Retention Strategist Master Spotlight: Amazon
You do not get to become the world’s largest company without doing something special when it comes to customer relations. This is an accolade that American e-commerce giant Amazon has held since it took over from Walmart in 2019. One of the most important factors for how Amazon got to the top of the tree has been its innovative customer retention strategies. Incredibly, Amazon retains over 90% of its customer base. We took a look to see just what makes people keep coming back to Amazon.
- Amazon Prime
A large part of Amazon’s breath-taking recent success is down to its Amazon Prime service. What started in 2005 as a paid subscription that gained you free two-day delivery has today become an all-singing, all-dancing way to stream video and music, access e-books and take advantage of tons of shopping offers. What is essentially a paid-loyalty scheme offers a massive range of benefits, with studies also showing that Prime members also spend around twice as much as non-members.
- Sales Events
In 2015, Amazon launched its first Prime Day. Prime Day is an event that takes place annually over a two-day period in the summer. If you are a Prime member, you have access to a wide range of deals and sales across Amazon. Incredibly, Prime Day in 2018 eclipsed the total sales figures of Black Friday and Cyber Monday put together, with a staggering 175 million items sold.
- Tailored User Experience
Amazon is a pioneer when it comes to algorithms which are built to learn about users’ likes and dislikes. Whether you disagree with the company’s use of your data or not, there is no denying that the suggestions that Amazon makes when you are using the site are uncannily accurate. The ease with which algorithms help you to find the product that you are looking for (and even the ones that you did not know you were looking for!) makes for a seamless shopping experience that people cannot seem to get enough of.
It would be difficult to praise Amazon’s success with customer retention without first mentioning the impact of its ever-growing domination of online markets. Amazon has made a habit of either buying up or outcompeting small e-commerce marketplaces and retailers. Nowadays, Amazon has become so big that it is hard to avoid it when you are looking for where to buy your stuff.
The sheer size and domination of Amazon over the whole retail and distribution network means that it can sell products are industry-beating prices. It might sound simple, but low prices are the surest way to get your customers to come back in the future.
Whether you like it or loathe it, it seems like Amazon is here to stay. Jeff Bezos started with a revolutionary e-commerce idea and has since built a retail empire which derives much of its power from its incredible customer retention rates. What the future holds for Amazon, nobody can tell!