Amazon’s Lessons from Adopting Customer Obsession as a Core Principle

Transcript

[00:00:01] Steve MacDonald: Welcome, everyone, to the Contact Center Perspectives Podcast. I’m Steve MacDonald, your host, and today we have a very special guest and a very special topic. We have Vivian Malandrin. Vivian is the Senior Manager and head of Customer Experience at Amazon. You have quite a broad area that you’re in charge of.

[00:00:23] Steve MacDonald: You’re responsible for South America, all the way through Mexico and into Canada. So that’s a lot of responsibility. What we want to talk about today is Amazon’s lessons from adopting a real customer obsession as a core principle of your business. Numerous studies highlight how in today’s business world—whether it’s business-to-consumer or business-to-business—the customer experience is the number one sustainable competitive advantage for a company. Amazon is heralded as a leader in this area, so we’re very excited to talk to you about it. Just as a reminder or a little more background, you are a journalist by trade, and we’d love to hear more about that. You’ve worked on brands like Mercedes Benz. So, I’m going to turn it over to you to round out what I’ve shared about your experience, and then we’ll jump right in.

[00:01:22] Vivian Malandrin:  Perfect. Thank you for having me, Steve. It’s a pleasure to be here. Yes, I’m a journalist at heart. I’ve always loved hearing people’s stories, and I started my career in some newspapers here in Brazil. I’m located in Brazil, and then I realized, okay, this is nice, but it’s not what I want to do. So, I joined Mercedes, where I stayed for 12 years.

[00:01:48] Vivian Malandrin: I worked in various areas, including corporate communication and brand marketing, and then I became responsible for special projects, including customer experience, which I fell in love with. I love knowing that my job impacts other people’s lives. After 12 years at Mercedes, I received an invitation to join Amazon, the most customer-obsessed company on earth. There is no better place for me to develop my passion for customer experience. So, yes, that’s my story.

[00:02:26] Steve MacDonald: Well, maybe you can start us out by giving us an idea from the insider’s perspective: What is Amazon’s point of view on customer obsession, and why?

[00:02:40] Vivian Malandrin: We have those leadership principles, right? Those 16 leadership principles guide us in everything we do—from meetings to decisions to our daily activities. They are not just part of the culture; they are part of our day-to-day. Customer obsession is one of those principles, and I would risk saying it’s one of the most important. It’s intrinsic to Amazon.

[00:03:13] Vivian Malandrin:  Customer obsession means that leaders, like every Amazonian, will start with the customers and work backward. We always begin with the customer’s questions, pain, and feelings. From there, we develop our products and projects to make our customers happier. This is our main goal at Amazon.

[00:03:43] Steve MacDonald: I don’t know if it’s folklore or not, but there’s the idea of the empty chair at tables. Is that still alive? Tell us a little bit more about that.

[00:03:53] Vivian Malandrin:  Yes, that concept is very much alive. It’s a well-known practice at Amazon. In every meeting we have, we should have an empty chair that represents the customer. When we meet to discuss a new product, for example, we consider what the customer would think. We keep this empty chair concept in every meeting because it’s part of our core customer obsession. We always think about the customer’s opinion. When we don’t have the customer present or we lack customer data—for example, for a new product launch—we imagine what the customer’s opinion would be: would they like it or not?

[00:04:44] Steve MacDonald: Can you give me an idea of how important this is? Many companies have core values and principles that are written on their websites and sound appealing. However, in daily life within the company, they may not have much applicability. How important is customer obsession at Amazon?

[00:05:11] Vivian Malandrin: At its core, besides having the concept of an empty chair in every meeting, every leader should be very customer-obsessed. We are evaluated based on how customer-obsessed we are, and it is part of our personal goals. For example, when someone applies for a job at Amazon, during the interview, they will measure your level of customer obsession. For us, it’s fundamental. It’s not just something to put on a wall and forget about. Customer obsession is a very important leadership principle and is taken very seriously in our leadership, performance evaluations, interviews, and so on.

[00:05:53] Steve MacDonald: I know one of the reasons this is important is that KPIs and metrics don’t always show everything you need to know, right? What is it that metrics aren’t showing that you’re looking for, and how does customer obsession help with that?

[00:06:16] Vivian Malandrin:  Data is very important. We base our work on data, and we always try to extract insights and understanding from it. But sometimes the data doesn’t reflect a specific customer experience. For example, we believe customer anecdotes are very powerful.

