A Valuable Customer Is Cultivated Through A Premium Loyalty Experience

Jun 2 2017

CC_blog_premiumloyalty_iconCustomer loyalty is one of the most intangible, yet important currencies a customer-facing business can collect. While it’s important to make a sale, it’s even more crucial to create a symbiotic relationship with anyone that interacts with your brand. Unfortunately, though, many businesses are falling short in consumer’s eyes. In fact, a recent study found that 77 percent of all consumers now admitted to retracting their loyalty more quickly than ever before. With such a large amount of shoppers taking a strong stance on loyalty, there is now a clear need for something different. The solution? A premium loyalty program.

That premium loyalty mindset not only builds confidence in your brand but gives your customer on-going and valuable rewards, in exchange for their continued financial investment. Amazon, which has been at the forefront of the premium loyalty movement, has shown the world the success of a well-run program. With benefits like Prime Video, free 2-day shipping, free cloud storage and much more, shoppers are getting on-going benefits which aid their everyday life. But with only a $99-a-year fee and a laundry list of benefits, how is it possible that Amazon succeeds? The simplest answer comes through the increased purchasing power of their Prime customers. When you view the total amount spent by a Prime customer, they, on average, spend 5x more than a non-Prime customer. With a customer that valuable, it’s clear that the constant addition of premium benefits is well worth the reward.


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Amazon didn’t luck into this loyalty windfall though; they closely followed the trends and pivoted to the quickly-changing consumer demands. When shipping fees were a pain point, Amazon introduced unlimited free shipping, and when Netflix was capturing the time and attention of millions of consumers, Amazon drummed up a worthy benefit in Prime Video. The results of this premium loyalty experiment have been extraordinary:

  • Prime now boasts a projected 80 million subscribers, representing 50% of all U.S. households; and
  • 91% of 1st-year members renew for a second year, and 96% of those members return for a third; and
  • The average Prime member spends about $2500 a year at Amazon

In fact, it’s not only Amazon Prime members pining for this type of premium loyalty programs, but consumers in general. According to recent data:

  • Nearly half (47%) of respondents in a survey said rewards in fee-based programs are better than rewards in free programs; and
  • 43% of consumers said that standard rewards programs require too much spending to reach the next level of status, 36% said the points or rewards expire before they can use them, and 33% said that it’s hard to use the rewards because of all the restrictions

Unfortunately, though, businesses just aren’t keeping up with the demand, which is why the average U.S. household is enrolled in 29 loyalty programs, yet active in only 12. Furthermore, without a differentiated loyalty program, consumers are now quickly jumping ship, without remorse, which makes the creation of a premium loyalty experience especially crucial. So, as e-commerce giants like Amazon grow and expand into new verticals, businesses must adapt to the changing climate and give consumers what they want—or risk losing their valuable customers to someone else.