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Mike Gorun

Mike Gorun Managing Partner/CEO

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Amazon Loyalty Program Promises More Deals Than Black Friday

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In a recent press release, Amazon announced that, in celebration of its 20th birthday, July 15 will be “Prime Day” – a day on which Amazon claims it will offer more deals to its loyal Prime members than Black Friday. Amazon promises, “new deals starting as often as every ten minutes,” with the ultimate goal to make this a global shopping event. For non-members, Amazon is offering free 30-day trials of its paid loyalty program.

 

Amazon has steadily increased the value of its Prime membership by adding movie and music streaming services, in addition to its free 2-day air shipping. And, that’s not all -- to increase the buzz and introduce the new Prime Photo service, social media contests are being held, with a rather enticing $10,000 gift card as the prize. The hype surrounding Amazon’s announcement, along with its offer to non-members of free trials, will almost certainly result in a membership enrollment spike.

 

Well … this is all very interesting, but how does it apply to the auto industry?

 

Dealers who use loyalty programs gain two valuable assets:

 

1)    A customer that enrolls in your loyalty program is telling you that they will be returning. This mental commitment in the customer’s mind increases with each visit, as they progress towards a reward, or use the membership for savings. As long as you consistently provide a good customer experience, the chances of defection by that consumer decrease. In addition, members of loyalty programs tend to visit more often and, on average, spend more when they do, which increases revenue in all departments.

 

2)    These programs usually have robust reporting tools. As such, you gain access to valuable data that can be used to market better. You can also identify customers who are likely to defect through such data as time between visits, or decreased spending. Loyalty programs also help identify – and reward – those customers that are the most loyal. These customers are the most likely to refer friends and family, as well as to become brand advocates.

 

Innovative dealers that think outside-the-box usually trump the competition. Perhaps it’s worth taking a page out of one of the most successful retailers on the planet – Amazon. Consider holding loyalty events, or days similar to the one Amazon is employing. These events don’t have to be costly. It could be something as simple as “Free Member Car Wash Day,” or an additional savings day in service.  This could help to keep your loyalty members loyal AND drive in more members.

 

Amazon’s “Prime Day” sale is likely to be a success. Whether or not it trumps Black Friday in the eyes of consumers is yet to be seen. One thing it will probably accomplish, however, is to add a whole new group of consumers to their membership base, anxiously awaiting the next deal – and there is no business that wouldn’t want that.

Lauren Moses
Great Read Mike, And I don't know about you, but I am definitely one of the ones anxiously waiting for tomorrow. I just signed up for Prime this year and so far haven't really used a ton (though I did stream my first movie the other night and loved it!). You are definitely right, I think they are going to see an influx in membership especially from those that have been thinking of signing but haven't. $99 for a year is nothing if you order regularly even for just the stuff you normally purchase (i.e. Amazon Pantry). As for loyalty programs in dealerships, I can't think of a single one that I know of that does it in our area. I know this means that we are prime to actually start one. My question is how do you track the customers and their membership? Use of the CRM, punch cards, excel spread sheet even? I would love to see something on purchasing vehicles but with a regular customer only purchasing a new car on average ever 3-5 years that leaves alot of time for them to stray. It would almost have to work around service to keep them coming back more often. Oil changes seem like they would be a prime thing to use for a loyalty program since most families have more than one vehicle.

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