Me and Amazon, We’ve Got a Good Thing Going

By ​Bruce Ernst

October 28, 2013

AmazonLast week, I bought a cool new messenger bag. I found it while I was shopping around on the manufacturer’s website, checking out 3D views of the bag and reading product descriptions. But after I fell in love with it, I went straight to Amazon and bought it.

Why? I don’t know these other people, but I've got a real relationship with Amazon. It’s a relationship that Amazon values and understands. It’s honest and real, and ultimately it helps me win—so that’s where my business goes.

Retailers think that they can win by buying affection. Many seem to believe that customers are only going to shop with them when they pay them—whether that’s by using coupons or discounts. And retailers also think that it’s the offer that’s going to keep customers coming back.

Guess what? Coupons don’t breed loyalty—they breed dependence. Do you call a relationship between a junkie and a drug dealer loyalty? Hell no. It’s dependence. That’s what coupons are. You’re paying customers to buy your stuff. We’ve taught customers that loyalty isn’t something to enter into a relationship for—rather, it’s for sale. Consumers have been hardened to think, “Hey, you want my business? What’s in it for me?” And retailers happily play along.

But this makes no sense. Why are retailers giving a 50% off coupon so they can get $10 from somebody, instead of working on having a never-ending annuity from a person who loves their brand? That’s what marketers should be focusing on—that’s the far more profitable goal.

Stop and think about the brands you love. Do you love them because they have amazing offers or bombard you with coupons? No way. You love them because they offer you something that a coupon never can—real, long-term value and relevance to your life.

My favorite brands are Apple, Amazon, and Southwest. And what ties them all together is that none of them tricked me into doing business with them. All of them do something for me beyond just the simple transaction. They’re fair, they’re honest, I know exactly what to expect from them and I have intrinsic trust in all three. We have real, two-way relationships.

Give it a thought. How often do you get coupons from Amazon? Probably rarely, if ever. But still, they’re one of the most beloved brands out there. Why? Because they have genuine relationships with their customers where they actually try to delight them in real and relevant ways. And it works. You know what they’re going to sell you and that they’re going to stand behind it. If you’re a Prime member, you even know you’re going to get it in two days (or less).

And Amazon didn’t have to buy loyalty with coupons. In fact, it’s been estimated that over 10 million customers actually pay Amazon $79 a year to be in that Prime relationship with them. You know why? Because they make promises and they keep them. And because they’re not doing the short-sighted discount junk that so many retailers are doing.

Same with Southwest. They don’t promise the fancy reclining bed-seat or gourmet meals. Southwest is simply like, “You know what? We’re going to give you a fair price and we’re going to more or less treat everybody kind of equal. You’re going to get a seat on the plane, you’re going to get to pick it out, and we’re going to treat you with respect.” And time after time, I win.

And then there’s Apple, the brand that’s never offered a coupon or promo code for any of its products. I'm a hugely loyal Apple fan. But I don’t buy Apple products because I got a great deal or I saw a clever TV commercial (actually, nothing has even come close to beating the cool versus nerdy guy commercials that aired years ago). It’s because we have a relationship. I like the way they do things and it makes sense in my life. And when they reach out to me, it’s not about a fleeting discount or offer—it’s about things that are relevant to me. It’s like, “We’ve got a great new laptop and here’s why it matters to you.”

With all three of these brands, we’ve built relationships where now, I trust them. And with all marketing, especially something like email, you’ve got to build trust. If your emails are just sliding coupons every week, or tricking customers into giving their email address, or any one of the number of things what we generally consider good acquisition marketing, it’s not going to work long term. You may get a conversion or two, but the customer’s loyalty is going to go to the next highest bidder (or coupon offerer). And is that really what you want? Because the reality is, once that quick high of a transaction is gone, your relationship with that customer is destined to a fast crash.

Bruce Ernst is the former vice president of product management at Monetate. He has more than 20 years of experience in applying strategic plans to immediate execution as well as communicating complex technology solutions in a simple and straightforward manner. Prior to joining Monetate, Bruce was head of Webstore Product Management at GSI Commerce (now part of eBay), a Monetate customer.

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