walkitout (walkitout) wrote,

Why Are Customers Loyal?

h/t Nate, over at The Digital Reader for a pointer to this article at DBW


In this, Jeremy Greenfield describes the results of a survey by Codex Group; essentially, the vast majority of ebook buyers buy from a single retailer (and Amazon/kindle dominates). Of the remaining small number, even they buy about a third of their ebooks from/for Amazon/kindle. If you are Amazon, this is lovely; if you are anyone else, it is a Tough Business.

From this, Greenfield concludes that Amazon and the other big retailers can just keep on keeping on, and the smaller operators will have to work very hard. Specifically, "their biggest foe in that fight is Amazon, which is the most successful ebook retailer when it comes to luring rivals’ customers — likely through price promotions, exclusive content and ubiquity."

There are So Many Things Wrong with this analysis.

(1) A competitor focused approach/analysis is rarely helpful in terms of satisfying customers. Don't focus on the competitor; focus on the customer.

(2) While there are exclusive ebooks, I haven't seen a lot of evidence that exclusive content is driving people to one retailer over another. I guess I don't really understand the ubiquity issue. And pricing is sufficiently close to not be a huge differential between vendors.

So what _is_ driving people towards one retailer over another?

Customer loyalty is only partly driven by price. Customer loyalty is mostly driven by a history of positive experiences with a business. The absolute quality of service is less important than the quality of service relative to expectations. And the easiest way to keep your customers coming back is to pay attention to what they ask for and deliver it.

Here are ways that Amazon has provided a higher quality of service when selling ebooks to me:

I can go back and reread a book I bought as an ebook, years later, even if I deleted it from my device and really sincerely believed I wasn't ever going to read it again.

Even if I lose or break my ereader, and never backed it up, I can read all my ebooks on a future ereader, without losing my place in whatever I am in the middle of.

I can read my books on other devices, like my computer or my phone.

I can buy new books or download books I already own but didn't put on the device, _while I am overseas_, even if I don't have local wifi.

I can buy the ebook version of a book I already bought in paper from Amazon, for a cheaper price.

None of these (with the exception of the last one, which is a very new addition to the Amazon/kindle universe feature set) has anything to do with price. But there's no way in hell I'm going to switch out of the Amazon universe, if it means losing these features. Some of the other book universes provide some of these features -- I don't think any other provides all of them. If Amazon never updated its universe of features, perhaps some other vendor(s) could "catch up" and then innovate their way ahead of Amazon -- which is why a successful retailer doesn't just keep on keeping on.

I recently bought a Chromebook, and was utterly shocked to realize how difficult it would be to replace the set of features offered by iMessage inside the Chrome universe. I didn't adopt Apple products because of iMessage (and I'm not actually that big a texter anyway); I adopted Apple products because I really _like_ the You Can't Do That But What You Can Do Will Be Easy aspect of Apple (and also the existence of Apple Stores and the ease of repair access they offer). However, the absence of a comprehensive texting solution was more than a little daunting.

Don't just believe me about what makes customers loyal. You can start reading about customer loyalty in the obvious place: http://en.wikipedia.org/wiki/Loyalty_business_model
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