Psst… Amazon Prime Day is all about loyalty, not just good deals (though there are plenty of those)

Be honest, did you splurge during Amazon Prime Day last week? You’re not alone. Amazon raked in a whopping $14.2 billion over those two days, marking an 11% increase from last year. But the company’s manufactured retail holiday is about much more than helping you score a discounted set of headphones. Prime Day is Amazon's grand stage to reinforce its holistic approach to customer loyalty (I mean, it could just as easily be called Amazon Day…) – and there are crucial lessons about loyalty that business leaders can take away regardless of whether you have a loyalty program or not.

We aren’t here to debate whether Prime is a loyalty program, as that designation is meaningless. Prime members not only spend over 2x non-Prime members ($1,400 a year for Prime members compared to $600 by non-members), Prime has an eye-watering renewal rate of 97% for its annual members.

So, what’s Amazon’s secret? How do they convince consumers to effectively pay for a loyalty program? It’s not just about Prime Day or free shipping. Amazon knows what drives loyal behavior from its customers. They’ve pushed their benefits far beyond just the flagship free shipping. They've built an entire ecosystem – adding exclusive access to NBA games, discounts on services like DoorDash, deals when shopping at Whole Foods, and the integration of Alexa into your everyday life over time to build up their network of benefits. Amazon’s loyalty isn’t just about the products it sells; it’s about bringing the world beyond Amazon to you.

What Amazon does exceptionally well is focusing on customer growth and retention. They cater to the direct and ancillary needs of customers to ensure they stick around: creating a true value exchange.

Regardless of whether your business has a loyalty program or not, here is what you can learn from Amazon Prime: 

1. Crack your Loyalty Equation. The list of high-profile companies that have focused too much on acquisition and not enough on loyalty is long. It is great to be able to consistently bring more customers to your business but not unless you can avoid a leaky bucket around retention and loyalty. Acquiring customers typically costs 5x more than retaining existing customers so the financial incentive to understand loyalty is worth the effort.
2. Keep it Simple, Seriously: Have you ever struggled to understand all the benefits of a loyalty program?  Prime, as a paid subscription model, is among the simplest loyalty programs out there. There are no points to redeem (unless you’re a credit card holder) and no tiers to navigate – and that’s part of its power. The annual fee incentivizes subscribers to use Prime, and Amazon holds up its end of the bargain by constantly innovating to deepen engagement and reward its most loyal shoppers.
3. Amplify Your Reach: It’s not just smaller-scale companies that try to leverage partnerships to gain broader customer access. Marriott Bonvoy is the largest hotel program, and it is constantly making smart partnerships with companies like Starbucks and United Airlines to expand its reach. On the B2B side, American Express and Amazon Business have pushed beyond co-branded credit cards to offer value-added services like integrated expense management tools to drive loyalty with both companies.

Loyalty program or not, companies need to spend more time on their loyalty strategy. When done right, as Amazon has shown, loyalty can become a powerful force that drives engagement, advocacy, and growth. Don’t just ask, ‘What can we do to drive customers to our business?’ Ask, ‘How are we providing a service that keeps them coming back while championing our business?’

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