What can you learn from Amazon’s flywheel concept? Whether you love Amazon, hate Amazon or begrudgingly put up with Amazon, we can all admit, it’s an amazing success story that has changed and continues to impact all of our lives.
The beauty of how Amazon was built and has grown is that it all began on a napkin with their strategic development of something that was discussed a lot in the seminal book, “Good to Great.”
“Good to Great” is one of those legendary business books, that regardless of when you read it, what your age is at that time and what year you’re reading it, it still has relevance and still applies. The concept of a flywheel is discussed in the book.
The concept of a flywheel in business is that you have this wheel of things that work together and continue to spin and make the operation run more smoothly. Then, you just go faster and faster and your growth comes in. You achieve your goals of market share, and scale and customers and profits.
In “Good to Great,” the concept of Amazon’s flywheel was that they wanted to have a combination of the lowest cost structure, lowest price, more choice and more sellers, which would lead to more customers.
You can see how this concept of flywheel would work. If you have the lowest cost, and if you have more sellers, and you have more offerings, you’re going to get more customers.
And when you get more customers, that scale is going to kick in, and you’re going to be able to have even lower prices.
You’re going to get more people who want to sell, which means you have more offerings, which means you’ll get more customers, which means you’ll be able to continue to offer the lowest prices, get more people to want to sell, have more offerings, get more customers, and so on, and so on.
That’s the example of one of the most successful growth companies in the history of business.
A flywheel also combines marketing and customer strategy with operational strategy and organizational strategy.
Part of the strategy can be a lightning rod or cause stress or cynicism or frustration because people don’t really understand that there is organizational strategy.
How are we going to be built? What’s our structure going to be like? What type of leadership and management?
And there’s financial strategy, how you’re going to price things and what you’re going to do and what your philosophy is.
And then there is marketing strategy – which customers do you want to target and who you want to reach, connect and engage with.
When you develop your flywheel, you’re able to establish the way that your company is going to build upon everything that you do to keep getting better at achieving your major objectives.
It’s also going to help you to understand who your customers are and who you want them to be, and how you market.
Developing that flywheel can be huge for you. It obviously was huge for Amazon.
Your business needs to think in terms of your marketing strategy. What customer segments do you want to be in? What ones are you already in? It looks at how you’re going to systematically learn what those customer segments think, feel and want, then how you’re going to give that to them, when and where they want it at a price they’re willing to pay.
Then you can do the fun part, which is to tell them about it again and again.
When you tell them about it, it’s a story built by and for and about your customers, built by and for about your customers.
I want to practice what I preach, so let me tell you a little bit about the MASSolutions’ flywheel, which starts with systematically gathering insights. I often discuss the science of marketing and the science of storytelling.
There’s a science to systematically gathering insights, and those insights might be qualitative insights gained from talking to customers and tracking what we were told. It might be quantitative market research, it should be tied to target market segmentation, and competitive analysis.
It might be using tools such as predictive index to see who’s doing what and why, and what energizes versus what drains them.
We want to leverage the experience, expertise and instincts of each team member. We’ve gathered these insights, and we continue to gather and leverage the experience, expertise and the instincts of team members. That enables us to then develop customer experience solutions, and to create stories.
When you systematically gather insights with our intellectual property, how we do that, and we leverage our experience, expertise and instincts, we come up with customer experience solutions that help our clients and our clients’ clients. They help our customers and our customers’ customers, whose customer experience solutions.
And they enable us to develop top- and bottom-line storytelling, which goes to the next piece of the flywheel, which helps us reach, connect and engage with the target audiences of our clients or customers, reach, connect and engage with those customers, to change behaviors and mindsets.
While we’re doing that, while we’re reaching, connecting and engaging, and while we’re changing behaviors and mindsets, we’re still systematically gathering insights.
And we’re still leveraging the experience, expertise and instincts of each MASSolutions team member, which leads us to develop more customer experience solutions and to create better, stronger, more memorable top and bottom-line stories, which reach, connect and engage with target audiences to change behaviors and mindsets.
Our flywheel goes round and round, and helps our customers again and again.