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Outlier’s Path

Customer Obsessed, Competitor Aware

Amazon has become synonymous with relentless customer obsession. Jeff Bezos has publicly stated in many forums that Amazon is customer obsessed vs. competitor obsessed. He explains, “there are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.” Therefore, at Amazon, “we’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards.”

Any early customer of Amazon knows their customer service was sub-par, but they improved quickly. By the time I joined Zappos, I had become a student of Amazon, reading every article, blog, book, or shareholder letter I could find. The more I learned, the more that line “we are customer obsessed vs. competitor obsessed” sounded as Amazon protesting too much.

While at Zappos, a creepy crawler would slowly and randomly crawl every page of our website over a week, even our out-of-stock pages, which we later found out was used to construct a price catalog. We would receive orders from the same IP address for two of every SKU in stock to be delivered to two locations throughout the year. We looked up the address of these two locations, and they were Amazon Fulfillment Centers. Exactly a month and two months after the order date, the two items would be returned separately through our automated returns process. If this happened today, we might suspect someone asked ChatGPT to write such a script as a joke, but back then, a human had to code such an odd script.

Years later, at the first management committee meeting after Amazon acquired Zappos, I asked Jeff Bezos and Jeff Wilke about the odd script. They chuckled and acknowledged that it was their benchmarking team. I was astonished that Amazon would have a benchmarking team.

Benchmarking is one of those practices that can give us a directional data point and let us know how we stack against our competitors, but not much more. Benchmarking won’t help us define our strategy to win; it won’t help us come up with our differentiation; it won’t help us develop the inputs that will drive better output. Moreover, our competitors are also moving ahead, so our benchmarking information is undoubtedly dated when we receive them. We need more than benchmarking to help us become world-class.

For the reasons above, I’ve generally loathed benchmarking requests and prefer first principles or customer-first thinking, and I thought Amazon was on the same page. Instead, Bezos explained that Amazon is customer-obsessed (first) and competitor-aware (second). Bezos expanded that he is always interested in learning from every customer but only in benchmarking against and learning from what a competitor does best.

“Customers are always beautifully, wonderfully dissatisfied…and want something better, and your desire to delight customers will drive you to invent on their behalf.” Therefore, customer obsession will lead us a long way, but now and then, one of our competitors will do something clever, and we should be aware.

Every day, our world keeps moving forward, so we are either moving ahead or falling behind the rest of the world. Remember to be customer-obsessed (first) and competitor aware (second) as our guide for staying in the lead.