Amazon Prime retention rate hits 96%

Amazon (NASDAQ:AMZN) is improving retention rates for members of its Prime loyalty program, with more than 90 percent remaining members after their first year.

Retention had dipped somewhat following Amazon's increase of membership fees from $79 to $99 in March 2014 but has since recovered, according to a new report by Consumer Intelligence Research Partners (CIRP).

CIRP found that after a subscriber's 30-day free trial expires, 73 percent become paid members. But retention after that jumps considerably, with 91 percent of Prime members renewing for a second year and 96 percent of those subscribing for a third year.

"With Amazon Prime, Amazon confronts two or possibly three critical moments in retaining members," CIRP co-founder Josh Lowitz said in a press release. "It needs to persuade 30-day free trials to pay $99 for a full-year membership, and then persuade first-year paid members to renew for a second year. It also needs to persuade second-year members to continue a membership, ideally to continue year after year."

"Once Amazon Prime members renew for a second year, Amazon appears to have attracted them for the long haul," Lowitz said. "After a second year, renewal rates are over 95 percent, and have improved gradually in the past two years."

Prime is now available on a month-to-month basis, although the option became available after the CIRP survey, pointed out the Motley Fool's Daniel Kline.

Amazon continues to add services and products, including Dash buttons and the Amazon Echo, an artificial intelligence product that works with Prime to automatically order products from Amazon.

For more:
- see this Motley Fool article
- see this CIRP press release

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