Inside Amazon Loyalty Programs: What Sellers Need to Know
Updated on March 2, 2021
Feedback, care, and trust are the gateways to loyalty. These are what drive Amazon’s loyalty programs to keep customers and sellers happy.
As companies seek more ways to engage with customers, loyalty programs grow. According to LoyaltyOne’s Loyalty Big Picture Study:
- The global loyalty industry is estimated to be worth $74 billion.
- Companies invest around 2% of their sales in loyalty initiatives.
Additionally, the McKinsey Consumer Paid Loyalty 2020 survey states the following:
- 62% of customers spend more on a brand after joining their loyalty program.
- 59% choose to buy from the brand they joined over their competitors.
- 43% are likely to buy weekly after joining the loyalty program.
The bottom line is that it is hard to earn a buyer’s loyalty, and pretty easy to lose it.
Customer loyalty is crucial for e-Commerce businesses since it can considerably boost profits. Of course, it has a more immediate impact than attracting new buyers.
Why do customers lose interest?
This happens, in most cases, because they don’t understand the benefits of a certain product, or they believe that the incentives or benefits they’ve received after a purchase aren’t worth it.
It’s clear that companies have to listen to what consumers want. The customer-centric approach Amazon has followed for decades is a testament to this. Hence, we’ve decided to take a dive into Amazon loyalty programs.
Let’s take a look at what Amazon has been doing to keep their customers and sellers happy.
Amazon Loyalty Programs
Consumers evaluate your brand to determine whether it’s worth their time, money and support. Premium loyalty programs are effective tools to convince them of your worth.
The first step to create an effective loyalty program is to listen. When you hear what your customers want, you can deliver the best brand experience. In return, you will reap great benefits:
- Make better customers.
- Find and retain new shoppers.
- Increase brand engagement.
- Generate additional revenue.
- Boost your e-Commerce success.
Amazon realized that building the best premium loyalty programs would require listening to customers, so they did. Here are three Amazon loyalty programs that will help you create a successful Amazon marketing strategy for 2021:
1. Amazon Prime
Amazon Prime is at the core of Amazon’s growth, and it keeps growing.
Image Source: Amazon Prime
When Prime started, the idea behind it was to prepay for “free” and fast shipping. Shoppers could pay an annual fee to receive two-day delivery on Prime products for a year. This perk encouraged customers to return to Amazon and get their money’s worth. It’s a short-term benefit for customers, and a long-term strategy for Amazon. The results speak for themselves.
Let’s look at some Prime data surveyed by Consumer Intelligence Research Partners:
- As of September 2020, Amazon Prime has over 126 million members in the US.
- 64% of consumers who sign up for a free Prime trial convert to a paid membership.
- Prime subscribers have a 93% retention rate after the first year.
- 98% of subscribers stay on Prime after two years.
Source: Getbeamer
Prime became hugely successful because it addressed shipping costs. It also gave customers the ability to find products quickly, and Amazon Prime keeps adding more perks.
- Prime members can enjoy streaming content, Prime Day, Whole Foods discounts, and Prime Now delivery.
- Products featuring the Prime badge receive a higher search ranking because Prime members shop more frequently.
- Many users will only purchase items that bear the Amazon Prime badge.
All these benefits are customer-centric. That is what makes Amazon Prime so successful: it is an investment in the customer, not the products.
Charging an annual fee allows Amazon to offer the best benefits to its members from day one. In return, customers make the most of their shopping journeys. This is the goal of a successful loyalty program.
2. Amazon Launchpad
Image Source: Amazon Launchpad
Selling online is an open opportunity for small, new brands, but it’s tough for these businesses to make a name for themselves. That’s why Amazon released the Launchpad program in 2019.
As the name suggests, Amazon Launchpad is designed to launch new products. Launchpad exclusively works with products created through crowdfunding, accelerators, and incubators. This is an exclusive Amazon program for new products and brands. If Prime is a customer-centric loyalty program, then Launchpad aims to benefit new sellers.
Launchpad offers enhanced marketing tools and tutoring. The goal is to help new clients boost their success on Amazon, and to keep them on the platform. Here are some of the enhanced benefits sellers can get using Amazon Launchpad:
Onboarding support
This tool helps sellers get their products listed on the marketplace. It also ensures their inventory is and stored in Amazon’s warehouses. At the end of onboarding, products will be in the FBA and Prime programs, ready to ship. Once the marketing and selling begin, the buyers’ experiences will be positive.
