Case Study

How Amazon Prime Redefined Customer Loyalty

Jun 27, 2018
Amazon has come a long way from being an online bookstore to one of the biggest e-commerce and media businesses in the world. With a wide market reach and unfaltering popularity, it’s no doubt that they will lead the e-commerce industry for years to come.

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But this success can’t be attributed to Amazon’s diverse investment portfolio and high-risk mentality alone. The core of Amazon’s growth actually comes from its loyalty program, Amazon Prime. How exactly?

Amazon Prime members nearly spend 5x more than non-members. 91% of first-year members renew for another year and 96% of those return for a third. Even more impressively, More impressively, there are now more than 100 million paying Prime subscribers worldwide. That’s how vast and strong the pull of Amazon’s loyalty program to consumers.

But what’s so special about it?

It is easy to understand.

There are e-commerce stores that are difficult to shop at. They ask customers a lot of questions that delay the purchasing process. At the same time, they bombard customers with too much information, which can turn off a lot of potential business.

In contrast, Amazon Prime will show the customers all the benefits the moment they sign up without the annoying info overload. It explains each benefit along with visuals so customers can easily digest all the information they need to know even if they just skim the page. Most importantly, the payment process is quick and easy. All it takes is a couple of fields of information and that’s pretty much it.

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Customers have more shipping method options while enjoying faster delivery time

This is perhaps the most popular perk among Amazon Prime members. With their next day or  two-day shipping options, Amazon Prime addresses the perennial problem of online shoppers: slow delivery.

And they are not all talk. Amazon came up with Amazon Prime Air where customers can have their orders delivered within 30 minutes.

Amazon Prime also offers members free returns which removed another purchase barrier. Whether intentional or not, Amazon Prime reinforces the tendency of customers to buy impulsively. The moment the customers feel the urge to buy a new dress or pair of shoes, they naturally want these items on their doorsteps right away—something Amazon Prime takes care of without ease.

Coming up with innovations that cater to customers’ paint points helps Amazon Prime continuously provide satisfaction to their members and keep their loyalty.

It comes with utility and entertainment.

Since people are more focused on the fast delivery that Amazon provides, members tend to overlook the other benefits that come with it. When it comes to streaming movies and music, people usually go with Netflix or Spotify but Prime actually have both: Prime Video and Prime Music.

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Additionally, members can also store unlimited photos and browse through thousands of e-books. This is definitely a great channel to access to great products and services online.

Not all businesses can be Amazon but there are things to be learned from them. Amazon took a huge risk and spent millions on Amazon Prime to be who they are today. They saw and addressed the weakest points of e-commerce to fully dominate the market. Prime works because it’s not just a marketing ploy; it’s a program that represents the best Amazon has to offer. From products, services, and content to shipping and returns, Amazon Prime continuously ensure the benefits are relevant and valuable to customers who are paying top dollar to subscribe to their premium loyalty program. It may have been a long shot but, all these are the keeping their customers loyal.

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