Prime Price Hike Hurts Amazon Brand Engagement

Amazon is the Brand Keys Customer Loyalty Engagement leader for online retail. However last week, the brand measurement firm reported that the company’s $20 price hike on its most loyal customers (Prime members) caused the Amazon brand to suffer a loss of engagement.

Amazon raised the cost of its innovative free shipping and loyalty program from $79 per year to $99.

In a Brand Keys survey conducted earlier this month (n=1,050 Prime members), the firm found some consumers were put off by the price increase: “the Amazon brand took a blow to its normally high overall brand engagement and loyalty evaluations. Assessments among Prime Members (versus the category Ideal @100 percent) were down 10 percent, from 93 percent to 83 percent.”

Brand Reputation’ and ‘Brand Value were two metrics in the survey that declined for Amazon. Brand Keys said in a public statement that Prime members were now “disenchanted with the Amazon brand” in the wake of the price increase.

Brand Keys contends that its metrics are predictive of future consumer behavior — implying that some people will use Amazon less than previously. We’ll have to see.

The company has few if any online rivals with comparable consumer trust or brand strength. That may be the calculated bet that Amazon has made.