Amazon Prime - Engagement & Retention

About Prime Membership on Amazon

Amazon Prime membership in India offers a wide range of benefits tailored to the Indian market, providing subscribers with convenience, entertainment, and savings, all in a single subscription. Here's a breakdown of what Amazon Prime membership entails in India:

1. Free and Fast Delivery: Members enjoy free and fast delivery on eligible items with no minimum order value across hundreds of cities in India. This benefit is particularly valuable in a country with diverse shopping needs and varying delivery infrastructures.
2. Exclusive Deals and Discounts: Subscribers gain access to exclusive deals, early access to sales events like Amazon Great Indian Festival, and special discounts on a wide range of products, including electronics, fashion, groceries, and more.
3. Prime Video: Amazon Prime Video offers a vast library of movies, TV shows, Amazon Originals, and regional content in languages such as Hindi, Tamil, Telugu, and others. Members can stream or download content to enjoy anytime, anywhere, on multiple devices.
4. Prime Music: Prime Music provides ad-free access to millions of songs in multiple languages, including Bollywood, regional Indian music, international hits, and curated playlists. Members can stream music online or download for offline listening.
5. Prime Reading: Subscribers have access to a rotating selection of eBooks, magazines, and comics at no additional cost through Prime Reading. This feature enhances the reading experience by offering a diverse range of content across genres and languages.
6. Prime Gaming: Formerly known as Twitch Prime, Prime Gaming offers free in-game content, exclusive discounts, and a selection of free PC games each month. Members can also enjoy ad-free viewing on Twitch, Amazon's live streaming platform.

🕵️‍♂️Understanding the Product

While Prime membership provides its members with a wide gamut of benefits as mentioned above, its core value proposition is centered around:

1. Convenience: In which it offers unparalleled convenience through free and fast delivery on eligible items, allowing members to receive their orders quickly and hassle-free. This convenience is especially valuable in today's fast-paced world, where consumers seek efficient and time-saving solutions for their shopping needs.
2. Savings: In which it provides members with access to exclusive deals, discounts, and savings across a wide range of products and services. Whether it's special offers during sales events like Amazon Great Indian Festival or discounts on groceries through Amazon Pantry, Prime members can enjoy significant savings on their purchases.

Members tend experience these core value with almost every interaction across Amazon, especially via consistent high standard of deliveries and prominent display of such benefits throughout their shopping experiences from product pages to checkout.

The natural frequency of the core product i.e Fast & Free Delivery varies for each user segment

1. Casual Users: Monthly
2. Core Users: Weekly
3. Power Users: Daily

The membership also provides access to other features ranging from content to streaming services. The natural frequency for each of them can be seen below based on the user research conducted.

Table 1

Deciding the best engagement framework

To identify the best engagement framework for Prime users, we conducted research to understand:

1. What are their content preferences?

Table 2

In the above graph, we could see that OTT (TV Shows & Movies) were the top preference, followed by music and educational/information content.

2. Where do they spend the most?

Table 3

In the above graph, we could see that the top 3 areas of spending were Online Shopping, Food & Drinks and Entertainment.

Table 1 reveals that the majority of Prime members primarily utilize the Delivery and Video features, while a significant portion does not engage with the Music and Reading (Kindle) features. However, Tables 2 and 3 (entertainment at 36%) demonstrate that users actively invest time and money in music streaming and education/information content, suggesting untapped potential to enhance engagement with new features within the membership benefits (refer table 4 below). This discrepancy highlights an opportunity to broaden feature engagement and diversify the value proposition of Prime membership. By introducing initiatives to promote and enrich the Music and Reading features, we can capitalize on user interest in these areas and further enhance the overall membership experience.

Table 4: Present feature engagement basis research

👥Segmentation

1 ) Usage Based Segementation: Casual/Core/Power User

• Casual User: Casual users have limited engagement with Prime features, mainly utilizing Delivery. They may be less inclined to explore or take full advantage of the additional benefits offered by Prime.
• Core User: Core users are moderately engaged with a mix of Prime features, primarily focusing on Delivery and Video. While they may occasionally use Music and Reading, their usage is less frequent compared to power users.
• Power User: These members are highly engaged with multiple Prime features, utilizing services like Delivery, Video, Music, and Reading (Kindle) extensively. They are likely to be frequent shoppers, avid consumers of digital content, and derive significant value from their Prime membership.

