There’s no question that Amazon puts increased pressure on small businesses. As online shopping becomes more convenient, retailers with similar goods to sell feel the pinch.
While small businesses aren’t necessarily fans of Amazon, it’s hard not to give the company credit for creating a successful loyalty program, Amazon Prime. Membership numbers are impressive – estimated to be anywhere from 60-80 million, with another 3 million joining the third week of December – but what’s even more intriguing is the shopping behaviors of Prime members, explains Time Magazine.
Subscribers order more often, order things they wouldn’t normally order, and here’s the kicker – they’re spending 150% more on Amazon after becoming members.
Who wouldn’t want a loyalty program with that kind of success? Well, there are a few lessons every small business can learn from Amazon Prime and its loyalty program.
Here are four lessons from Amazon Prime that you can make your loyalty program thrive:
1. Loyalty programs take time to gain momentum
When Amazon Prime launched in 2005, analysts were skeptical. Who would pay $99 a year to be part of a loyalty program that’s big claim to fame was free two-day shipping? The program had steady growth, and by 2011 the program was gaining more momentum than anyone predicted.
Today, Amazon Prime offers free two-day shipping, two-hour delivery via Prime Now in certain areas, and unlimited access to tens of thousands of movies and TV shows.
The lesson: Loyalty programs take time. Even the giant e-commerce site Amazon experienced “slow and steady” growth. If your loyalty program doesn’t take off in the first month or two, be patient. Customers want loyalty programs; it just takes some time for the membership numbers to rack up.
While acquiring members takes time, small businesses do have an upper hand here. You can ask customers face-to-face to sign up for your program. As customers are checking out, they can sign up for your program on the spot. Amazon doesn’t have that kind of relationship with its customers, so make sure you utilize that relationship status to attract customers to your program.
2. Offer membership “treats”
Amazon Prime decided to give its members more than just free shipping. The e-tailer started offering free eBooks, movies and music in 2011, and now, two-hour delivery in limited areas. Plus, Amazon gives members access to Lightening Deals 30-mintues before the public. These are just a few “treats” that add value to its membership.
The lesson: Use your loyalty program to offer more than just a free product here and there. You might not be able to team up with partners to offer free downloads of Downton Abbey, but you can join forces with neighboring businesses to offer something unique.
Businesses can also give loyalty members first-dibs on sales. The next time you’re planning a storewide sale, give loyalty members the chance to shop one-day early with a digital coupon. Or, consider opening your store afterhours for a member-only sale.
And go the extra mile to make the customer’s experience great. Here’s an opportunity to do what Amazon can’t – offer personalized service with a smile.
3. Offer convenience
One of the reasons that Prime members are smitten with the program is its level of convenience. Members can shop for just about anything and receive it quickly. There’s no driving to the store, struggling to find something in a maze of aisles or waiting in line. It’s simple. Convenient.
The lesson: If membership makes the shopping experience more convenient, your members will sing your praises – and return again and again. How do you do this if you’re not selling goods online? Think of ways to make shopping at your store more convenient.
For example, during the holiday rush set up a separate checkout line for members to help your preferred customers get in an out quickly. Consider designating a few parking spots for loyalty members only, or offer free gift wrapping.
Here’s another place where small businesses can outshine Amazon. There’s no way Amazon can provide the kind of customer service you can, so make sure excellent service coincides with these convenient perks.
4. Continue to be inventive
Even after 10+ years of existence, Amazon Prime continues to think of ways to wow its members.
At the end of 2015, The Huffington Post wrote about Amazon’s plan to test an Uber-like feature to have products instantly delivered to members living in urban areas. When a Prime member makes an order, he or she will have the option to have it delivered right away by drivers who can claim a delivery through an app. Amazon plans to pay the drivers $18-25 and hour to make deliveries worthwhile for all parties.
The lesson: Don’t let your loyalty program grow stale. Monitor and change your rewards from time to time, add new features and collect customer feedback to learn new ways to keep customers happy.
Don’t be afraid to try something new. If you have an idea, test it out on a small group of members and see where it goes. You don’t have to be a big corporation to be inventive.
By introducing something new, you have a reason to talk about your program. It keeps your program top-of-mind and reinvigorates your members. You want to keep a constant “buzz” around your loyalty program, and keeping it fresh and current is the best way to do that.
Which of these lessons will you use to improve your loyalty program? We’d love to hear from you. Share your thoughts in the comment section below.