One of the most successful marketing programs in e-commerce history is Amazon Prime. The program, which boasted 90 million subscribers in 2017, is well-known for providing a bevy of premium services into one package, including free 2-day delivery, access to video and music streaming services, free e-books, and many other benefits.
It’s not just the number of subscribers that make Prime so successful. It’s the impact the program has had on Amazon’s revenue and conversion rates. For starters, Prime subscribers spend an average of $1,300 per year, compared to $700 for non-subscribers. Another study from website traffic measurement firm Millward Brown Digital measured the average conversion rate for the Top 500 Ecommerce merchants, as well as Amazon. Regular merchants had an average conversion rate of 3.32%. Amazon blows other merchants away, converting at 13% for non-Prime customers and an almost unheard of 74% for Prime customers.
How do they do this? Simply put: They put the customer first and work outward from there. For a mere $99/year, customers get an enormous value. In fact, it’s so valuable a program that it’s become central to Amazon’s business model; it’s become one of their key competitive advantages.
Is this possible in the B2B e-commerce industry? Probably not, at least not to the same extent. However, there are steps you can take to develop your own competitive advantage by promoting loyalty and repeat business through high-value solutions.
Step 1: Know your customers’ wants and needs
This might seem obvious to most marketers, but knowing what your customers want and need is as important, if not more, than knowing typical B2B marketing demographics like business size. Amazon clearly recognized that consumers wanted to receive their products faster, and developed a solution to provide that to them.
To uncover your clients’ wants and needs, you need to do something that often gets overlooked in B2B marketing: You need to talk to your customers directly. Ask them questions about their work lives; ask them what you can do to be better; give them regular surveys. If you don’t know what they want or need, how can you possibly create something like Prime for them?
Step 2: Identify market parity
What other e-commerce company offers such a rich program like Prime? There aren’t many that have survived, in either B2C or B2B. But if anyone were to start an e-commerce company today that’s similar to Amazon, they’d need to know that Prime is the base level of service expected by customers.
And that’s exactly what you need to figure out. You need to look at your competitors’ offerings, services, and policies in order to know what’s par for the course in your industry. That might be free shipping on certain order sizes or a strong 30-day return policy. Whatever it is, this is your baseline that you need to either meet or outperform.
Step 3: Identify and amplify your own strengths
One of the things that makes Prime possible is Amazon’s extensive network of fulfillment centers. Without them, they would never be able to guarantee 2-day delivery for most products for orders going anywhere in the U.S. Developing the Prime program leveraged that network, and made it even more central to Amazon’s success.
Once you identify what your customers want, you can find strengths in your organization that meet those wants. From there, you can create programs that amplify those strengths.
Step 4: Provide something that no one else does
As mentioned above, there aren’t many programs on the same level as Amazon Prime. It’s not entirely unique in e-commerce, but it’s so popular and so widespread that it might as well be.
B2B e-commerce marketers need to think similarly about what they can offer that no one else can. And don’t just say it’s provide exceptional customer service; everyone says that. Instead, you need to prove it through an exclusive, concrete offering.
One of my favorite examples of this is our client, Telstraight International. A globally trusted Cisco reseller, Telstraight partnered with Credit Key earlier this year to offer our innovative, instant credit payment option. As their CEO pointed out:
“Offering Credit Key as an alternative financing option for our customers helps us to deliver on our promise of exceptional customer service. Our customers are able to get real-time financing with better and more cost-effective terms than credit cards. This not only saves them money in the long run, it allows them to focus more on running their businesses and less on worrying about financing.”
In industry where the baseline is either trade credit (which is broken) or credit cards (which is often insufficient and expensive, Telstraight is to offer lines of credit during the checkout process. This is something that both no other competitors offer (yet) and that creates value for their customers. And in this sense, Telstraight has been able to find its inner Amazon Prime.
Need help finding your competitive advantage? Contact us to see how offering more flexible payment options can help you beat out the competition.