Everyone likes to be rewarded. After all, how many things we do in life aren’t motivated by the possibility of a reward? When someone works out, they’re rewarded with increased fitness. When people show up at work, they’re rewarded with a paycheck. And when kids cash in 10,000 tickets at Chuck E. Cheese, they’re rewarded with a bouncy ball and a plastic boomerang. (Hey, we didn’t say the reward was always proportional to the work).
Since your customers are people, there’s a 100 percent chance they like to be rewarded, too. Which is why a service like Amazon Moments can be incredibly useful to your brand.
Amazon Moments allows brands to increase engagement and improve customer loyalty by rewarding users for performing desired actions. It provides an easy way to automate reward fulfillment via the Amazon marketplace. While the service offers a lot of benefits, brands need to be aware of the requirements and restrictions before starting an Amazon Moments campaign.
In this article, we’ll walk you through how an Amazon Moments campaign works, what you can use it for, how you should determine prices, and what rewards you can offer. We’ll cover what you need to know to make an informed decision about using Amazon Moments for your brand.
How does an Amazon Moments campaign work?
An Amazon Moments campaign plays out in five stages:
- You determine a “Moment”—the action a customer performs in order to earn rewards, such as referring a friend or purchasing a specific item.
- You set the cost-per-action (CPA) and your spending limit for the campaign, often based on your customer lifetime value (LTV).
- You select the rewards a customer can earn for completing Moments, such as Amazon Credits or a free product.
- Customers complete the Moments you’ve determined.
- Amazon fulfills the customer’s rewards.
What can you use Amazon Moments for?
A “Moment” is what Amazon calls the action you select for users to perform. Encouraging users to complete these Moments is the purpose of any Amazon Moments campaign you might run.
Moments can be pretty much anything that you’re able to track in an app or on a website. What action you determine to be a Moment will depend on what business goal you intend to accomplish with your campaign.
You can use your Amazon Moments campaign to increase customer engagement, re-engage lapsed customers, gain new customers via referrals, encourage upgrades or conversions, and much more.
For example, if you’re launching a new app (or trying to gain more users on an existing app) you could create a Moment for downloading the app. Any user that downloads the app via your Amazon Moments campaign would then be rewarded for doing so.
Consider the case study of World of Warships. In order to increase referrals for their free-to-play online game, they launched an Amazon Moments campaign. Qualifying players who referred a new “recruit” were rewarded between $10 and $20 worth of Amazon Credits, depending on their referral tier. All told, the campaign doubled referrals, caused a 20 percent increase in conversions from free players to payers, decreased costs per action by 42 percent, and resulted in a 38 percent increase in average revenue per user.
The Moment you select doesn’t have to be free for customers to complete. You can even select buying an item from your ecommerce store as a Moment, incentivizing purchases with an extra gift.
Amazon provides a Moments console which you’ll use to set up each campaign. There you’ll select where, when, and how users can complete Moments to earn rewards. It also allows you to target your campaign to specific user segments, such as new users, current users, and lapsed users.
A few other options you could select for a Moment, depending on what you’re trying to accomplish, would include opening an app, providing contact info, watching a video, using a feature, or signing up for a subscription. But this is hardly an exhaustive list. There’s plenty of room for bringing new, creative ideas to the table.
How should you determine prices?
Amazon Moments operates on a cost-per-action (CPA) model. This means you pay for every Moment a user completes. You get to determine how much you’re willing to pay per Moment completed. This in turn determines how expensive of a reward you’re able to offer customers for completing Moments.
You can set the CPA for your campaign as low as $3. However, you have to keep taxes and shipping in mind. Customers must have an Amazon account in order to redeem awards. Amazon Prime members will get free shipping, but customers on a free Amazon account will not.
Ideally, your CPA should be high enough to cover taxes and shipping for your customers’ rewards regardless of whether they’re an Amazon Prime member. Otherwise, they’ll be left to foot part of the bill themselves after earning their supposedly “free” reward, and they may feel cheated.
Amazon suggests setting a CPA that is lower than the LTV of the customer segment. You don’t want to pay more to acquire customers than the total value those customers typically provide to your brand. Amazon additionally offers specific CPA recommendations for certain goals:
- 25 percent of the LTV for driving payer conversion
- $10 or greater for driving engagement
- $3 to $5 for driving new installs
When creating an Amazon Moments campaign, you’ll also set the total spending limit or the budget that you have for the campaign. Amazon caps the highest total spending limit at $5,000 per month for a single campaign and at $15,000 per month for all campaigns within a single Amazon Moments account.
What rewards can you offer?
You can offer customers rewards from Amazon Moments in the form of physical products sold and fulfilled by Amazon or Amazon Credits toward a category of curated products. You may select up to five products and/or one category for your campaign, allowing customers to choose from them for their reward.
In the case of physical products, you may select anything that Amazon offers, but it does have to be sold and fulfilled by Amazon itself. In other words, products sold on the Amazon marketplace by other sellers do not qualify.
You may or may not be able to offer your own products as rewards. If your products on Amazon are sold and fulfilled by Amazon, then you can select them as rewards for your customers. But just as with any other products, they won’t qualify if they’re sold by other sellers (including yourself). And if you do select your own products, sold and fulfilled by Amazon, as your rewards, you should be aware that it won’t qualify you for a discounted CPA.
In the case of Amazon Credits, these will apply toward the category of your choice of curated products on Amazon. It’s kind of like an Amazon gift card, except that it only applies to items within the curated list. Depending on the CPA you choose, offering Amazon Credits may enable customers to get a free item from the curated list, or it may only give them a discount.
Amazon claims campaigns tend to perform better when offering free items versus offering discounts on items.
Beyond physical products and Amazon Credits, a third option for rewards does exist, but it’s currently only available as a beta program for Amazon Moments. Brands that gain access to the beta program may offer Merch on Demand via Amazon as rewards for their Moments campaigns. If you’re interested, you have to contact Amazon support via the Contact Us link found at the bottom of the Moments Console.
Whichever rewards you offer, they expire only 30 days after the end of your Amazon Moments campaign. Also, since Amazon Moments operates on a CPA model, you have to pay for the rewards regardless of whether customers actually redeem them. If a chosen reward is out of stock at the time a customer seeks to redeem it, Amazon will replace that item with another reward of equal value.
How your brand can succeed on Amazon
If you’re considering running a campaign with Amazon Moments, you may also be interested in selling your products on Amazon. Or, if you’ve already listed your products on their site, there’s always room for optimization.
We’ve put together an ebook for brands to help you get the most out of selling on Amazon. In How Brands Win on Amazon, we show you the top factors that affect how well your products perform on the world’s largest marketplace. You’ll learn best practices for:
- Organizing your content on Amazon
- Promoting and marketing your products
- Leveraging Digital Shelf Analytics