Loyalty Strategy

Amazon Prime Continues to March Forward

Amazon Prime Continues to March Forward

A new research report from Feedvisor indicates that 85 percent of Amazon Prime members visit Amazon at least once a week. Perhaps more significant, the survey reports that nearly a third of Prime members (31 percent) are going to the site daily.  Prime is Amazon’s fee-based loyalty marketing initiative that rewards members with free shipping and a variety of other benefits in return for an annual fee of $99.

While 85 percent of those Prime members report visiting the site once a week or more, the non-Prime members going to Amazon at least once a week are reported at only 56%.  As the reported levels of visit frequency decline, the non-Prime audience reverses the trend and demonstrates higher incidence of behavior. At visitation levels of once per week, the two audiences are equal at 18% each.

Makes us wonder.  Are the Prime members inspired to visit more and hopefully shop more because of their investment in Prime?  Or, has Prime simply become the vehicle for those who were already best customers of Amazon to insure they stay engaged with the site?

Either way, Amazon wins.

Fee based loyalty programs go way back to the early days of the industry. They quickly became unpopular when everyone decided to listen to consumer research surveys and make the programs free.  If one brand in a category went free, everybody else followed like a herd of sheep.

But Prime proves that if the benefit package is significant to the membership they will pay for the privilege of being a member.  Not everyone will pay of course, but the best customers will do mental math and quickly calculate if the fee is justified given the value of the benefits.  Once the fee investment has been made, the member will be sure to get their money’s worth, potentially delivering some upside.  Whether or not the member would have exhibited this behavior without the fee is not the question.  The best customers are retained, the brand has them mentally locked-in and share of customer is maximized.

A full copy of the report is available from Feedvisor (registration required) and includes a variety of other stats, year-over-year trends and insights regarding the 90 million member strong Amazon Prime.

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