Friday, April 6, 2012

Value Destruction: The Lesson for Amazon

I have been following a Customer Discussion on Amazon which I truly find amazing. You see I like Amazon, and they have been great over the past few years. They have great potential. Yet for some reason they are "snatching defeat from the jaws of victory". The issue is their delivery policies. The used UPS or Fed Ex or USPS as the standard delivery. Now these guys are generally reliable, vetted out, etc so one gets what one expects.

The Amazon changes its policy and for its Prime Customers, it decides to use low cost delivery services. Now this is a problem. I guess for gated communities they are not allowed in, I gather that they often fail to deliver and then outright lie about it, they threaten in a thug like manner etc. My solution is to pay for next day delivery, Amazon gets more money and I do not have to worry about the thug driving up my driveway, but since I live in that part of New Jersey where the thug is at more risk than the resident, yes think Sopranos, I have little problem.

But the issue is Amazon, why are they destroying their reputation, and with almost a hundred pages of complaints, not a word from Amazon. This is a classic example of value destruction. If they want more money, say so, if they want to charge more for UPS, then say so, if they want something, use customer loyalty, it was great. But not now. This is the most amazing example of self immolation in the corporate world I have ever seen.

The risk to Amazon, lost customers, the real risks, a massive shareholder suit because they knowingly and willingly destroyed a market with malice aforethought! At least that could happen in today's world. I really wonder why they allow this to get so bad, just stupid management? I doubt it, arrogance, possibly, or what? I keep recalling that sign behind my desk, "If all else fails listen to the customer!" Bezos seems to have slipped up on this one, why!