Dear Jeffrey,

I recently had a WOW experience that completely coincides with your philosophy on customer loyalty versus satisfaction. Today, I received the following email from Amazon:

“Hello, We noticed that you experienced poor video playback while watching the following rental on Amazon Video On Demand: “The Hunger Games.” We’re sorry for the inconvenience and have issued you a refund for the following amount: $3.99. … This refund should be processed within the next 2 to 3 business days…”

This is amazing to me for a few reasons. Yes, I did notice that my movie was buffering more than usual and, yes, it was annoying. However, it was nothing more than a minor frustration. I didn’t complain. I didn’t complete a survey or give any feedback about this experience. Truthfully, until I received this email, I hadn’t given it a second thought.

When I got this email, it stopped me in my tracks. They noticed that this particular experience was below their normal standards. But what’s more important, they noticed without me telling them.

Would I have used them again even if they did not refund my money? Yes, often. So what’s the difference? I wouldn’t have referred them. I received this email today at 2:18 p.m. Since then, I have told all my co-workers I came in contact with, posted this on my Facebook wall, and now am writing you.

Amazon lost $4 today, but they gained a customer for life! It was so impressive, I had to share.

Brilliant, eh? Proactive, memorable service. Amazon is monitoring the quality of its streaming bandwidth and can identify quality issues. Then, it DOES SOMETHING ABOUT IT. No waste of time and money “survey,” no phony empty apology, just a good, old-fashioned admission of guilt and a proactive refund for poor performance.

My bet is Amazon has given thousands of these, and the same customer response has happened with every one of them. What a strategy! Let’s make sure the customer experience was great, or let’s give them a refund.

Simple. Powerful. Profitable. Give up $4 to earn thousands. I wonder who thought that one up? Certainly not its advertising agency.

Look at the elements of business and sales as a result of Amazon’s action, and customer reaction: a huge wow, several social postings, more social proof, an amazing testimonial, customer loyalty and pass-along value that cannot be measured on any ROI scale. Amazon’s actions breed return on proactive, memorable service – the WOW factor, social response, and customer word of mouth. It’s WAY beyond “priceless.” In the long term, it’s worth a fortune.

HERE’S YOUR LESSON: You can invest in some marketing program to reach new people – or you can invest in giving your existing customers the best service possible, and let THEM find new people for you.

PREDICTION: I’ll bet the investment in existing customer experience is one-tenth the cost of any marketing program.

Amazon has led the Internet all the way with vision and tenacity, quality and value. It provides ease of doing business: Buy with one click, suggestive buying and published reviews. Not just price, delivery.

And now add to that list: proactive WOW interaction. Amazon dominates because it differentiates. It dominates because it innovates. Amazon leaders don’t study the market; they create it.

Take this lesson to heart – and take it to your customers. If you come up with something creatively compelling, you can also take it to the bank!