New customers are good...but loyal customers are even better.

Devoted buyers become fantastic company advocates who can provide invaluable marketing benefits by talking up your product to their friends and family. Plus, they can boost your bottom line with their buying power.

Research has found that 56% of customers are likely to pay more for a product from a brand they are loyal to, even if they can find cheaper options.[1]

A subscription service can transform a prospective, infrequent, or one-time customer into a repeat, loyal customer who signs on for purchases over the long term. Customers enjoy the freedom and convenience of not needing to reorder, setting up a purchase schedule to ensure they always have your products on hand. And it’s not just good for the customer — the steady transactions of a subscription service are a bonus for business operations, providing predictable, recurring sales and revenue, especially in unpredictable times.

Evidence for the power of subscription services can be found in their booming popularity. Research cited by the Subscription Trade Association (SUBTA) shows that 27% of customers surveyed this year are using auto-replenishment services, up from 17% in 2020. Significantly, three-quarters of those who didn’t have subscription services said they were open to signing on for the right product at the right price.[2]

The new mindset among consumers

Along the same lines, research by subscription management experts Zuora Inc. describes a new era in which consumers are choosing “access over ownership” with subscriptions. In a 2019 report, Zuora said about one in four adults around the world had three or more subscriptions, compared with one in six people just five years earlier.

They note: "A combination of high upfront costs, the hassles of ongoing maintenance, and the frustration of technological obsolescence have resulted in product ownership losing the charm and status it once held in people’s lives…they increasingly favor outcomes and unique experiences — a ride, a place to stay, the latest handbag to accessorize with. Why buy and own something if there is an easier way to get the same or an even better outcome? In other words: Why own when you can subscribe to a service? This is the new mindset amongst consumers."

Subscription sign-ups are growing so much, in fact, that companies in the “Subscription Economy,” as Zuora calls it, have grown nearly six-fold in the nine years covered in its report.[3] But Zuoro CEO and co-founder Tien Tzuo warns that “it’s not enough to slap a low monthly price on a product and call it a service.”[4] Companies need to hold up their end of the deal with reliable services like recurring billing and effortless payment through Amazon Pay.

By enabling recurring payments through Amazon Pay, you can make it easy for hundreds of millions of Amazon customers to start a subscription, pay a recurring bill, or make a future purchase (for example, purchases of MP3 songs or games) on your site. Amazon Pay lets merchants automatically charge a payment method that is stored in their customers’ Amazon.com account for future purchases and payments.

Getting started with Amazon Pay recurring payments

If you’ve already added Pay to your site, or if you’re considering adding Pay, it’s easy to extend your integration to include subscription or recurring payments. Amazon Pay offers a flexible recurring charge permission based on your buyer’s consent that will meet all of your digital or physical fulfillment needs. And best of all you’ll still receive all the benefits of Amazon merchant and buyer fraud protections and A-to-Z guarantees just like with 1x payments.

To learn more about how your business can benefit, go to our Recurring Payments FAQ.

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[1] Yopto, “Survey: How Is COVID-19 Changing Consumer & eCommerce Trends?” March 2020. 2,000 consumers between the ages of 14 and 73. 34% of respondents live in the U.S., 34% in the U.K., and 33% in Canada. The respondents were evenly split between Gen Z (14-22), Millennials (23-38), Gen X (39-54), and Baby Boomers (55-74).

[2] Jabil, “Connected Packaging Perceptions and Attitudes: A Consumer Insights Survey,” July 2021. 1,124 U.S. consumers. The respondents made at least five online purchases of physical goods in the previous 12 months, own a smartphone, and are responsible for purchasing a significant portion of their household’s staple goods. 37% were Gen X (39-55), 30% Millennials (25-38), 22% Baby Boomers (older than 55), and 11% Gen Z (18-24).

[3] The Harris Poll, “New International Survey Reports on the End of Ownership and the Rise of Subscriptions,” October-November 2018. 13,459 adults in the U.S., U.K., Australia, China, France, Germany, Italy, Japan, the Netherlands, New Zealand, Singapore, and Spain.

[4] Tien Tzuo, Medium.com, “The Subscription Economy: A Business Transformation,” March 10, 2015.

 

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