Brand HQ
New businesses often lack the proper marketing expertise to make sustainable sales and survive. That’s where the Amazon Launchpad Brand HQ service comes in.
Brand HQ is an online learning portal. It offers courses, consulting services and webinars for sellers to learn the ins and outs of online marketing. Launchpad sellers can take advantage of Amazon’s knowledge to create great product listings and marketing campaigns.
Marketing Package
One regular product listing can take months to rank high on Amazon. The Launchpad Marketing Pack aims to push items out there. They use the following placements to achieve this:
- Placement in the ‘New Releases’ section on the Launchpad homepage.
- Placement on the relevant Launchpad category homepage.
- Product linked in email communications.
- Potential placement in Prime Day and holiday sales.
The typical product stays in the Launchpad program for about a year. By the end, sellers will have a successfully launched product and the tools needed to replicate the process, and Amazon will have loyal new sellers on their platform.
3. Amazon Moments
Image Source: Amazon Moments
Amazon Moments allows sellers to deliver tailored rewards to increase customer engagement.
Disney is one of many brands that have tested Moments, Amazon’s newest loyalty program. The company offered a $5 Amazon credit to “Disney Heroes Battle Mode” game players for reaching level 15 in the game. This strategy increased Disney’s net revenue almost sevenfold.
Amazon Moments allows sellers to deliver tailored rewards to increase customer engagement. The process for using Moments is simple:
- Pick a specific action you want users to complete.
- Determine the rewards you will give in return.
- Set a budget for your Amazon Moments campaign.
- Amazon creates a tailored reward landing page.
- Plug the rewards links into an API.
Sellers can invite shoppers to participate in an action to get a reward. If the customers complete the action, they will receive a special link to claim their reward.
Customers don’t have to do anything but shop. Vendors just set the budget and rewards, and Amazon takes care of delivery. Plus, sellers pay Amazon only when actions are completed.
Amazon Moments is a better way to gain loyalty for sellers and for Amazon. Amazon takes care of the back-end heavy lifting in exchange for a small fee and continued support from vendors.
Amazon Moments is a direct-to-consumer loyalty strategy. The goal is to provide mutual value: selling goods that buyers deem worth their time, money and data exchange.
Go the Extra Mile
As a seller, there are many strategies you can use to build customer loyalty on Amazon. Two of these tools are Amazon FBA and product listing optimization.
Amazon FBA
FBA (Fulfillment by Amazon) simplifies shipping and cuts down on fees and delivery time. It frees you from renting storage and hassling with shipment difficulties.
You only have to create product listings, and prepare and ship your stock to an Amazon warehouse. Amazon will take care of the rest.
Using FBA will grant you these benefits:
- All your products will be automatically enrolled in Amazon Prime.
- Your items will arrive at or before the promised delivery time.
- You will get better scores because of Amazon’s guarantee.
- Listings are eligible to compete for the Buy Box.
- Customer support is handled 24/7 by Amazon staff.
- You only have to worry about having enough inventory at Amazon’s warehouses.
Consider enrolling in FBA to provide your customers with the best experience. Remember that fast deliveries improve your selling performance and build loyalty.
Listing Optimization
Improve your product listings with SEO and great content. The right keywords will boost your search rankings. Here’s how to begin:
- Include the most search-relevant keywords in the title, backend and bullet points.
- Make sure your products’ images look good and tell how the product will benefit customers.
- Write precise product descriptions so shoppers can understand your offer.
Listing optimization will drive you to the top of the search results. This can potentially drive more sales and conversions.
Final Thoughts
According to the McKinsey Consumer Paid Loyalty 2020 survey, 83% of consumers expect personalized content and experiences after they join a premium loyalty program. Most important of all, customers expect to have a say in what they need. If shoppers don’t get immediate value or the best brand experience, they’ll go elsewhere.
Amazon’s Prime, Launchpad, and Moments are three of the most successful loyalty programs out there. This is because these services are tailored to address specific customers’ needs. Loyalty can’t be won with off-the-shelf programs. Customer feedback, care, and trust are the gateways to loyalty.
As a seller, joining a loyalty program is a great step for generating additional revenue and boosting your success on Amazon. If you offer great products and support, and listen to your clients, satisfied buyers will be happy to come back.
