The Amazon Prime Directive

Moving away from the light....and into the darkness of night
Creative Commons License photo credit: mendhak

What did you learn from – and change in your business – after Amazon launched Amazon Prime?

If you aren’t aware, Amazon Prime is a membership-based service that provides access to Amazon video-on-demand and free Kindle books from the Kindle lending library – but more importantly, it upgrades all purchases to from regular ground shipping to free two-day shipping.

The question remains – what did you take away for your business from the launch and subsequent success of Prime? Did it provoke you to change anything about your business and how you work with customers?

Even if you don’t do retail, there are lessons to be learned from what Amazon is doing.

The Fresh Prime of Bel-Air

Plenty has been written about the success of Prime and what it’s done for customer loyalty.

One quote from the Small Business Trends piece (linked above) that might get your attention – a comment from a Morningstar analyst who researched Prime:

What we found is that, generally speaking, last year Prime members spent about twice as much as non Prime members. (emphasis mine) They spent about $1,200 dollars compared to $600 for non Prime members. What’s also interesting is that the average person shopping online last year spent approximately $1,000. What that says to us it that Prime members generate more incremental revenue per than non Prime shoppers. They are doing most of their online shopping on Amazon as opposed to going to other sites. Prime members generate more income.

Recently, Amazon took the service a step further with the introduction in Los Angeles of Amazon PrimeFresh, which expands upon their Seattle-based test program.

What can you take away from this and implement at your business? Do it for them. Deliver it for them. Automate it for them, as appropriate. All with more personal touch than Amazon can afford to do *in your community* and *in your market* with *your customers*. Yes, automation *can* result in more personal touch.

The key is the emphasis on your community, your market, your customers. I’m not suggesting that you try to clone Amazon.

Behavioral shifts

There’s much more to this than automation allowing you to buy produce via your web browser. Customer behavior is central to what Amazon does.

When Amazon saw that Prime members behaved differently, then they could work differently with them. Simply by buying a membership in Prime, a buyer is telling Amazon “I am going to buy more, more often.”

If your customers could send you a signal in advance like that, how would you use it to improve what you do for them? How do you care for your best customers? How do you encourage new customers to take advantage of what you offer like your best customers do? How do you make buying friction-free and easy?

Now reverse that. If you look at customers who buy more and more often from your business, what are you doing to take care of them? What if you did those things for more of your customers – would it turn some of them into Prime-like customers?

Amazon, WalMart, You

We’ve talked repeatedly about “When Wal-Mart comes to town“. Amazon’s taken WalMart’s game and made it more convenient and logistically efficient.

Take from them what makes sense for your business and implement it a step at a time, even if your implementation looks completely different. The lesson is doing what matters for your customers, rather than blindly cloning what Amazon or WalMart do.

For example, let’s say you sell high quality, organic meats that your area’s chain grocer doesn’t carry.

Do your customers forget to stop by your place? When they’re at the grocery, do they grab something there because it’s in front of them? That convenience can cost you a $25 sale. How many can you afford to lose each week?

While you probably can’t afford to provide same-day delivery like Amazon does in Los Angeles, you can serve your neighborhood or small town in a similarly convenient way. Maybe you deliver on Thursday evenings so people have their weekend meat supply for campouts and family gatherings in advance of their weekend grocery shopping. A part-time employee could deliver their pre-paid orders.

You don’t have to cover the whole state 24 hours a day, just your market area (or part of it) as convenient.

Make quality, local buying easy. That’s the local Prime Directive.