Amazon has upped its focus on its successful Amazon Prime loyalty program, adding a $5 incentive for customers to refer new members.
With the Alibaba $25 billion initial public offering dominating recent e-commerce headlines, Amazon has moved to expand its Amazon Prime fast shipping club by offering existing customers a $5 incentive to refer consumers in their network.
Amazon Prime offers two-day shipping and other perks for members (based in North America), who sign up for US$99 per year. Though Amazon.com Inc is secretive about how many Prime members it has, industry estimates suggest it could be over 25 million. The Prime offer continues to become more compelling, with increased benefits added in recent years including access to streamed, ad-free music (over one million songs available) plus access to borrow 500,000+ ebooks, and special deals on Amazon products.
The new program is very straightforward – invite a friend to sign up for a 30-day free trial and receive a $5 Amazon credit once the friend has signed up and made a purchase. There is no cap on the amount of friends you can sign up.
It’s a vote of confidence from Amazon in this type of basic cash-incentivised referral program, the likes of which have helped many of the private shopping clubs grow their customer bases.
The added incentive may also be a sign that Amazon is already feeling the heat from Alibaba occupying the spotlight, moving to further build and shore up its US customer base and increase the value of its members. According to Scot Wingo, CEO of ChannelAdvisor, Amazon Prime members spend on average four times more than non-Prime Amazon customers.