With more customers than ever, Amazon set another annual record for holiday sales this year. They have a roughly 50% market share in the e-commerce sector and have generated billions in revenue this year.
There are a million and one reasons why the retailer experiences such low revenue, but for now, let’s keep things straightforward and concentrate on just four of Amazon’s marketing strategies. We talked about three of these tactics at the beginning of the year, but we’re remixing them now that we know more and have ideas for how Amazon might really impress us.
Amazon’s success is largely attributed to its customer-centric philosophy and intense focus on efficiency. While in some worlds these two characteristics appear to be almost incompatible, in Jeff Bezos’s world they are essentially identical.
No time is wasted and customers are given what they want right away at every stage of the customer journey. The most crucial factor, in his words, is to obsessively concentrate on the customer. Being the business on Earth that prioritizes its customers is our aim. Amazon’s marketing initiatives by a top amazon marketing services company are also governed by this worldview. They aim to make everything as seamless, simple, and immediately satisfying as they can. Let’s examine how they accomplish this.
Strategy 1: Email Marketing
Email is possibly the most significant marketing channel used by Amazon. Amazon has developed an incredibly sophisticated email strategy at a time when the majority of businesses are still sending out email blasts (oh how we love that term). Every chance to market within a transactional email is exploited, according to Jimmy Daily at Vero.
The onboarding process, transactional purchase emails, various upsells, and review solicitation are just a few of the nine different types of transactional and marketing emails available. Owners of Amazon accounts who receive these messages become accustomed to the website and all of its features, which, generally speaking, encourages them to keep making purchases.
Amazon was the first to offer highly customized product recommendation emails based on, well, everything: on-site browsing, age, gender, location, past order value, and purchase history.
And, to be honest, other businesses still lag behind. While some retail websites do personalize recommendations, I receive dozens of promotional emails every day from established brands as well as well-funded startups, so I hardly ever see those kinds of messages. While a blast may “move the needle,” iMedia Connection correctly notes that it also “dampens the reaction for the customers who wouldn’t find that offer relevant.”
What Might Be Changed
While Amazon wins the prize for customized product recommendation emails, I must admit that their suggestions aren’t particularly…inspiring. Take the following instance. I had already ordered two yoga mat towels from Amazon when I got this message encouraging me to buy two more.
I provided all the information necessary to create this email because I had looked at a lot of towels and had initially added more than two to my cart. However, it’s possible that their recommendation algorithm shouldn’t make the assumption that I’ll want two more of the exact same product type that I just bought. Instead, I’d prefer if their search engine linked the purchase to additional yoga-related products.
Strategy 2: Reviews and Ratings
Of course, Amazon is a pioneer in this as well. Back in 1995, they were among the first businesses to even add a review system to their website. The reviews on Amazon are so well-known that they make for interesting Reddit and Tumblr content.
Reviews and ratings are, of course, widely used on e-commerce sites around the world, and for good reason. According to Annex Cloud, our platform for customized ratings and reviews increases revenue by 18%. Consumers do, after all, place 1,200% more trust in user-generated content (UGC) than they do in information from manufacturers and retailers.
Perhaps even more remarkably, Amazon started to make (at least) $2.7 billion annually when one minor feature was added to their review platform. Was this review helpful? was the subtle but effective addition.
The fact that Amazon asks for reviews for each product separately is another significant aspect of its review-gathering strategies. While many businesses send emails requesting reviews, the majority group these requests together. Amazon, on the other hand, will send out different emails for various products, even if you bought them all at the same time. Amazon’s email marketers do this to produce messages with extremely targeted subject lines.
Customers are more likely to notice a specific product name while perusing their emails than a subject line that merely requests that they “rate their purchases.” When compared to the general and vague email solicitation, people are more likely to click on the specific email request that specifically mentions a product they liked or disliked. Examples from Amazon and the Gap are provided below to demonstrate this.
What Might Be Changed
I haven’t recently submitted a review to Amazon. The last one I wrote was solely inspired by a bad product experience. I am, therefore, a statistic. Positive reviews are 90% unsolicited, compared to 90% of negative reviews.
