HIGHLIGHTS
Why is Amazon rewarding an already loyal and profitable consumer base with expense perks? Read on to find out.

In the 22 years since Amazon shipped its very first book, it has evolved to become a key source for everything from laundry soap to streaming movies. Through Amazon Prime membership, consumers receive unlimited free two-day shipping, free movies and television shows, streaming music and multiple other benefits. Membership has grown increasingly popular, with significant membership gains in the past two years. 

And now that membership earns an added benefit — a credit card packed with perks, including 5-percent cash back on all Amazon purchases made with the card. 

Given that an estimated 50 percent of American households are Amazon Prime members, the potential customer base for this card is substantial. Amazon Prime members spend nearly twice as much each year at Amazon as other customers, which means they’re already a profitable segment for the online retailer. 
So why give an already-loyal customer base even more rewards that could eat away at profits? 

It’s because Amazon understands something many community financial institutions (FIs) are learning, as well: a profitable consumer segment needs constant care and feeding. Consumers need to feel their commitment to the brands they choose is important. Amazon has consistently upgraded its Prime offerings, regularly adding benefits like video streaming, digital music and downloadable e-books. The new credit card offering is one more way Amazon is telling its most profitable customer segment they are valued. 

Community FIs can do the same. By digging deep into consumer data, credit unions and community banks can determine which cardholders are most profitable, as well as those rewards that really matter to their existing base. The secret loyalty sauce won’t be the same for every segment or every FI, and that’s important. Taking the time to create a value proposition hyper-personalized to the right cardholders will be repaid in increased card use and continued long-term loyalty.