What Makes Amazon.com Work?
- By Kyle James

Awareness

Amazon.com has a strong awareness position due to the fact that it has been around for so long. Amazon.com has become synonymous with electronic commerce and is often looked at as the torch bearer for the industry. Amazon has benefited from its brand name in that it is a unique name and hard to forget. Thus, in my opinion, awareness for the company had been easier to spread.

Amazon.com has promoted its brand predominantly online. I personally have never seen an Amazon.com television commercial. Not only does Amazon.com do standard online advertising but they rely heavily on their affiliate program to spread awareness to consumers. With thousands of affiliates, the Amazon.com name is spread out all over the Internet on affiliate websites. In exchange, Amazon.com pays their affiliates a commission on any sales generated through their personal website.

Exploration

When it comes to the exploration stage, Amazon.com is very successful when dealing with online consumers. Amazon.com strongly encourages visitors to explore their website without pre-registering. You can even add products to your shopping cart, read product reviews, and do price comparisons without registering first. Also in this stage, Amazon.com becomes an attractive exchange partner to consumers due to perceived value. This value is in the form of low prices and a great selection of products to choose from. When surfing the Amazon.com website, bargains abound in every department. Often with savings up to 55% off the manufactures suggested retail price.

Commitment

Amazon.com's development of the commitment stage of the customer relationship is most impressive. First, they do an outstanding job creating a sense of community on their website. They offer a service called 'Friends and Favorites' where consumers are encouraged to sign up and get useful product information from people they have hand picked. This is done by the user as they explore Amazon.com. For example, when a user encounters an interesting reviewer or friend whose opinion they trust, they simply click the yellow 'Add' button on his or her page. With that, they are now a part of your 'Favorite People' list. This strongly encourages commitment as users build their own personal network and watch their 'favorites' page grow with opinions and recommendations they trust.

Another way Amazon.com creates commitment from online users is through strong individualization techniques. For example, when registering at Amazon.com for the first time you are asked your interests so they can personalize the site just for you. Also, Amazon.com has the ability to individualize your shopping experience by recommending products they feel you would be interested in based on your past browsing habits. This starts to build a sense of commitment as users customize the website to their own personal liking. All of which creates a strong sense of obligation and responsibility.

Dissolution

Dissolution takes place when one or both parties leave the relationship. It is my opinion Amazon.com would only terminate a relationship with a registered customer if they broke any part of the terms of use. This would include violation of stated return policy, misuse of the Amazon.com auction procedures, or using profane language when giving product reviews. Amazon.com would end the relationship in order to give their good and valuable users protection from the "bad apples" in the bunch.

On the flip side, users may choose to dissolve their relationship with Amazon.com for a variety of reasons. Amazon.com exists in the virtual world, where the customer always has the option of terminating the relationship. This could be due to finding better online alternatives. With the growth of companies like Overstock.com and Smart Bargains.com, the online shopper has many more options at his or her disposal. Perhaps, the user found better customer service or perceived value at another online retailer, thus leaving Amazon.com permanently. Also dissolution can happen when the Amazon.com shopper simply no longer has a need to buy something online.

© 2005, Kyle James