Amazon (AMZN) Customer Loyalty Drops After Prime Price Hike

NEW YORK (TheStreet) -- Amazon (AMZN) saw its brand loyalty drop after the Amazon Prime price hike last week according to a new Brand Keys survey.

Shares of Amazon were gaining 0.7% to $376.45 Monday.

Brand Keys found that Amazon's customer loyalty rating dropped to 83% from 93% after the price hike which raised the price of Amazon Prime to $99 a year from $79 a year. Amazon held the top spot in customer loyalty since Brand Keys started tracking online retailers. Among Prime members, however, the company now ranks third behind eBay (EBAY) and Overstock.com (OSTK).

"Based on immediate Prime member reactions, they may have underestimated the negative effects of the increase," Brand Keys president Robert Passikoff said. "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."

Brand Keys surveyed 1,050 Amazon Prime members between March 14 and March 16 as part of the survey.

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TheStreet Ratings team rates AMAZON.COM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMAZON.COM INC (AMZN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."

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