co-founder and CMO at Antavo, the leading customer loyalty technology partner of
dotdigital, specialized in helping
fashion and retail brands in Europe. They provide technology and strategy to
create customer retention programs so brands can form real connections with
their customers through engagement, exclusivity and advocacy. Their clients
include LuisaViaRoma, Represent, and Jimmy Jazz.
This year Amazon
gave a very unique Valentine’s Day gift to CRM teams all around world: Amazon
Moments. The concept in itself was enough to turn everyone’s head:
imagine a cross-platform marketing tool where you can quickly and easily set up
campaigns that reward various customer interactions – most of which aren’t tied
directly to transactions – with tangible benefits. So, does this mean Amazon
has entered the ring of loyalty programs with its own product?
No, not really. As
you’ll soon see, Moments does not include several key features, which
top-of-the-line reward programs provide. Nevertheless, Amazon’s initiative
pushes customer retention in the right direction by proving that brands need to
move beyond transactional rewards.
Amazon Moments work?
Before diving into the details, let’s examine what Amazon Moments offers marketers. The system is a framework that allows companies to set up industry-specific campaigns to reward customers when they meet the requirements of a custom trigger (called a ‘moment’).
For example, mobile game developers can give a free mobile skin to users who defeat the dragon on level 15. Any reward can be chosen from the company’s catalog, and Amazon will take care of the delivery.
every interaction, not just transactions
After a closer inspection, it’s clear that Amazon Moments is not a loyalty program, but a reward fulfilment platform that works on a global scale. Unlike a full-fledged loyalty program, Moments doesn’t offer any points or rewards tiers – which are very important elements in maintaining customer interest – and it also lacks a critical feature for marketers and CRM teams: insight.
Offering people rewards without understanding their needs and motivation is a huge gamble. So, if you don’t do your homework, you might end up losing money with this system.
But to give credit where credit is due, Amazon Moments has taken a very important step in customer retention by offering a reward model that uses physical and digital incentives instead of discounts.
Giving users a small token of appreciation for enjoying your product or service fosters true brand love and helps increase customer lifetime value. We’ve been on this soap box for years, telling brands and retailers that the future lies in engaging customers outside of the buying cycle.
This chart illustrates the tendency perfectly, and it’s gratifying to see that Amazon shares the sentiment.
win big with Amazon Moments?
After laying down
the pros and cons, let’s see who will benefit the most from using this new
- Businesses that lack the
fulfilment capabilities to reach a global audience
- Small companies that always wanted
a loyalty program, but never reached the point of designing one
- Brands with a large audience that
wish to deliver rewards quickly and easily
- Ecommerce players who don’t want
to compromise their profit margin with discounts, but still seek a potent
customer retention campaign
who should pass on the offer?
- Companies in direct competition
- Businesses that have already
established their own fulfilment channels
- Luxury brands, because gifts from
Amazon may feel off-brand – or even insulting – for affluent buyers
- Retailers that seek a more
fleshed-out loyalty program, which offers features like tiers, gamification, a
single customer view and insights, as well as personalization
Whether or not you use Amazon Moments, you’ll be affected by its presence on the market. It will no doubt open up people’s eye to loyalty programs.
More and more companies will start offering their own campaigns, prompting brands and retailers to focus more on personalization, email marketing, gamification, and advanced loyalty solutions, such as Recognition Loyalty.
The post How Amazon Moments affects customer loyalty in the most unexpected way appeared first on dotdigital blog.Reblogged 3 months ago from blog.dotdigital.com