My name is Nick and I’m an Amazon Prime member. And I’ve been addicted to the service since I joined on November 28, 2012.
Back in March of 2014, I received an email from “The Amazon Prime Team,” with the following subject line – Amazon.com Customer: Upcoming Changes To Your Prime Membership. The letter stated that Amazon was implementing a $20 price hike for a one-year membership to Prime. The 25% increase – from $79 to $99 – was the first since the membership scheme was introduced in 2005.
That same email noted that fuel and transportation costs have grown significantly over the first nine years that the service has been offered, along with the number of items eligible for unlimited free Two-Day Shipping (from one million to over 20 million). Amazon has also added “unlimited access to over 40,000 movies and TV episodes with Prime Instant Video and a selection of over 500,000 books to borrow from the Kindle Owners’ Lending Library” in that time.
While I understand Amazon’s approach to position the price increase by promoting many years of steady pricing and value added over time, I think they missed an opportunity to package up my story and individual Prime habits.
Why didn’t they focus on the data – my data – that would have offered a much more compelling argument for me to understand the value of the service and gladly hand over $20 more per year?
A Prime Example
Amazon could have created a page within my account that provided me with key activities over the course of my history with the company, including:
- Number of orders per year.
- Number of times I was below their $35 free shipping threshold since joining Prime (and the amount I saved in shipping costs).
- Number of transit days saved when comparing the free standard shipping (5-8 business days) to Prime’s 2-day shipping.
- Hours of Prime Instant Video that I’ve consumed.
They could have also considered calling out the free standard shipping threshold required by a sampling of Amazon’s competitors in the United States:
- Best Buy – $35.00 (3-7 business days)
- Home Depot – $45.00 (4-6 business days)
- Walmart – $50.00 (5-6 business days)
- Old Navy – $50.00 (5-7 business days)
- Kohl’s – $75.00 (3-6 business days)
I took a quick look in my Amazon account and created a graph to visualize my use of Amazon before and after joining Prime. This quick exercise justified my use of the service. I’ve gladly renewed my membership at the $99 price point each year since that price hike back in 2014.
Could this approach backfire if the data doesn’t justify the membership for the customer? Sure, but that piece of the puzzle needs to be part of Amazon’s strategy.
Customers could then be encouraged to increase the use of their Prime service between now and their renewal date. The use of data can be just as compelling for entertainment and events organizations, clearly illustrating the value of a membership.