to be extremely customer obsessed” and pride themselves in it, and it’s an ethos that Martin shares with his colleagues. As a result, they examined their marketplace from a B2B perspective and broke it down into two distinct parts: 1) the Amazon marketplace, where hundreds of millions of products are for sale, and 2) the web-based procurement portal.
Amazon’s leaders then listened to customer feedback to discover what businesses really need. From there, their technology teams looked to incorporate the best of Amazon’s existing technology, including machine learning and artificial intelligence (AI – more on this later), into a shopping experience tailored to the needs of businesses. As a result, they retained the Amazon marketplace, but according to Martin, they “significantly added to the selection and improved the pricing for businesses.” They added more than 85,000 business sellers and business-only pricing on millions of items.
Amazon’s leaders then considered what features B2B customers need that weren’t already offered on the marketplace. Things like invoicing, tax exemption, enterprise-level customer service, and ERP or eProcurement integration were added, as well as the option to create purchasing groups and enable managerial oversight, among other features.
Based upon further customer feedback, Amazon looked at a number of other customer “delighters.” Customers wanted spend analytics in order to gain visibility into what they’re buying. And they wanted to link this visibility with workflows like purchasing and payment. Customers also wanted to set spending thresholds (e.g., items over $1,000 require approval). Another delighter, what Amazon calls “credentialing,” helps business customers achieve their spend diversity goals by discovering new suppliers (i.e., minority-owned, service-disabled, veteran-owned, or women-owned businesses) on Amazon Business.
Watch Your Tail (Spend)!
One customer challenge that Martin says Amazon Business has helped to remedy is the notion of long-tail spend. According to Martin, this “long tail spend” can be costly for businesses because it is often difficult to manage, opaque, and unpredictable. But with the added spend analytics and reporting capabilities, Amazon Business helps customers analyze their spending and their supplier base in order to create efficiencies. As a result, customer supplier bases are becoming more cost efficient without losing what Martin calls their “breadth of selection.” Many Chief Procurement Officers (CPOs) report using Amazon Business spend analytics to gain visibility into their supplier base in order to become compliant with internal policies or external regulations. These spend analytics capabilities also drive end-user satisfaction and complete the trifecta of customer delight for Amazon Business.
According to Martin, “Amazon Business helps customers become more efficient when it comes to their supplier base, while maintaining breadth of selection, delivering end-user satisfaction, and providing full visibility and compliance.”
Consumerization: the First Name of the B2B Game
According to Martin, the “consumerization of B2B” is helping to enhance the user experience by making it as familiar and comfortable as possible. After all, shouldn’t buying for one’s company be as quick and painless as buying for one’s household? Amazon Business believes that it should, and its goal is to provide procurement departments with a buying experience that is comparable to what they’re used to at home while also addressing B2B users’ key need for 1) efficiency, and 2) compliance and visibility into their spending. They also want to provide some of the best parts of Amazon to its business customers, like freedom of choice.
To demonstrate his point, Martin described how a customer in California learned the hard way about the value of choice. This customer ordered a large quantity of headsets for its employees. When they arrived, the end users bemoaned the lack of feature functionalities they could have gotten on their headsets. One employee wanted one that he could plug into a device, while another one wanted a wireless headset. Another wanted an integrated microphone, and so on. Previously, companies would have to order a batch of the same thing. But now, companies have the ability to give their employees choice in finding the headset they want within a budget or below a threshold. One size does not have to fit all.
Innovation: the Other Name of the B2B Game
According to Martin, Amazon Business views technology innovation as a tool in their toolbox for helping to serve their customers. Amazon Business leverages machine learning (and to a certain degree, AI) to help customers match their product selections with what Amazon currently offers, plus alternative selections based on product specification and price. Another consumer feature that relies on machine learning (and has carried over to Amazon Business) is personalization, how it makes recommendations on products.
On Making Amazon Business Better
Although Martin was reluctant to offer any forward-looking statements during our conversation, he proffered one of Jeff Bezos’ favorite lines: “it’s still Day 1 at Amazon.” As Martin said, Amazon leaders have a very humble attitude about where they are and where they need to go to improve for their customers. Indeed, they continually innovate on behalf of their customers, and incorporate customer feedback.
Final Thoughts
For nearly a quarter century, Amazon has been revolutionizing the way consumers buy (and suppliers sell) goods and services, having pioneered the eCommerce world to become its standard bearer. And now, in its third year of operation, Amazon Business continues to apply that same customer focus to B2B commerce, with consumerization and innovation being its primary drivers on its path towards continued success. What does success in the B2B market look like? It looks like increased visibility into suppliers and long-tail spend, high compliance, and high user satisfaction. But at the end of day, especially at Amazon, it will always be Day 1, because Amazon will never stop innovating to enhance the customer experience.
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