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downloadAmazon recently announced a $20 increase to the annual cost of its popular Prime 2-day shipping and streaming video offering. The online retail behemoth may have taken its customers’ loyalty a bit too much for granted, according to a new report.

Research firm Brand Keys just concluded a survey of more than 1,000 Amazon Prime members, which revealed that the price hike had dropped Amazon’s customer satisfaction rating by ten percent. Amazon no longer headlines the Keys customer satisfaction rating, a position it has held for 16 years running.

Dr. Robert Passikoff, president of Brand Keys, observed the following:

“Based on immediate Prime member reactions, [Amazon] may have underestimated the negative effects of the increase . . . Consumer expectations are always on the increase, and when it comes to online retail, they operate in a ‘what-have-you-done-for-me-recently?’ paradigm. Price increases weren’t what Prime Members were expecting.”

Passikoff thinks Amazon may have poorly predicted the sentiment customers would feel toward the increase:

“When a brand misses the mark when it comes to consumers’ expectations, ‘expectation’ quickly becomes ‘disenchantment,’ and based on these assessments. Prime members seem really disenchanted with the Amazon brand right now . . . Amazon should have expected that.”

Granted, this is just one report. But still, does Amazon have a PR problem on its hands similar to the one Netflix suffered in 2011 when it tried to significantly raise its prices?

[via Home Media Magazine]

8 Responses to “Did Amazon Underestimate Negative Response to Prime Price Increase?”

  1. Visitor [Join Now]
    Jamie [visitor]

    Yes

  2. Visitor [Join Now]
    Movieluvr [visitor]

    YES!!! Amazon’s selection is sadly lacking compared to Netflix!! and not worth the jump in price. If they are going to raise the prices they better get some newer and better content or I along with many others I would guess will be dropping it.

  3. Member [Join Now]

    At $79 annually, Prime is less than $6.50 a month. At $99 annually, it’s still less than Netflix, and “all” Netflix gives me is stuff to watch.

    Considering that Prime gives customers much more than just a video selection, I think it’s a steal.

    The one advantage Netflix has, strictly comparing prices, is that it can be paid monthly. Prime cannot. Aside from that, Prime can’t be paid for with amz gift codes, which counts against it, in my own personal opinion. If I could pay for Prime with gift codes, my Prime would never expire.

    And if one wanted to have both Prime and Netflix, that’d still be cheaper than any cable I’ve ever heard of.

    I do think it was a mistake to have this price hike so soon after they raised the free shipping threshold. The Prime price hike is exacerbating any dissatisfaction customers are already feeling over having to spend more to get their purchases shipped free.

    • Member [Join Now]
      segarolow [segarolow-2]

      Right now I have Netflix online. And two out in the mail.. The Warner Bros online deal. And RedBox.
      Amazon works out to $6.58.333 a month at $79.00 a year….
      I am going to drop RedBox I think I don’t watch it online that much..??
      I am going to keep my NetFlix online & two out in the mail. And the Warner Bros online deal. All kinds of old Movies & TV shows on it.
      I see Amazon did wake up and put CC closed Caption on things.. About time….
      But I also see they try to sell you some of the Online TV shows a Movies…
      Not Cool.. NetFlix and Warner Bros do not pull that bit.
      Red Box does it also…..
      I don’t really buy that much from Amazon… So $79.00 ??? Still thinking about this…..
      Just my Two Bits worth…

  4. Member [Join Now]
    signothefish

    Yeah but with so many retailers like Target, Staples, and Best Buy price matching to Amazon, and the fact that several states are charging tax on Amazon purchases, one has to wonder if Prime is really worth the money. Sure, you save gas, but if you’re already out, or can pick it up on your way home from work.

  5. Visitor [Join Now]
    Billg [visitor]

    I feel that if AMAZON wished to raise prices it should have offered one of three options to its customers;
    1) Amazon Prime for shipping only.
    2) Amazon Prime for viewing only.
    3) Amazon Prime for both at the current $99.
    I order a lot thru Amazon and view very little on the online side. I will have to seriously rethink the cost every year for my ordering and see if the added, along with the cost of tax per item will be acceptable. Probably will stick with it, but would have been nice to be rewarded for being a good customer with a “shipping only” price plan.

  6. Member [Join Now]
    bigjw2

    I have had Prime for years now and I get 20 times my $79 investment in a couple of moths. The movies suck, but the free shipping and return you can’t beat with a stick. If you look at it as $99 for the free shipping and the movies as just a bonus there is no question it ‘s well worth another $11 a month after all the years Amazon held their prices steady. Hell! I have and offer here from Newegg that wants $49 for just shipping (no thanks).