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Customer Experience Strategy: Lessons From Amazon Prime Day

Customer Experience Strategy: Lessons From Amazon Prime Day

Apply these customer experience strategy lessons from Amazon Prime Day and be ready for Black Friday.

Between Black Friday, Cyber Monday, and beyond, we’re quickly headed for some of the busiest shopping days of the year. Even during this time of change and uncertainty, 96% of consumers plan to purchase holiday gifts for family and spend an average of $997.79 — about $50 less than in 2019 — on presents and holiday-related items, like decorations and food, according to the National Retail Federation.

2 Customer Experience Strategy Lessons from Amazon Prime Day

Since its introduction in 2015, Amazon Prime Day has been a huge driver of sales. It’s so popular that competitors like Best Buy, Lowe’s, Macy’s, Target, and Walmart offer their own sales. 

Held in October, instead of the usual July due to the pandemic, this year’s event drove a 42% weekly lift in sales, only slightly off from recent years.

Here are the two biggest takeaways from Amazon Prime Day 2020 based on Sense360’s analysis of the credit and debit transactions of 5 million U.S. consumers and from a survey of nearly 1,000 consumers conducted in October 2020. 

#1: Deliver value to drive revenue and new business

By enticing customers with exclusive sales, Amazon saw a 35% increase in first-time Prime Day buyers. Many buyers purchased non-Amazon Prime Day deal items during the sale time frame, highlighting the opportunity brands have to draw shoppers in and encourage conversions across sale and non-sale items. 

#2: Build a subscriber base to drive revenue 

Amazon’s subscribers are a built-in audience for its annual sale. Nearly all (87%) Amazon Prime members are aware of Amazon Prime Day, and nearly one-third of Amazon Prime members made a purchase during the sale. Not only that, 65% of subscribers who shopped on Amazon Prime Day had done so in previous years as well. 

Researchers have found it costs 5X more to attract new customers than it does to hang onto existing ones, and that’s likely part of Amazon’s success. It’s able to leverage its owned channels to drive awareness of member specials, minimizing advertising costs. 

5 Customer Experience Strategy Tips for the Holiday Shopping Season

As we’ve seen with Amazon Prime Day 2020, it pays to invest in strategies that improve customer loyalty and experiences. Here’s our best advice for surprising and delighting shoppers this season from our Medallia Experts on Demand.

#3: Create a two-way communication stream to optimize customer experiences in real time

“Brands should double down on establishing a strong two-way communication stream with customers this holiday season, both to convey important changes and timely information, as well as to get a pulse for how customers are feeling about any changes. Mobile and SMS are key channels for facilitating communications at key moments of truth along the in-store or home delivery journeys. This shift toward a real time dialogue empowers customers to ‘flag’ when the experience feels clunky, giving retailers the chance to pivot and recover in next to real time. Don’t forget to check in with customers outside of one-off transactions to ask them how your brand’s stores are ‘taking care of them’ this holiday season, another important communication touchpoint.”

— Erica James, Medallia’s Global Head of Retail Practices

Medallia Experts on Demand

#4: Take the effort out of the customer experience, and see sales soar

“Bundling offers together for customers will help drive sales and require less effort for people shopping this season. Thinking about low-touch and fast transactions is key for anyone in retail, but especially the telco space where this has been a concern for customers. Challenge your teams to figure out ways to speed up transactions and limit contact.”

— Jason Pointelin, Director, Professional Services, Telco, Medallia, who recently joined after spending 22 years in a variety of senior roles at Sprint  

#5: Don’t take customer loyalty for granted (because it’s no longer a given)

“We’re in the middle of the ‘Great Loyalty Reset of 2020,’ a time that represents a huge opportunity to shuffle market share, one like we’ve never seen before. While most companies have rushed to extend loyalty status, companies should learn from customers who are experiencing them out of convenience for the first time and work to convert these new customers into loyal ones. On the flipside, companies must be more diligent than ever to retain previously regular customers who were in a rhythm with them and are now trying other brands.”  

— Geoff Ryskamp, Global Head of Hospitality, Travel and Leisure, Medallia, who has nearly two decades of experience in hospitality with companies like Pebblebrook Hotel Trust, Choice Hotels and PwC

#6: Actively listen to and engage associates through the holiday season to drive optimal results

“At this extremely busy time of year, it’s natural for employees to feel a range of emotions, including stress and burnout. That’s why it’s important to engage with your employees much more actively by continuously listening to them (via a pulse survey) and seek out and crowdsource their ideas on innovations. Listening continuously will help you keep issues and obstacles manageable during challenging times, increasing your chances of both employee and customer engagement and satisfaction. Crowdsourcing ideas from top performers both increases their engagement while helping companies problem-solve through agile innovation.”

— Russ Haswell, Vice President of Vertical Markets, Medallia

#7: Listen to, learn from, and optimize how you’re interacting with customers — during the holiday season, not after

“Be sure to ‘listen’ to new and newly strained channels to understand what customers are experiencing and create action workflows to act on this information during the holiday season — not after. Many customers will be shopping in different channels for the first time and may have different expectations from existing multichannel customers. Reporting on findings in January is  too late. It’s important to execute on listening, learning, acting, and optimizing in the moment, so you can make the changes necessary for new channels during the holidays this year. 

— Charles Beck, Director of Solutions Consulting, Retail, Restaurant and Grocery, Medallia

Set Your Business up for Success This Holiday Season

With nearly half of U.S. consumers switching brands and retailers this year due to poor experiences, now more than ever it’s up to brands to understand — and meet — customer expectations. 

Get our Holiday Shopping Guide packed with resources so you can prepare the best customer experience strategy for your shoppers this season.