Gain insights into the mega-retailer’s successful customer loyalty strategy, plus tactics you can leverage in your own customer loyalty initiatives.
- Even without a traditional rewards program, Amazon continues to dominate in customer loyalty
- Putting the customer first is essential to meeting and exceeding customer expectations
- Regularly monitoring and updating customer engagement strategies helps keep customer retention high
- Leveraging data, testing and optimizing customer loyalty benefits can lead to long-term customer loyalty and engagement
Amazon doesn’t have a traditional loyalty program. Yet customers seem to have an unquenchable devotion to the e-retailer, even before the pandemic gave e-commerce in general and Amazon in particular a major boost. In fact, Amazon saw record growth in 2020, with a 38% increase in net sales and $21 billion in income, nearly double its 2019 number.1 So what is Amazon doing to inspire such loyalty — and rake in such revenue?
Below we share Amazon’s successful customer loyalty initiatives, how they do it, and takeaways you can use in your own customer loyalty and rewards programs.
Amazon Customer Loyalty Starts with a Great Customer Experience
Amazon founder Jeff Bezos believes that Amazon customers are loyal to the retailer right up until somebody else offers the customer a better service.2 That factor alone motivates Amazon to stay competitive with a strategic focus on customer loyalty.
At its core, an innovative customer-centric approach is what allows Amazon to maintain its enviable customer retention — and revenue — without a rewards program. Amazon’s entire focus is on the customer. From leadership decisions, to company goals and objectives, Amazon’s commitment to unparalleled customer service is, in its own way, a commitment to customer loyalty. Every action and every decision the e-retailer makes is on behalf of the customer.
Below are six Amazon customer loyalty experiences embraced by shoppers that makes this e-retailer a go-to favorite.
1: Best-in-Class Customer Service
If great customer service was an Olympic sport, Amazon would bring home the gold medal. With its hyper-focus on customer satisfaction and a great customer experience, Amazon’s level of customer service is practically a loyalty program itself. Here are some tactics that Amazon uses to nail superior customer service:
- Speed of order fulfillment
- Free returns
- Ease of purchasing and checkout
- Personalized recommendations and offers
- Diversity of products
- A variety of online and offline shopping options
2020 Retail Customer Loyalty Study
Our research confirms that Amazon is among the top retailers named most frequently as preferred shopping spots. Get exclusive loyalty statistics, learn how demographics affect customer loyalty and discover three consumer shopping personalities that impact your store every day.
2: Amazon Prime
Amazon Prime doesn’t fit the mold of a traditional, free rewards program, but it could be considered a pay-to-join loyalty program. Even with an annual fee of $119, Prime member loyalty is high, boasting a first-year retention rate of 93%.3 And 85% of Prime members visit Amazon at least weekly, with 45% making a purchase at least weekly.4
What makes Amazon Prime so enticing? Numerous features and benefits keep members engaged, with the most popular including free shipping and same-day delivery on select items, free access to streaming music and entertainment content, exclusive personal offers based on browsing history, and discounts at Whole Foods. Prime benefits have conditioned members to expect deals and incentives with other loyalty programs, and when other retailers don’t deliver that experience, Amazon Prime loyalty continues to grow.
3: Amazon Moments
This rewards fulfillment platform lets Amazon vendors reward shoppers for taking certain interactions with their brand through Amazon. Rather than offering points or reward tiers, vendor companies offer a small token of appreciation that’s delivered in the form of a digital or physical gift, such as a health and beauty item, or digital content, for example. These surprise-and-delight moments encourage Amazon customer loyalty and retention by giving consumers yet another reason to shop with the retailer.
4: Amazon Contributor Awards
Amazon, at its discretion, gives consumers rewards for contributing user-generated content on its website. Top contributors are rewarded based on the quality of their contributions and the engagement, helpfulness or interest that a post creates with Amazon customers. If selected for a reward, Amazon contributors are notified by email with the details.
