Amazon continues to expand the benefits of its Prime membership as an acquisition and customer retention tool. Prime has become a critical program for the company, now covering more than 60 percent of US Amazon shoppers, who spend almost twice as much annually as non-Prime members do.
In addition to the principal benefit of free two-day shipping, there’s a growing list of free content available to Prime members, including access to Amazon’s streaming video service. The newest (or emerging) Prime benefit appears to be access to some premium content within Alexa skills, according to a TechCrunch report.
The company is starting to allow developers to implement a freemium model as a way to monetize skills. Previously, it shut down a third-party advertising effort from VoiceLabs in the form of “sponsored messages.”
Premium content with access for Prime members will help developers make money, which is critical for the health of the ecosystem. It will also potentially help (at the margins) with Prime member acquisition/retention.
A recent survey from Lendedu argues that Prime member retention is solid, but perhaps not as high as we might have assumed. The company asked 1,000 current Prime members a number of questions about the service, including whether they intended to renew. Roughly three-quarters said yes.
However, about 28 percent questioned the value of Prime or were unsure whether it was worth it.
The survey also asked about Prime members’ price sensitivity. At current price levels ($99), about 77 percent said they would probably renew (there’s some inconsistency in the responses). At higher price levels, $150 and above, willingness to renew dropped dramatically.
Only 33 percent said they would renew at $150. Intent to renew dropped to 15 percent or below at higher price points. If this survey is representative of the larger Prime subscriber audience, it appears that Amazon has little room to raise prices.
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Author: Greg Sterling
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