[00:06:41] Vivian Malandrin: So, we don’t rely solely on data for our projects and actions; we also use customer anecdotes. Sometimes a piece of customer feedback can provide more information to guide us toward a new project or product improvement than the data. The power of anecdotes is something we use daily.

[00:07:06] Vivian Malandrin: We have an internal system developed for every Amazonian, where they can hear and read customer anecdotes on various topics. The power of anecdotes is a vital part of our customer-obsession culture.

[00:07:27] Steve MacDonald: So, you mentioned there’s an entire database of customer anecdotes for almost every situation. Could you explain how you use these, maybe starting with what an anecdote is and how you access them?

[00:07:51] Vivian Malandrin: Sure. I can give you a hypothetical example. Let’s say we look at the metrics and notice many customers are contacting us about wanting to return a specific type of chair. The data shows a spike in returns, and it may say things like, “the chair doesn’t fit in my house” or “I don’t want it anymore.” But we don’t get the full customer sentiment from that.

[00:08:27] Vivian Malandrin: So, we can go into the database, input the situation, product, period, and timeline, and search for anecdotes related to that chair. From the customer feedback, we might discover that the chair’s dimensions are different from what customers expected or that the images on the website aren’t accurate. This allows us to identify and correct the issue causing the misunderstanding.

[00:09:10] Steve MacDonald: So essentially, you’re getting deeper insights beyond the data. You can see a trend of product returns, but this helps you understand why it’s happening.

[00:09:24] Steve MacDonald: It allows you to go several layers deeper. We love stories on the podcast—actually, we retain information 22 times better when it’s told to us in a story. Do you have any favorite anecdote stories?

[00:09:41] Vivian Malandrin: Yes, I have one story that involves Jeff Bezos and a table. Jeff was listening to customer contacts because of the power of anecdotes, which were already in place at the time. He was shadowing a customer service agent, and they received a contact about a desk.

[00:10:03] Vivian Malandrin: The agent told Jeff, “Oh, the customer is probably going to complain that the table arrived damaged or scratched.” Jeff asked, “How do you know that?” and the agent replied, “This is the fourth contact I’ve had about this table just today.” Jeff immediately responded, “We need to do something about that.” This led to the creation of the Andon Cord mechanism inside Amazon.

[00:10:38] Vivian Malandrin: The Andon Cord concept comes from Toyota, where it’s used in the production line—when an issue arises, they pull the cord to stop production. Inspired by this, Jeff created Amazon’s Andon Cord, which allows customer service agents to flag a product when they receive multiple complaints. This triggers a specialized team to review the product, and it may be temporarily removed from the site until the issue is resolved. So, it’s not folklore, but a real story that led to one of the most important mechanisms we have at Amazon.

[00:11:30] Steve MacDonald: And so, this database—give me an idea in terms of how large it is, how often it’s used. Is it a requirement to use? Do people just naturally gravitate towards it? How important is it in your daily life as you’re doing your job anyway?

[00:11:49] Vivian Malandrin: I work with customer experience, so I use this database daily. But I would say the other teams use it every week, and this is very important. For example, if you want to understand if a launch is being successful—like, we launch a new payment method—what are customers saying about it?

[00:12:12] Vivian Malandrin: The product manager can go to this database, search for anecdotes about this specific payment method, and understand what people are saying. So, this is very rich and very useful every time we write docs because, in Amazon, we don’t use PowerPoint presentations—we write docs.

[00:12:30] Vivian Malandrin: Often, we include customer anecdotes to prove our points. Besides the data, how is the customer sentiment? So, I would say most of the teams use it weekly. This is part of the onboarding training for most people. We also do some in-person training about this database, so people can create dashboards. They can create a lot of things inside this database that we call Heartbeat.

[00:13:00] Steve MacDonald: Okay, now you’ve got to tell me a little more about Heartbeat.

[00:13:03] Vivian Malandrin: So, Heartbeat is this database based on customer anecdotes that we have inside Amazon. It’s used worldwide. You can find almost every customer contact there, not only by phone but also by email, and customer reviews on our website. You can also understand the number of contacts we are receiving about a certain topic. So, it’s a very, very rich database.

[00:13:33] Steve MacDonald: I mean, if you’re saying that almost every contact is in there, we’re talking hundreds and hundreds of millions, if not more. This is incredible, and I love that you call the database “Heartbeat.”

[00:13:46] Vivian Malandrin: Yeah, it’s a good name, isn’t it? 

[00:13:49] Steve MacDonald: Well, it’s indicative of how important it is in the company. 

