Loyalty Strategy

Amazon Prime Is Not a Loyalty Program

Photo by Daniel Eledut on Unsplash

Monday was a national holiday in the US and Canada. The rest of the world may not care much, but we took a needed break from the grind. During the weekend, we wanted to share something that caught our eye and brought us back to thinking about customer loyalty, holiday or not.

In a world where the printed word is fading to the background quicker than the shy guy at a high school dance, Bloomberg Businessweek is a true standout.

Bloomberg recently published its “How-To” issue and amidst heady topics like “how to grill the perfect cheeseburger” or “how to land on Mars”, I found the best topic of all: “How to Run a Loyalty Program”.

The story was penned (as told to Brad Stone) by Greg Greeley, currently President and chief operating officer at Opentrons. His topic was about how he collaborated with Jeff Bezos to find a way to get consumers to shop more on their “fledgling” 10 year old e-commerce site. The story took us back to 2004, when Greeley was serving as a vice president for worldwide media at Amazon.

Together, he and Bezos came up with the answer to the tough question. It was called Amazon Prime.

Even though Prime was launched with a focus on “all you can eat free shipping”, the two execs viewed the program as a way to deliver a premier shopping experience to their customers. Going way beyond free shipping, vendors across the board were soon asking how they could contribute to the Prime program.

According to Greeley the impact of Prime was clear from the beginning saying,

“Lots of analysts were questioning how we could afford it, because if you looked at the math, the revenue we were collecting didn’t match the cost of our shipping. What was not public was how much engagement the service was driving. What we quickly saw with Prime members was a good combination of repeat visits and putting more than one item in the cart.”

Most loyalty practitioners would nod heads at the previous statement. After all, engagement should be enhanced by a well-built loyalty program. But Greeley goes on to comment that “Amazon Prime is not a loyalty program” throwing down his opinion on a question that is often still debated among loyalty insiders.

Greeley explains,

“Because it’s a great experience, people who use it become loyal. Other programs get caught in this trap of thinking how expensive it’s going to be. Or how to deceive customers into thinking that it’s more than it is. But doing the hard things right generally ends up working every time.”

Embracing the hard things. Doing the hard things right. Sounds like not only a good way to run a loyalty program, but maybe even your business.

Amazon Prime Is Not a Loyalty Program
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