2) ICP/Persona Based

• Family-Focused: These members prioritize features like Delivery and Video for their convenience and entertainment value, often using shared accounts for streaming services.
• Tech Enthusiasts: Tech enthusiasts are likely to be early adopters of digital content services like Prime Video and Music, frequently exploring new releases and niche content. They may also be interested in Prime Gaming for access to exclusive in-game content.
• Bookworms: Members in this segment value the Reading (Kindle) feature highly, spending a significant amount of time exploring eBooks and magazines. While they may use other Prime features, their primary focus is on accessing a vast library of digital reading material.

3) Natural Frequency Based:

• Frequent Users: These members utilize Prime features on a daily or weekly basis, incorporating services like Delivery and Video into their routine activities. They may also engage with Music and Reading regularly, making the most of their membership benefits.
• Moderate Users: Moderate users interact with Prime features on a monthly or occasional basis, accessing services based on specific needs or preferences. While they value the convenience and entertainment offered by Prime, their usage frequency may vary.
• Infrequent Users: Infrequent users have sporadic engagement with Prime features, using services only when necessary or for special occasions. They may be less aware of the full range of benefits offered by Prime and may benefit from targeted promotions or incentives to increase usage.

4) Product/Features Used:

• Delivery Dominant: Members in this segment primarily value the fast and free delivery offered by Prime, using this feature extensively for their shopping needs. They may have limited engagement with other Prime services.
• Video Enthusiasts: Video enthusiasts prioritize Prime Video for its vast library of movies, TV shows, and exclusive content. They spend a significant amount of time streaming and may also explore related features like IMDb TV.
• Multi-Feature Users: Multi-feature users leverage a combination of Prime features, including Delivery, Video, Music, and Reading, based on their preferences and interests. They appreciate the versatility of Prime membership and enjoy exploring various benefits.

💍Engagement

🧲Product Hooks

1) Driving Casual user to Core users:

• Problem Statement: Casual users may not be fully aware of the breadth of benefits offered by Amazon Prime or may not have high intent of exploring them, leading to underutiliztion of the membership leading to perception of low value for money in the long run.
• Goal: Increase engagement among casual users to by incentivizing them to explore more Prime features and services
• Success Metrics:
• 1. Increase number of features used to a minimum of 2 per user
  2. Increase frequecy and time spent on Prime services
• Current Alternative: Casual users primarily use Prime membership for free & fast delivery only, overlooking other features.
• Solution: Introduce Prime Points for users to engage with Prime features and earn loyalty points, redeemable for exclusive rewards.
• • User Flow:
  • 
• Metrics to track
• • Numbers users participating the loyalty program
  • Avg points earned and redeemed per user
  • Delta in depth before and after enrolment in the loyalty program
• Ramp up milestones: The ramp of this program will be split in 3 broad phases
• • Phase 1: Test pilot with top cohort of casual users (i.e active frequency)
  • Phase 2: Roll to larger audience and track initial adoption rates
  • Phase 3: Monitor user feedback

2) Driving Core user to Power users:

• Problem Statement: Core users may be satisfied with their current level of usage but may not be fully aware of the additional benefits being utilised by power user.
• Goal: Elevate the experience for core users and drive them to become power users by offering exclusive access to premium features and benefits.
• Success Metrics:
• • Increase number of features used to a minimum of 3 per user
  • Increase frequecy and time spent on Prime services
• Current Alternative: Core users may regularly use key Prime features like delivery and video streaming but may not explore other premium offerings like Music or Kindle
• Solution: The Prime Power Play gamifies the exploration of advanced Prime features, motivating core users to expand their usage beyond Delivery & Video streaming and become power users
• • User Flow:
  • 
• Metrics to track
• • Numbers users participating the in the program
  • Completion of tutorials and challenges
  • Delta in depth before and after enrolment in the program
• Ramp up milestones:
• • Phase 1: Development and rollout of the Power Play features, including initial tutorials and challenges.
  • Phase 2: Launch of promotional campaigns and incentives to encourage core users to engage with the Power Play challenge.
  • Phase 3: Monitor user feedback and adoption

