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Authors:
Anish Yousaf (Rajalakshmi School of Business); P Aravind (Rajalakshmi School of Business); Insha Amin (Baba Ghulam Shah Badshah University)
Published in:
2018
Revision date:
13-Feb-2018
Length:
17 pages
Data source:
Published sources
Abstract:
The concept of customer loyalty and retention are not new in marketing. Both have been given importance by marketers owing to their direct linkage with customer life time value and customer retention that has the potential to impact long term profits. Building a pool of loyal customers is not a piece of cake and requires firm related efforts. The concept of Wheel of Loyalty is an important strategic tool that can help marketing managers in this direction by giving a better understanding of how to build and retain a pool of loyal customers. The current case discussed the example of Amazon Prime as a brilliant and successful effort made to build a global pool of highly loyal and satisfied customers via the subscription model. Data suggests that the Amazon Prime customers are buying more (and frequently), spending more, and staying with Amazon, thus, increasing the revenue of the company. Such is the impact that without Amazon Prime, the company could have ended up with a loss of USD1.11 billion in 2015. However, with Amazon Prime, the company posted USD2.66 billion of total operating profits and covered its costs to a huge extent. Discussions related to how Amazon has strategically implemented the Amazon Prime subscription model has also been done in the case. A question is asked to the readers at the end regarding whether Amazon will be able to achieve the same results with Amazon Prime in India or not?
Learning objectives:
1. Students will be able to understand the concept of Wheel of Loyalty as an important component of Customer Relationship Marketing. 2. Students will be able to understand the important dynamics required to be analyzed before implementing an effective customer friendly strategy for long-term retention of customers. 3. Students will be able to understand about the effective implementation of loyalty building strategy by Amazon via Amazon Prime.
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