By Tom Martin
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Last week Skift posted an article, Business of Loyalty: What the Travel Industry Could Learn From Amazon Prime, suggesting travel brands could learn a lot from Amazon’s famous Prime Service. Nothing could be further from the truth… here’s why.
Amazon Prime Isn’t a Loyalty Program
According to Webster’s Dictionary, loyalty is an act of “faith” disconnected from reward.
Amazon Prime members aren’t loyal… they’re cheap. That’s right… they didn’t sign up for the original $79 service and now the current $99 service because they love Amazon or are faithful to Amazon… they did it because they save a ton of money. In fact, the more you buy the more you save. And you don’t just save money, more importantly (and I’d argue the number one reason folks continue to use Prime) you save TIME. So while you could certainly call them Social Agents for Amazon, I think calling them loyal ones is a stretch.
Amazon Prime Changes Your Buying Patterns
Once you become a Prime member, you change how you buy. Before you had Prime you weighed the cost of shipping vs the cost of time to go to a store and purchase something. The really analytical of humans might even factor in delayed vs instant gratification factors… but hey, I flunked college Calculus twice, so guess who probably wasn’t getting that complicated in his decision making. But I digress.
Once you have Amazon Prime you no longer have that calculation. There is no shipping cost so now you simply decide “do I want to waste my time going to a store or would I rather watch another episode of House of Cards?” And House of Cards wins…regardless of what you’re buying.
And when you extend that mental buying mindset to everyday items like paper, socks, consumer packaged goods, etc., guess what… you don’t even bother doing the “do I want to…” comparison. The answer is simple… unless I need it within the next 48 hours, I’m buying via Prime.
At the highest end of Bezo’s Hierarchy of Buying you don’t even wait until you need something. See that you’re running low on coffee filters… that’s right, just open the Amazon app on your phone, scan the barcode and presto – reorder via Prime so you’ll have those new filters before you run out of the current supply. Store????? Who needs a store…. besides, there’s another episode of House of Cards that I can watch instead.
Don’t Confuse Loyalty With Reward
The Skiff article went on to discuss various travel loyalty programs, but again, those weren’t customer loyalty programs, they were customer reward programs. Spend more, use more, get more points or credits type of programs. Save up all those rewards and then redeem them for free stuff or upgraded service. This is no different than Amazon Prime where the value of membership increases as you buy more things that get shipped to you free.
Again, that’s not loyalty — I’m not loyal to Southwest Airlines because I Go to the full article.
Source:: Business 2 Community