⚡Engagement Campaigns

Campaign 1: Feature exploration challenge

• User Segment: Casual User
• Goal: Increase awareness of Prime benefits & features
• Pitch: "Discover More with Prime! Join our Feature Exploration Challenge and unlock exciting rewards by exploring different Prime features like Prime Video, Music, Reading, and more"
• Offer: Exclusive rewards such as bonus Prime Points, extended membership duration on completing feature related task.
• Frequency & Timing: Monthly challenge with new tasks & rewards.
• Success Metrics:
• • Participation rate in challenge
  • Increase in feature interaction & time spent of Prime streaming services
  • Redemption rate of rewards

Campaign 2: VIP Access

• User Segment: Casual User
• Goal: Drive engagement & excitment among casual users
• Pitch: "Get Ready for VIP Treatment! Enter our sweepstakes for a chance to win VIP access to Prime benefits, including early sales access, exclusive deals, and personalized recommendations"
• Offer: Exclusive rewards such as bonus Prime Points, extended membership duration on completing feature related task.
• Frequency & Timing: Bi-annual events coinciding with major shopping event or Prime content releases.
• Success Metrics:
• • Participation rate in the event
  • Increase in user engagement during in the campaign period

Campaign 3: Discover more with Prime

• User Segment: Casual Users
• Goal: Increase awareness and exploration of additional Prime features beyond delivery among casual users.
• Pitch: "Unlock the full potential of your Prime membership! Dive into a world of unlimited music, captivating reads, exclusive deals, and more. Discover new favorites and make the most of your membership!"
• Offer: Personalized recommendations and curated content highlighting lesser-known Prime features, delivered via email, app notifications, and on-site banners.
• Frequency & Timing: Monthly campaign with staggered delivery throughout the month to maintain user engagement.
• Success Metrics:
• • CTR from campaign messages to the Prime Discovery Hub.
  • Increase in the percentage of casual users engaging with additional Prime features post-campaign.
  • Growth in the number of active sessions within the Prime Discovery Hub during the campaign period.

Campaign 4: Level up your Prime Experience

• User Segment: Casual Users
• Goal: Encourage core users to explore and utilize advanced Prime features through gamified engagement
• Pitch: "Ready to take your Prime membership to the next level? Embark on a journey of discovery with our Power Play! Unlock exclusive rewards, conquer challenges, and become a Prime power user!"
• Offer: In-app notifications, personalized emails, and social media posts promoting the Power Play, with exclusive rewards and badges for completing challenges.
• Frequency & Timing: Bi-weekly challenges and content updates, with ongoing reminders and progress updates throughout the month.
• Success Metrics:
• • Participation rate in Power Play challenges and activities
  • Completion rate of tutorial modules within the Power Play
  • Increase in the frequency of engagement with advanced Prime features post-campaign

Campaign 5: Prime Music Fest

• User Segment: Casual & Core Users
• Goal: Drive engagement & discovery of Prime Music among music enthusiats across user segments
• Pitch: "Get ready to rock with Prime Music Fest! Explore curated playlists, discover new artists, and jam out to live performances from your favorite bands. Let the music take you on a journey!"
• Offer: Virtual music festival featuring live-streamed performances, exclusive artist interviews, and themed playlists, accessible to Prime members via the Prime Music app
• Frequency & Timing: Bi-annual event held during peak music festival seasons
• Success Metrics:
• • Number of active users during the music festival event.
  • Engagement metrics such as time spent listening to music, playlist saves, and shares during the campaign period.
  • Increase in user-generated content and social media mentions related to Prime Music Fest.

🤝Retention

*Findings are based on a survey of 40 Prime Members in India, with only 4 attrited respondents. These results may not fully represent retention rates and are used solely for project hypotheses.

Understading current retention trends

1. Based on the survey of 40 Prime members we could see that 90% of users had an active subscription (refer table 5), with over 66% being subcribed for more than 3 year (refer table 6). This data suggests very high retention rate and is also supplement by external research articles suggesting retention rate upwards for 90% after 1st year.

Table 5: Prime membership status split

Table 6: Prime Membership tenure split

2. In the survey we also saw that retention was higher amongst the Family focused ICPs. This could possibly be due to the fact that membership benefits are being access by more than 1 user in the family leading better utilization in terms breadth, depth & frequency resulting in higher value for money perception

Table 7:

3. Free & Fast Delivery is being used by 100% of prime members suggesting that the core product is driving better retention, however this is also supplemented by Prime Video for the survey indicated 92% usage.

