Amazon.com Inc is a multinational technology conglomerate located in Seattle United States. The corporation specializes in provision of online retail shopping services globally. ( Galloway, 2017) . Relationship marketing and customer loyalty focuses on a business ability to develop close contact with customers with an intent of cultivating meaningful and deeper relationships ( Putra & Putri, 2019) . The concept plays an instrumental role in improving customer experience in Amazon. Investing in relationship marketing gives customers a deep satisfaction upon shopping and receiving merchandise purchased via amazon online platform. The concept is important in building referrals from individuals who have previously received excellent treatment. Amazon brand acquires new customers from referrals leading to increased sales and improved revenue streams. The study utilizes a Fortune magazine news article to explore the implication of relationship marketing and brand loyalty on Amazon Corporation.
Relationship marketing and customer loyalty concepts are utilized in attracting, maintaining and enhancing customer relationships. Relationship marketing purposes to establish and solidify a business relationship with customers and other partners with an intent of meeting a business profit making objective. According to Putra and Putri (2019) the concept primary goal is creation of enduring relationships between an organization and its clients. Relationship marketing is actualized by a mutual symbiosis and promise fulfillment. Relationship marketing primary objective is to cultivate customer loyalty. According to Goel et al., (2020) customer loyalty is an ingrained commitment to rebuy preferred services or products from a company despite there being marketing efforts and situational influence potential to spark switching behavior. In Amazon, highly satisfied customers register subsequent purchases and recommend others to shop from the company leading to cultivation of customer loyalty. Amazon works on its customer relationship by pursing several marketing strategies intended to build customer loyalty. Amazon offers discounts on its online retail stores and free shipping which are strong motivators for repeat purchases.
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Amazon.com allows its customers to select their preferred subscription schedule ranging from 1, 2, 3 or 6 months. Amazon places its merchandise offers in the product description on the right near the cart button where it is impossible for a customer to miss when they intend to make a purchase. Relationship marketing has significantly improved Amazon Inc. profitability. Marketing research study by Steinhoffet al., (2019) indicated that retention of existing customers makes an organization’s dealings more profitable than acquiring new clientele. Through relationship marketing, Amazon participates in cross selling, a strategy that has exponentially increased overall sales volume and profit margins. A study by Goel et al., (2020) on the effect of customer loyalty to a business indicated that positive changes in customer attrition can drive an organization’s profit margins to a tune of 75%. The surge in profit stream in Amazon results from high customer referral rate, increased cross selling hinged on a robust clientele relationship marketing. Close relationship with customers has created a strong brand loyalty hinged on a lasting relationship between the firm and its customers.
The Fortune magazine article explores reasons behind the high ranking status of Amazon in brand intimacy which has made the company gain an edge over rival firms. According to the article, Amazon has a robust bond with its customer base in relation to other brands. Amazon customers are emotionally connected to the company. A cohort marketing study reported that thirty percent of Amazon clients asserted that they would continuously use Amazon’s offerings such as Amazon Prime. According to Boateng (2019) brand intimacy is a pivotal determinant of an organization’s financial performance. A report undertaken by Putra and Putri (2019) agreed with Boateng (2019) by emphasizing that outfits that have cultivated stronger connections earn higher income streams and profit margins than firms with weaker bonds. Amazon success is hinged on the deep connection with their customers which leads to realization of customer loyalty in return (Reisinger, 2020).
Relationship commitment-trust theory formulated by Morgan and Hunt is particularly relevant to Amazon’s case. The theory asserts that marketing relationship serves as the foundation of customer retention. The theory emphasizes trust and commitment which are fundamental factors that Amazon Inc invests to form strong bonds with customers. Instead of pursuing short term profits, Amazon focusses on following the tenets of relationship marketing to forge enduring bonds with its customers. The end result is increased customer trust in the business and cultivated mutual loyalty that helps Amazon and its customers fulfill their needs. A study by Goel et al., (2020) reported that customers develop loyalty to a business when an organization has developed trust, service commitment and efficiency in complaint handling as well as reliability in customer communication. Theoretically, the outcome of research conducted by the article provides evidence for the influence of efficient dispute handling, commitment, trust and communication on customer loyalty. Practical implications from the article is that organizations intending to build clientele loyalty ought to be trustworthy, provide convenience, exhibit service commitment and should communicate timely and accurately to their customers.
Effective relations marketing and resultant customer loyalty has led to significant improvement in Amazon’s sales, revenue stream, market share and overall profit margins. A financial report floated on 20 th January 2020 indicated that Amazon Inc sales had surged by 20.5% while direct product rose by 13.1% to a tune of $50 billion (Weise, 2020). Amazon’s digital commerce generated $280.52 billion in revenue, a milestone that has been linked to the robust customer relationship marketing adopted by the conglomerate. Amazon market share rose from 41% in 2018 to 45% in 2019 and is forecasted to rise to 47% and 50% in 2020 and 2021 respectively. A Digital Commerce Insights Survey reported that sampled customers rated Amazon as the most preferred company with the best client online shopping. Ease of check out and speed of delivery were key contributors to improved customer experience.
Conclusion
The study has demonstrated that an effective relationship marketing leads to significantly improved customer loyalty. Amazon has built a long term customer relationship courtesy of prompt dispute resolution, increased trust, improved communication and unwavering commitment. Customer loyalty driven by relationship marketing is an important element in guaranteeing stable profits and market competitiveness.
Reference
Boateng, S. L. (2019). Online relationship marketing and customer loyalty: a signaling theory perspective. International Journal of Bank Marketing .
Galloway, S. (2017). The four: the hidden DNA of Amazon, Apple, Facebook and Google . Random House.
Goel, P., Verma, P., Al Mutairi, Q., Bhardwaj, R., & Tyagi, S. (2020). Customer Experiences, Expectations and Satisfaction Level towards Services Provided by Amazon. International journal of Tourism and hospitality in Asia Pasific , 3 (1), 89-101.
Reisinger, D., (2020). Amazon is No. 1 in ‘brand intimacy,’ beating some big rivals, Fortune rankings, https://fortune.com/2020/02/12/amazon-brand-intimacy-apple-disney-ford/
Putra, I. W. J. A., & Putri, D. P. (2019). The Mediating Role of Relationship Marketing between Service Quality and Customer Loyalty. Journal of Relationship Marketing , 18 (3), 233-245.
Steinhoff, L., Arli, D., Weaven, S., & Kozlenkova, I. V. (2019). Online relationship marketing. Journal of the Academy of Marketing Science , 47 (3), 369-393.
Weise, K., (2020). Amazon Earnings: Impatient Shoppers Help Lift Sales 20 Percent; https://www.nytimes.com/2019/07/25/technology/amazon-earnings-just-how-impatient-are-shoppers.html