[00:13:52] Steve MacDonald: So, you’re in charge of customer experience—that’s huge—and here’s this huge database. Tell me a little bit, just in your mind, how has it helped you and influenced you in managing the customer experience at Amazon? How important has it been? Maybe give us an example of how it’s changed your thinking or your mindset.

[00:14:16] Vivian Malandrin: I mean, this power of anecdotes is very Amazon-unique. Customer experience is becoming a trending topic in every company, but having this amount of anecdotes and resources to dive deep into a topic—it’s very, very Amazonian.

[00:14:37] Vivian Malandrin:  So, I’m in charge of Amazon’s reputation here in Brazil, for example. Unfortunately, in May, the southern region of Brazil had a terrible flood. We had to stop deliveries and returns. It was very sad what happened there; a lot of people lost their homes, and the airport was closed. A catastrophe.

[00:15:11] Vivian Malandrin: By diving deep into those anecdotes, we could understand what customers were going through and what they were worried about. They were worried that the orders they made were never going to get there, and they were going to lose their money. They were very worried about the return period, for example—“It’s expired already, and I have no way to return it.” So, with those anecdotes, we worked with internal teams to provide a good solution for those customers. We extended the return period, we guaranteed that all the customers with open orders would receive refunds, and things like that.

[00:15:55] Steve MacDonald: So, the customer service agents—they’re the front line. They’re hearing everything. I talk to chief experience officers and chief customer officers regularly, and they want to give more visibility across departments to the agents because they represent the heartbeat—the anecdotes, the thinking, the worries, and the concerns of the customers.

[00:16:23] Steve MacDonald: I would imagine you get anecdotes about products and feedback on products. That leads to another level of the conversation we wanted to have today, which is why the product is just one differentiator. Product is so important, but what did you mean by that? What’s more important than even the product in terms of its point of differentiation? And how have you seen that play out? That’d be interesting to know.

[00:16:53] Vivian Malandrin I think it’s been a generational change. I come from the automotive industry. The automotive industry is very traditional, and I can say that at Mercedes, we started by building cars.

[00:17:08] Vivian Malandrin: We were the first car manufacturer in the world. Back then, everyone wanted a car. I’m not saying that people don’t want a Mercedes now, but if you decide you want a Mercedes or an Audi, or any brand, and you enter a dealership and have a terrible experience—like, the staff doesn’t talk to you, they don’t know how to answer your questions, or you purchase the car, but it breaks down, and you’re stranded on the road for hours waiting for assistance—that will ruin everything for you.

[00:17:51] Vivian Malandrin:  You never buy a second car from that brand. I’m saying cars just to give a different example. For Amazon, it’s the same thing. Our product is the marketplace, so we sell a lot of products and do everything to guarantee a seamless, very good experience for our customers.

[00:18:12] Vivian Malandrin: Our website, our app, and our respective teams are always improving the customer experience to make deliveries and returns easier. We have dedicated teams at every step of the customer journey to ensure the experience is flawless because we know you can receive the product you want at home.

[00:18:40] Vivian Malandrin: You buy a bottle and receive the bottle. But if, for some reason, you want to return this bottle and the experience is terrible, you’ll think twice before buying another product at Amazon. So, the product is very important, but it’s the basics, right? It’s the experience that makes the difference in choosing one brand over another.

[00:19:07] Steve MacDonald: So, what you’re saying is that even though Amazon is number one in the world, you focus on customer experience because if that slips, it opens the floodgates for someone else to come in and do customer experience better. That can be more important than price or the number of products on the website. What you’re saying is that customer experience is the most important part of delivering the services Amazon provides. Is that a good thing?

[00:19:44] Vivian Malandrin: In my opinion, it is. We have the Amazon flywheel, something Bezos also created to explain Amazon’s success. It’s public knowledge. You can search for it. A very important part of the flywheel is customer experience.

[00:20:03] Vivian Malandrin:  If you provide a great customer experience, you will attract more customers. If you attract more customers, you will attract more sellers to Amazon. If you attract more sellers, you will offer better prices. If you offer better prices, you increase your sales. So everything starts with the customer experience.

[00:20:25] Steve MacDonald: I love it. Are there other stories or anecdotes you’d like to share with us? I know you have a million different stories, each helping us understand more.

[00:20:43] Vivian Malandrin: One thing I find very interesting about Amazon’s mechanism and methodology is working backward. We always start with a customer pain point, idea, or suggestion and work backward from there. For example, a customer said that when he read books on his laptop, he got tired. So we asked, how can we solve that? And we created Kindle.