Amazon and its Marketplace sellers do ask for reviews, but it’s odd that they don’t offer incentives to make that request more effective. There are many other ways to give customers an additional incentive to leave a review, even though Amazon doesn’t offer a points-based loyalty program with which to integrate reviews. Each accepted review up to a certain point counted toward an additional entry into raffles for reviewers. As an alternative, reviewers might receive a small discount for their efforts or even just coupons for particular goods.
If reviews were rewarded, more people would come back to write them without being motivated by a bad experience.
Strategy 3: Customer Loyalty
Amazon’s marketing is supported by its Prime customer loyalty program in terms of its value proposition. It comes as no surprise that Amazon’s success with Prime is practically legendary. Over 50% more people became members of it last year. According to Macquarie Capital, 51% of the increase in US eCommerce in 2015 was attributable to Amazon, and approximately 25% of US households have Prime accounts.
Although Amazon hasn’t disclosed specific figures regarding the revenue that Prime generates, in our experience at Annex Cloud, we’ve seen a 5% to 10% increase in revenue from our customer loyalty solutions. Additionally, members of the Amazon Loyalty program spend 5% to 20% more than non-members, and their purchase frequency also tends to increase by 5% to 20%.
The growth is even better when a referral marketing program is added to customer loyalty software, something that Amazon hasn’t fully investigated. After switching from a basic, conventional loyalty platform to one enhanced with brand advocacy solutions, one of our clients saw a 300% increase in revenue.
The fact that customers actually have to pay more for membership makes Prime a little unusual. Psychologically speaking, it’s conceivable that this feature generates a heightened sense of prestige and value. Regardless, a sizable portion of Amazon customers believes the convenience they receive is priceless. After all, they get cloud storage, a variety of free streaming movies and television shows, streaming music, free and quick shipping for millions of products, and a lending library for Kindle owners.
These features encourage loyalty outside of the Prime program, especially when combined with what some consider to be excellent customer service. Many of our clients have also had great success with membership-based loyalty programs that are similar to those offered by Amazon.
The fact that each of these benefits is ongoing is crucial. That is, rather than providing customers with one-time rewards for purchases, Amazon integrates its loyalty program participants into a full ecosystem with advantages that last a year (and much longer, if the membership is renewed). Customers can access all features of the program whenever they want, and there are tangible and immediate incentives for making additional purchases. There is no way to accrue points by making purchases. Prime is essentially seamless.
In order to conclude, I must stress that Amazon gives its customers a complete experience. On their website, shoppers can find anything they need, including food delivery. Even though not all retailers are able to offer every conceivable service, everyone can strive to give customers a more comprehensive shopping experience. Review request emails not only increase user-generated content (UGC), but also encourage visitors to return to the website.
What Might Be Changed
Amazon offers its customers a comprehensive experience in addition to loyalty. On their website, shoppers can find anything they need, including food delivery. With its Echo smart assistant and Dash refill buttons, Amazon is bringing its seamlessness into our homes. However, not all of Amazon’s marketing initiatives are perfectly integrated. Amazon could integrate everything from the aforementioned review writing to customers’ Instagram activity into a central hub on their own website if they implemented some sort of tiered rewards system based on engagement.
For actions like sharing and hashtagging photos, following Amazon on social media, referring friends to a Prime membership, and other similar actions, account holders may receive rewards. Amazon would gather even more user data, experience significantly higher engagement, and benefit from higher repeat purchase rates and average order values by rewarding these behaviors and tying them all to customers’ Prime accounts.
Strategy 4: Video
With its original shows like Transparent, Amazon has enjoyed tremendous success in the years it has been streaming videos. However, they recently introduced a new program that seems to be more of a direct marketing gimmick. The March 8 premiere of Style Code Live features a discussion of all things fashion. But what’s novel about it is that each segment has a direct link that viewers can use to purchase the products they see. Yes, it combines shopping, entertainment, and instant gratification all in one. For Amazon’s marketing initiatives, if viewers find Style Code Live entertaining and engaging enough, a whole new world may be revealed.
What Might Be Changed
Since this show is so new, we’re not really sure what should be altered. Even though not every retailer has the funding to produce a show like this, they can showcase videos of their own customers wearing and using their products and provide links to the product pages in the videos. Even Amazon might want to give this a shot. Real, happy customers are frequently a better indicator of a high-quality product than potentially paid endorsers like celebrities and influencers. Amazon could kill two birds with one stone if they combined regular customers with more famous people.
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