Amazon Prime’s retention rates are just sick
How do you spell customer loyalty? If you’re someone who regularly shops online, then the answer is likely to be A-m-a-z-o-n-P-r-i-m-e.
According to an analysis of Amazon Prime memberships by Consumer Intelligence Research Partners (CIRP), 73 percent of people who take advantage of a free 30-day trial membership are likely to pay the $99 needed for an annual subscription.
Ninety-one percent of first year subscribers are likely to renew their memberships for a second year while 96 percent of those who have been part of Amazon Prime for two years are re-upping for a third year.
According to CIRP, Amazon had a slight drop-off in Prime renewal rates after it raised its annual membership to $99 from $79 in 2014. Fortunately for Amazon, renewal rates rebounded within 15 months.
“When it announced the price increase, Amazon enhanced the benefit mix with a larger library of streaming video, including more original programming, a selection of free e-books, online photo storage, and occasional Prime members-only products and pricing,” said Josh Lowitz, partner and co-founder of CIRP, in a statement. “This contributed to the improved retention rate for customers after the first year of membership.”
- Amazon Prime Members Stay Members – Consumer Intelligence Research Partners
- Amazon Prime members keep coming back for more, report finds. Lots more – CNET
DISCUSSION QUESTIONS: How do you explain the impressive renewal rates for the Amazon Prime program? What part will Prime play in Amazon’s future retailing success?