NO-BRAINER

Amazon Prime has a ridiculously high renewal rate

Once Amazon Prime gets its hooks into customers, it doesn’t let go. The longer people subscribe to the e-commerce company’s flagship membership program, the more likely they are to stick with it.

Ninety-six percent of those who have paid for a Prime subscription for two years renew for a third, according to data released today by Consumer Intelligence Research Partners, a Chicago-based investment research firm. That’s a moderate improvement from Amazon’s retention of first-year subscribers (91%) and significantly more than the share that signs up after 30-day trials (73%).

“Amazon continues to add lots of benefits to the Prime program and they aren’t trying to just be nice,” says Michael Levin, cofounder of CIRP.

In January, CIRP estimated that the number of Prime memberships in the US had jumped to 54 million, equivalent to about half of the nation’s households or one in five adults. Other estimates peg total Prime members at closer to 50 million worldwide. Amazon, which is historically cagey with its figures, has said it has “tens of millions of members” globally.

CIRP’s latest findings are based on the firm’s quarterly surveys of 2,108 shoppers in the US who have or had a Prime subscription. Prime members are thought to spend nearly twice as much per year on Amazon as other shoppers.

Amazon Prime costs $99 a year and includes free two-day shipping on many items, same-day shipping in 27 metro areas in the US, unlimited access to Amazon’s libraries of streaming music and video content, as well as a host of other benefits. Amazon CEO Jeff Bezos has described the service as a “one-of-a-kind, all-you-can-eat, physical-digital hybrid.”

In his 2016 letter to shareholders, Bezos wrote that Amazon aimed to make Prime “such a good value, you’d be irresponsible not to be a member.”

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