It's All about Loyalty

If you've had an online store for any length of time, you've probably learned that you don't make much money, if any, from your first-time customers. Most of the profit is eaten up by the advertising required to get that customer to your website in the first place and then nurture him until he makes a purchase. The only profitable customers are likely to be the ones who make second, third, and fourth purchases. For e-tailers, getting those repeat purchases is the difference between life and death.

That's why I was fascinated when I received my latest box of books from Amazon.com. (I am a closet bookaholic.) In the place of the bookmarks I used to receive was a purple printed 9"x6" envelope with the words "Open Me! Convenience Enclosed." Peeking through the addressee window in the envelope was a sheet of ten 1-cent stamps. Here's what the enclosed 8-1/2"x5-1/2" card said:

Dear Friend,

From the start, one of our primary goals at Amazon.com has been to make the lives of our customers easier.... But recently, it struck me that despite all of our hard work there are still many inconveniences we haven't yet addressed. [He lists several minor inconveniences.]

Then I realized there was one thing we could do that we've never done before -- spare you the hassle of an extra trip to the post office! First-class postal rates went up a penny to 34 cents on January 7, so enclosed you'll find ten 1-cent stamps -- a necessity for using up your old 33-centers. Sure, we're talking 10 cents in value, but hopefully the time you'll save will be worth much more.

Sincerely
Jeff Bezos

Wow! Here's a man who understands his business, the business of delighting customers and extending his brand. Another name for this is Customer Relationship Management (CRM).

It's one thing for Amazon.com to become a household word. Bookmarks help with that. But to position Amazon.com as the company that tries to make things as convenient as possible for their valued customers -- that takes inspiration. Name recognition may help customers remember to come back, but a perceived goal of customer convenience makes customers want to come back. It inspires loyalty.

Rob Frankel, the branding guru, says, "Branding is not about getting your prospects to choose you over your competition; it's about getting your prospects to see you as the only solution to their problem."

Your goal is to become a customer's exclusive vendor of your particular product line. Several types of programs can be used to do this:

• United Airlines Mileage Plus allows passengers to accrue airline miles towards a future free trip -- now greatly expanded into all kinds of services.
• Discover Card's Cashback Bonus offers users a check at the end of the year.
• Safeway Club members receive discounts at the cash register and accrue miles with United Airlines Mileage Plus.
• ClickRewards Shopping Network from Netcentives motivates customers by rewarding them with frequent flyer miles, hotel stays, car rentals and brand-name merchandise. http://www.netcentives.com/solutions/clickrewards/
• MyPoints members earn points by responding to merchant offers. Members then redeem their points for valuable merchandise and services. http://www.corp.mypoints.com/media/
• ePoints Online offers a B2B loyalty program. http://www.epoints.co.nz/index_loyalty.htm
• Customer Loyalty/Reward Programs section is part of About.com's Business Majors topic, and includes links to many sites.

But a customer loyalty program, as effective as it might be, isn't the real key. A fervent customer-serving mindset as one of a company's core values is indispensable. That's what is behind Jeff Bezos' recent sheet of ten 1-cent stamps. Jeff's a good guy. He saved me a trip. And I'll remember that next time I think of Amazon.com.