4 Expert Tips to Build Customer Loyalty on Amazon

Q: Why are Amazon customers loyal?

Amazon has an excellent, loyal customer base due to its quality of products, fast delivery system, and hassle-free product return process.

Author: Emily Hunt, Market Research & eCommerce Specialist6 Min.Feb 12, 2021

Having the right insights into the customer journey and touchpoints within it is crucial. Below we’ll break down exactly what eCommerce customer loyalty is and give you tips to build better customer journeys on Amazon, the world’s largest eCommerce marketplace.

What is customer loyalty?

Customer loyalty is a customer’s willingness to repeatedly purchase from your brand because of goodwill accumulated through past experiences. It can be reflected by engagement, customer retention, or even how someone talks about you. It can also be measured by referrals, the number of reviews, social proof, or user-generated content.

Customer loyalty vs. brand loyalty

Customer loyalty is often confused with brand loyalty. However, customer loyalty relates to consumer spending power whereas brand loyalty is all about customer perception. Customer loyalty relies on transactional metrics like average order value (AOV) and customer lifetime value (CLTV). Whereas, factors like design, logos, and reputation influence brand loyalty.

Benefits of customer loyalty

Loyal customers spend 67% more on products and services than new customers. According to Harvard Business Review, increasing customer retention by 5% can grow profits by up to 95%. Even if the most loyal customers make up just 20% of your audience, they provide up to 80% of your revenue and drive down customer acquisition costs.

Since it’s five times easier to retain a customer than acquire a new one, if you focus on existing customers, they’ll continue buying from you, serve as a market for new products, and spend more over their lifetime.

Free Download: Amazon Customer Loyalty Benchmarks

How to create customer loyalty on Amazon

1. Implement Amazon loyalty programs

Loyalty and rewards programs provide perks to encourage repeat business. Amazon Prime membership, for instance, offers benefits like expedited service, delivery, and discounts. Before signing up, customers need to trust your business.

2. Build consumer trust with consistency

Trust in your brand generates repeat customers – 89% of those surveyed trust Amazon (so they’ll pay to be Amazon Prime members). Trust builds when you continuously exceed customer expectations and outperform your competitors on items like:

Pricing
Customer service
Seamless customer experience and ease of purchase (e.g. “Subscribe & Save” checkouts)
Fast and convenient returns (by including a return label)
Other items your target customer values

Since Amazon consistently excels in the areas above, it developed a loyal, engaged, trusting audience of prime customers (and non-members). You can leverage this dedicated community by selling (strategically) on its marketplace.

3. Get noticed by consumers who already trust Amazon

Competition within Amazon’s marketplace includes 2.4M third-party sellers and its private brands (e.g. Solimo and AmazonFresh) which push products down search results. Retailers aren’t only competing on price, but also search result positions. This requires a deliberate and calculated approach to get noticed, ensure purchases, and build a loyal customer base.

4. Deliver a consistently positive experience throughout the customer journey

Here are tactics to help you attract customers and deliver a consistently positive customer experience:

Customer journey: Pre-purchase

Competitive pricing: Many shoppers won’t consider purchasing a product if it’s not priced competitively. To ensure your product is competitively priced, benchmark it to similar products. If necessary, implement promotions, like lightning deals (discounts available for a limited period of time).

Top products, including price, per Amazon category via Retail Intelligence

Pro Tip: Through Retail Intelligence, you can view average price points and see where you stand.

Optimize product listings: This includes choosing a strong title (under 200 characters), using the best images, showing product variations, and optimizing for desktop and mobile shoppers. For details, read our tips on how to optimize your Amazon product listings.
Amazon SEO: Optimize all your product listings with rich descriptions and appropriate keywords signifying purchase intent. You can learn more from our Amazon SEO guide.
Consider promotion: If tips one through three give you little traction, consider promoting your product to rank higher in Amazon search results. Determine how many hits the first-place product receives to compute ROI.

% Clicks per position in Amazon search results via Retail Intelligence

Pro Tip: With Retail Intelligence, brands can determine the number of clicks per product position to see if advertising makes sense

Customer journey: Post-purchase

Deliver strong customer experience: A seamless buying experience wins repeat customers. For instance, if you lack resources to ensure on-time delivery, consider investing in fulfillment services, like Fulfillment By Amazon (FBA).
Customer engagement: Although Amazon does not provide access to customer emails, it offers an internal messaging system that you must monitor closely to communicate with customers. Also, leverage Facebook and Google Ads to capture email addresses before users enter amazon.com. For instance, send people to a landing page for your product, and ask them to give you their email in exchange for a small discount. Once they opt in, you can send feedback forms to gauge customer satisfaction and campaigns for future sales.
Encourage advocacy: The more reviews a product receives, the higher it appears in search results according to Amazon’s algorithms. Particularly if you are a new seller, do everything you can to make the customer happy – nearly 93% of buyers are more likely to buy a product if they read one or more trusted reviews. After customers make a purchase, be sure to use Amazon’s “request a review” button. Also, you can include a product insert card in your packaging with a “thank you” message which kindly asks the customer to leave a review. Include a scannable Dynamic QR code for more one-step ease.
Prioritize customer feedback: Set a daily reminder to reply to customer feedback – closely monitor your Amazon product reviews and engage accordingly. Thank the positive reviewers and respond to the negative ones. You may also flag false ones for removal by Amazon. Before going the review-removal route, reference Amazon’s clear guidelines.
Cross-promote with your own website: While you cannot link to your brand’s website in your Amazon product listing, you can link your website to Amazon. Most consumers already are Amazon shoppers. They trust Amazon, so showcase that you sell there. This may sound simple, but, recently I visited a site that listed brick-and-mortar stores that sell its products before the online channels.

Amazon Customer loyalty insights with Similarweb

Similarweb’s Retail Intelligence provides crucial data to help boost your brand’s customer loyalty on Amazon. Insights include:

New vs. returning customers: Dashboard to gauge the percentage of repeat customers across product categories.

Purchase frequency: Segment customers further into one-timers (1 transaction), loyalists (2-4 transactions), and fanatics (5 transactions).

Purchase frequency (unique customers and transactions), an indicator of Amazon customer loyalty via Retail Intelligence

Days since last purchase: Determine days since the last purchase for returning customers to help you decide the appropriate time to engage a customer again and predict revenue streams.

Days since the last Amazon purchase via Retail Intelligence

Want to uncover more loyalty insights?

Are you selling products on Amazon or interested in more eCommerce insights? Schedule a demo today to learn more about our Retail Intelligence, and how it can help you grow your business.