Table 8:

Defining churn reasons

Top reasons for User churn:

From the responses received in the survey, the primary cause for subscription cancellations is due to cost of the membership, and is predominant amongst user living with family and friends/flatemates. Additionally we also saw the issue of "limited usage" as a contributing factor leading to cancellations. Lastly we can also the absence of perceived benefits as one of the reasons for cancellation as well.

Table 9:

Table 10:

Voluntary vs Involuntary Churn reasons

Resurrection Campaigns

Campaign 1: Prime Value Booster

• Segment of User: Churned Due to Cost
• Pitch: "Unlock unbeatable value with our new Prime Value Booster! Get more bang for your buck with enhanced benefits, exclusive discounts, and personalized offers tailored just for you!"
• Offer: Special pricing incentives, such as discounted membership rates, extended free trial periods, or cashback rewards for reactivation.
• Frequency and Timing: Bi-annual campaign coinciding with seasonal promotions
• Success Metrics:
• • Conversion rate of reactivated users compared to total campaign outreach.
  • Increase in average customer lifetime value (LTV) among reactivated users.
  • Retention rate of reactivated users over a specified period.

Campaign 2: Prime Plus

• Segment of User: Churned Due to Lack of Benefits
• Pitch: "Upgrade to Prime Plus and unlock a world of exclusive perks and privileges! From premium content to personalized concierge services, experience the ultimate Prime membership like never before!"
• Offer: Enhanced benefits package, including access to premium content libraries, priority customer support, exclusive events, and personalized recommendations.
• Frequency and Timing: Quarterly campaign with staggered rollout to target users who churned within the past three months, ensuring timely re-engagement.
• Success Metrics:

• • Conversion rate of reactivated users to the Prime Plus tier.
  • Increase in average revenue per user (ARPU) among users upgrading to Prime Plus.
  • Net promoter score (NPS) improvement among reactivated users indicating satisfaction with the enhanced benefits.

Campaign 3: Prime Lite

• Segment of User: Churned Due to Limited Usage
• Pitch: "Discover the new Prime Lite - perfect for those who want more, for less! Enjoy all the essentials with streamlined benefits tailored to your usage, making Prime more accessible and affordable than ever before."
• Offer: A scaled-down subscription tier with essential features at a reduced price, catering to users with limited usage patterns.
• Frequency and Timing: Monthly campaign targeting users who churned due to limited usage, with personalized messaging based on their historical usage patterns.
• Success Metrics:

• • Conversion rate of reactivated users to the Prime Lite tier.
  • Increase in overall user engagement metrics, such as session duration and frequency of usage, among users transitioning to Prime Lite.
  • Reduction in churn rate among users who opt for the Prime Lite subscription tier.

Campaign 4: Prime Benefits Showcase

• Segment of User: Churned Due to Lack of Benefits
• Pitch: "Reignite your Prime experience with our Benefits Showcase! Explore all the amazing perks and features you may have missed, from exclusive content to member-only discounts. It's time to rediscover the value of Prime!"
• Offer: Personalized content recommendations, curated lists of exclusive deals, and free trials for premium services, highlighting the breadth and depth of Prime benefits.
• Frequency and Timing: Quarterly campaign coinciding with major content releases, seasonal promotions, or key shopping events, maximizing user engagement opportunities.
• Success Metrics:
• • Click-through rate (CTR) from campaign messages to the Benefits Showcase landing page.
  • Increase in user interactions with showcased benefits, such as content views, deal activations, and free trial sign-ups.
  • Percentage of reactivated users who re-engage with Prime features after interacting with the Benefits Showcase.

Campaign 5: Prime Usage Boost Challenge

• Segment of User: Churned Due to Limited Usage
• Pitch: "Challenge accepted? Join the Prime Usage Boost Challenge and see how much more you can get out of your Prime membership! Complete fun tasks, explore new features, and unlock exciting rewards along the way!"
• Offer: Gamified engagement experience with daily challenges, achievement badges, and exclusive rewards for active participation and usage.
• Frequency and Timing: Bi-weekly challenge cycles with ongoing reminders and progress updates, maintaining user interest and momentum throughout the campaign.
• Success Metrics:
• • Participation rate in challenge activities and completion of tasks.
  • Increase in average session duration and frequency of usage among participants.
  • Percentage of reactivated users who continue to engage with Prime features post-challenge.