[00:21:18] Vivian Malandrin: Working backward from a customer’s pain or anecdote is valuable for that reason. We can gain insights for our business to launch new products and projects. This method of working backward is very Amazonian, and any company can adopt it. You always start from the problem or desired result and trace your steps backward to today. This way, every milestone, deliverable, and detail is well-mapped.

[00:21:58] Steve MacDonald: I love it. With everything you’ve discussed and this customer obsession, I’m curious to know what you’re most proud of based on what you do at Amazon.

[00:22:12] Vivian Malandrin: I’m proud of some achievements. I’ll share one from my first year at Amazon. We had a customer contact us — the power of anecdotes once again. An older lady, around her eighties, called and said, “I know you just opened Amazon in Brazil. I have a computer, and I want to know how to purchase something.”

[00:22:44] Vivian Malandrin: She had no clue how to do anything on the computer. The customer service agent went above and beyond, taking his time to teach her how to create an email, create an Amazon account, and enter her credit card information. He walked her through every step of the process.

[00:23:13] Vivian Malandrin: After that, we created one of our help pages about how to create an Amazon account. This may seem basic, but when you’re launching a store, there are a lot of things to think about. We hadn’t considered that some people don’t know they need an email to create an Amazon account, right? Now, we have this step-by-step guide on our website. I think it’s a great story.

[00:23:46] Steve MacDonald:  I want to make sure we’ve covered everything you want to discuss. Is there anything else about being on the inside of Amazon, understanding, and implementing this that you haven’t mentioned yet? Or is there anything else you’d like to say?

[00:24:03] Vivian Malandrin: I think Amazon is a school on customer obsession, and a lot of companies could extract the best out of it and implement that in their own companies. So, there are a lot of things that I think, oh, if I knew this sooner, I would implement things differently at Mercedes, for example.

[00:24:27] Vivian Malandrin: So, I think a good takeaway would be: always, always think about your customer. Always try to understand what your customers are saying about your product, about your service. And I know that sometimes the reality is tough, or the company has a low budget, but you can go there and talk with the customers and just listen, right?

[00:24:54] Vivian Malandrin: You can go to social media and look at the comments on your page, for example. So, there are a lot of ways. You don’t have to have a heartbeat database. I know that few companies will have one, but you can start with a small company. This small company can go there, understand their customers, know your customers’ preferences, what they are talking about, and what they want.

[00:25:22] Vivian Malandrin: Sometimes you’re putting the effort in the wrong basket. So, I think this is a good takeaway: don’t rely only on the metrics. As I said, the power of anecdotes is very powerful. If you can do a survey or research or anything, talk with your customers. I think it’s a good way to start.

[00:25:44] Steve MacDonald: And everyone has the opportunity to give a bigger voice in their company to their agents that are talking to the customers every single day. So, that’s one of the big takeaways that I have here, that we should be reverencing their job and what they’re doing. We should be listening to them more because they have the gold, right? They have all the knowledge of working with the customers.

[00:26:10] Vivian Malandrin: Yeah.

[00:26:10] Steve MacDonald: So, I know people are going to have questions more than we’ve covered here in the podcast. Would it be appropriate if we gave maybe a link to your LinkedIn profile that people could reach out to?

[00:26:21] Vivian Malandrin: Sure, please do. I love to exchange ideas, and you can always connect. It would be a pleasure.

[00:26:29] Steve MacDonald: Well, Vivian, thank you so much for coming on and sharing, giving us some insights on the inside, and giving us the motivation, desire, and kind of the game plan of what we should be doing more and more inside our own company. So, thank you.

[00:26:46] Vivian Malandrin: Thank you, Steve. I appreciate it, and I think another important message that I would like to give— I know that your audience has a lot of CEOs, CFOs, and C-levels— it has to start with them, right? So, you can’t say, “Oh, I have a person that is taking care of customer experience in my team,” and leave it at that.

[00:27:08] Vivian Malandrin: We have to have the board of management on board. So, go there, listen to your customer contacts, stay in touch with your customers, and set the tone for your team. This is key.

[00:27:23] Steve MacDonald: That is incredible. We’ll use that as a quote and help people do that. It is a top-down thing, isn’t it? It has to be cultural. It has to start from the beginning. More words of wisdom. Thank you, Vivian, very much for coming on.

[00:27:39] Vivian Malandrin: Thanks, Steve. It was a pleasure indeed.