5: Amazon Smile
Amazon Smile represents another tactic to build brand loyalty and generate goodwill. When shoppers make a purchase through smile.amazon.com, Amazon donates 0.5% of eligible purchases to the customer’s charity of choice. Shoppers can choose from over 1 million local and national organizations.
6: Shop With Points
This Amazon customer loyalty strategy lets customers redeem credit card points for Amazon purchases. While shoppers will get the most bang for their buck redeeming points earned on Amazon’s own credit card, customers can shop with points accumulated on other participating credit cards as well. Amazon touts this program as a convenience feature for its customers.
The Amazon Loyalty Plan: Improve and Enhance Customer Loyalty with Innovation and Testing
Amazon focuses on four principles that guide its marketing strategy: A customer obsession rather than a competitor focus, a passion for invention, a commitment to operational excellence and long-term thinking.
Innovation and testing have long been guiding lights for Amazon’s forward-thinking approach to e-commerce. Amazon leverages its wealth of data to continuously improve and enhance the customer experience. In fact, Amazon will often test a new concept on employees first or choose a specific market to quietly launch a new service. This agile strategy lets Amazon respond quickly to feedback, continuing to test and tweak until they get it right.
Take a Customer-Centric Approach to Improve Your Loyalty Program
Let’s be realistic. Most retailers don’t have the capacity to play on the same level as Amazon. But you can use some of the mega-retailer’s strategies to expand your own customer loyalty initiatives and increase revenue. Follow these Amazon-inspired customer loyalty tactics to grow or improve your loyalty program.
Focus on providing exceptional customer service to every customer, every time. For example, most shoppers now expect free shipping and returns. If you currently don’t offer this service, consider it now, even if doing so may slightly raise the price of your products. Ninety-two percent of customers say they’ll shop with a retailer again if returns are free and easy.5 Listen to your customers and reward them for feedback. Then use the feedback to improve customer service and customer loyalty.
Invest in Customers First to Reap the Benefits of Long-Term Loyalty
It takes effort and collaboration to move forward with a customer-first focus, rather than the traditional business-first strategy. But the payoff can be huge, in terms of greater customer loyalty and retention, which inevitability lead to more sales. Retailers positioned to succeed with customer loyalty the Amazon way are those that create customer-centric brand and loyalty experiences that engage shoppers and encourage them to return, again and again.
1. “Jeff Bezos Steps Down as Amazon CEO,” Dylan Byers and Leticia Miranda, NBCNews.com, posted Feb. 2, 2021, https://www.nbcnews.com/tech/tech-news/jeff-bezos-steps-down-amazon-ceo-n1256540, accessed Feb. 4, 2021
2. “Why Amazon Is the World’s Most Innovative Company of 2017,” by Noah Robischon, Fast Company, posted Feb. 13, 2017, https://www.fastcompany.com/3067455/why-amazon-is-the-worlds-most-innovative-company-of-2017, accessed Feb. 18, 2021
3. “How Amazon Maintains Over 90% Customer Retention — Updated 2020,” Mariano Rodriquez, Beamer, updated Jan. 28, 2021, https://www.getbeamer.com/blog/how-amazon-maintains-over-90-customer-retention-year-over-year, accessed Feb. 4, 2021
4. “Amazon’s Customer Loyalty Is Astounding,” Pamela N. Danziger, Forbes, posted Jan. 10, 2018, https://www.forbes.com/sites/pamdanziger/2018/01/10/amazons-customer-loyalty-is-astounding/?sh=5100538a11fe, accessed Feb. 4, 2021
5. “E-Commerce Product Return Rate — Statistics and Trends [Infographic],” Khalid Saleh, Invespcro.com, https://www.invespcro.com/blog/ecommerce-product-return-rate-statistics/ accessed Feb. 18, 2021
6. “Content Personalization Statistics: 43 Facts on Content Personalization,” Brent Heslop, Content Stack, posted July 10, 2019, https://www.contentstack.com/blog/all-about-headless/43-facts-on-content-personalization-marketing-strategy/, accessed Feb. 18, 2021