Amazon.com played an April Fool’s Day prank on me. My shaver head gave out April 1st, so I ordered a replacement on Amazon.com. I chose free shipping (without Amazon Prime, their monthly subscription membership that comes with free two-day shipping). The site promised a delivery in 8 to 11 days. After all, based past experience, I would likely get it sooner, since it was shipping direct from Amazon. In this case, however, they didn’t ship for 8 of the 11 days, instead reporting they were “preparing for shipment” for those 8 days. I ended up receiving the order on day 11 – just within the promised window.
So you’re probably thinking, Amazon stuck to their promised delivery window, so I should quit my bitching already. And you’d be right. And Amazon may have had a very good reason why they needed 8 full days to prepare my order for shipment.
But I don’t think so. My theory as to what happened (keeping in mind it’s only a theory), is that Amazon changed their policy regarding free shipping in order to encourage customers to sign up for Amazon Prime. After all, if customers can get free shipping with quick delivery without paying for Amazon Prime, then why would anybody ever pay for the premium subscription at all?
From a business perspective, Amazon’s change in policy makes sense. But they had to lower their expected customer service as a result – an expectation based on past behavior. True, I could shop elsewhere, and I might, but probably not. That’s the bet Amazon is making here.
For the audience of this blog, however, the question of the day is: would Amazon pull the same trick with their Amazon Web Services Cloud offering? Would Amazon ever lower their level of service on a Cloud offering in order to move customers to a more expensive choice?
The answer: absolutely. You might think Amazon simply wants to be the low cost leader because customers love low costs, and Amazon loves customers. And that’s true to a certain extent. But if they can squeeze more money out of you in a way that won’t jeopardize their pricing pressure on their competition and also won’t likely cause you to drop Amazon and switch to said competition, now you know they will have no qualms about doing so. After all, once you’re in Amazon’s Cloud, it’s tough to move. All you have to do is see a photo of me with an 11-day beard as a reminder.
