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Subject: Re: UKNM: Three cheers Amazon UK
From: Ray Taylor
Date: Fri, 30 Oct 1998 16:12:09 +0000 (GMT)

Nick Sweeney <nsweeneyatjesus [dot] ox [dot] ac [dot] uk> said:

>> > Well as an exercise in building brand equity, the customer service
>> > aspects of the transaction were far more influential than the last
>> > banner (button) ad I saw for Amazon which said: "Books about +UK +rail
>> > +e...."
>It's experiential, though, isn't it? You can't *advertise* good back end
>stuff and customer service, I'd argue, through traditional media; you
>*can* encourage further purchases, once you've demonstrated to the
>customer that your system worked.

I don't think I made my point clear enough. By providing such good customer
service (which back-end efficiencies have a big hand in), Amazon have won
brand loyalty and are likely to get repeat purchases. So far, all the other
UK online purchase sites I have tried have fucked up when it comes to
orders, hence I haven't used them again.

The main role of the advertising is to create brand awareness and/or drive
visitors to the site and/or generate first-time sales. In this it has
succeeded, but without the quality of the service they would at best have
sold a single book. Thus, had the visit to the site been influenced or
generated by advertising, and only one book been bought, the cost (per new
visitor) of the advertising would have exceeded the revenue from the sale,
if published analysis of Amazon ad spend is anything to go by.

I guess you could advertise endorsements of the quality of the service but
with people like me spouting on about how great it is, you don't need to.
This is known in the advertising business as "word-of-mouth".

Going back to my original point, one thing that Amazon demonstrates
admirably is the value of the Internet as a medium for helping to raise
customer service to a revenue-generating artform. As such they have
justified a large part of their VC funding by creating huge value in their
loyal customer base.

Any UK venture, VC backed or not, that hopes to do the business when it
comes to online commerce, must understand the importance of the value of
customer service. If you cannot produce supremely satisfied customers with
big smiles on their faces every time, you will be stomped on by the
competition. And if you only ever sell one product per customer you'd better

be selling at over 100 per item, preferably over 500 per item, to cover
the marketing costs.

Ray Taylor +44 181 639 0015
nmc/adplan - www.nmcadplan.com
banner advertising - try it - one billion greenbacks can't be wrong

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