Your journey as an Amazon FBA seller doesn't end when you make a sale. You need more than one-time transactions to succeed, and that’s why learning how to implement a strong customer loyalty program ensures your customers come back for more.
In this blog, we’ll dive into the benefits and strategies associated with each type of customer loyalty program and determine which type is most effective for your Amazon FBA business.
How Do Customer Loyalty Programs Work?
Customer loyalty programs provide rewards or incentives to customers, be it discounts, free products, or special offers. These programs aim to establish a strong connection with your customers and encourage them to make repeat purchases from your brand, which promotes loyalty.
Most businesses make their customers participate in a loyalty program by signing up online or joining a specific activity at a physical store. Once they register, they will receive a loyalty card or a unique identification number to track their purchases and earn rewards.
Although it may seem like customers have the advantage, gaining their loyalty is a valuable investment. It's a win-win situation where the business and customers benefit.
Types of Customer Loyalty Programs
- Points-Based Programs
Points-based loyalty programs are designed to reward customers for their purchases. When customers make a purchase, they earn points based on the amount they spend. These points accumulate over time, allowing customers to build up their rewards.
Once customers have accumulated a certain number of points, they can redeem the points for various benefits, such as discounts on future purchases, free products, or exclusive privileges.
For example, the Amazon Rewards Visa Signature Card allows customers to earn points on all their purchases, which can be redeemed for Amazon credits or used for eligible purchases on the platform. The latter provides additional benefits like cashback and travel rewards.
The idea behind this program is to encourage customers to continue shopping with the same brand or company to earn more points and enjoy the rewards.
- Tiered Programs
If the purpose of your customer loyalty program is to provide customers benefits or rewards based on their engagement or spending, then this type of program is suitable for your business. It organizes customers into different levels or tiers so they need to reach specific criteria to move to higher tiers.
The higher the tier, the more exclusive the perks. For customers to enjoy the rewards, they must meet the criteria you set. The criteria may include their total purchases, spending, or cumulative loyalty points earned.
As customers progress through the tiers, they unlock additional benefits and rewards unavailable to customers in lower tiers.
For example, you can offer shipping discounts or early access to deals exclusively for Amazon Prime members. In this case, customers need to have a subscription so they can avail these benefits.
- Subscription-Based Programs
Subscription-based loyalty programs require customers to pay a recurring fee to access premium benefits and services. Amazon Prime is one of the most well-known subscription programs that offers a comprehensive package of perks and features, such as fast and free shipping on eligible items.
Amazon Prime members enjoy exclusive access to Prime Video movies, TV shows, and documentaries. They can listen to music on Prime Music and read e-books, magazines, and comics on Prime Reading as part of their subscription.
Amazon Prime members also get early access to special deals and discounts during events like Prime Day. This allows them to shop for popular items at lower prices before they are available to the general public.
It's particularly appealing for frequent shoppers who value convenience and prompt delivery and want to save money on their purchases.
- Cashback and Rebate Programs
This type of program allows you to give customers a percentage of their spending back as a reward or incentive for their loyalty, making them purchase more.
The Amazon Prime Store Card is a store credit card that offers cashback rewards on eligible purchases made on Amazon. Members who use this card can earn cashback points to purchase new items.
Another example is Amazon Prime Reload, a program that offers customers a 2% bonus whenever they reload their Gift Card Balance using a checking account.
These cashback customer loyalty programs help customers save even more on Amazon, making it an attractive option for loyal shoppers to keep using the card for their shopping needs.
3 Strategies for Building a Strong Amazon FBA Customer Loyalty Program
Now that you’re familiar with customer loyalty programs, you need to figure out what’s best for your business.
Here are the three effective strategies to consider:
- Enhance Customer Experience through Tailored Loyalty Programs
There’s no one-size-fits-all approach, even with building customer loyalty programs. Go beyond generic offers and consider your customers’ unique needs and preferences, purchase history, browsing behavior, and interests.
Ensure your loyalty program aligns with their specific needs and desires, so they feel valued and appreciated for being loyal to your brand. Customers are more likely to engage if the incentives are helpful and relevant to them.
For example, if you’re a clothing brand, offer exclusive access to limited edition collections on Amazon or early previews of upcoming designs when customers make a minimum purchase of, let’s say, $100. This creates a sense of excitement and anticipation and makes them feel special for their loyalty, strengthening their connection to your brand.
- Give Exclusive Rewards and Benefits
Who doesn't love receiving rewards and bonuses? These are effective tools to acquire and retain customers because they believe they get additional value every time they receive free gifts, special deals, and limited edition offers.
To make your rewards program truly effective, offer incentives your customers can’t get from other competitors. Ensure the rewards are exclusive and something customers can’t easily find somewhere else, which gives them a solid reason to (continuously) choose your brand.
For example, if you’re a cosmetic brand, give your customers a bundle set that only the first 100 who signed up to your online app can get. It will create a sense of urgency and encourage customers to stay engaged to get their hands on the unique items.
- Make It Fun and Engaging
Make your customer loyalty program more exciting by setting challenges for your customers to complete. Give them badges or points for specific actions to motivate your customers to participate and stay loyal to your brand.
For example, you can challenge them to make certain purchases within a given timeframe or encourage them to refer friends to your brand. They can either earn rewards or unlock special perks when they accomplish it.
Remember to make the experience simple and enjoyable, and don’t overwhelm your customers with complex rules. Focus on making it interactive and fun to deepen your relationship with them and contribute to the success of your Amazon FBA business.
Most Amazon FBA sellers use customer loyalty programs to keep and grow their customer base. It’s not just about awarding points, coupons, or discounts. It’s also about creating a unique experience for your customers, urging them to repeatedly choose your products over those of other brands.
Evaluate what type of customer loyalty programs work best for your Amazon FBA business and decide which strategies will help you build a strong program for your business.
Do you need help in getting started? Contact us at Rank N Bank today!