On Thursday, I wrote about a staggering statistic that explained why Amazon Prime is the best business idea, ever. My point was that Amazon's monthly subscription program is largely the reason that Amazon is the default option when it comes to shopping online.
As it turns out, I was wrong. I'm not even afraid to admit it.
Well, to be clear, I stand by the idea that the data shows Amazon Prime to be phenomenally successful, and that it's largely responsible for the fact Amazon is probably the most successful company on the internet. Where I was wrong is that the number I used reveals a much different truth that I had overlooked.
First, a brief recap. A survey last year showed that eight in 10 Amazon Prime members start their product searches on Amazon. Every time those customers decide to buy something online, they head to Amazon.com. For non-Prime members, the breakdown is about 50-50.
In the case of non-Prime members, Amazon and Google are split evenly as the default place to search for products online. The point I made is that Amazon Prime made Amazon the default option for 80 percent of its members. That's pretty incredible.
Except, there's an obvious question that I forgot to ask--what about the other two people? If eight out of 10 are starting at Amazon, that means that two people aren't. Despite paying $120 a year for a membership program, they're still starting their search elsewhere.
Two out of 10 doesn't seem like a lot, except there are some 150 million Prime members in the U.S. That means that 30 million of them start their search somewhere else. According to the same data, half of those customers are using Google.
That has to drive Jeff Bezos crazy.
Look, most people would be thrilled to get people to pay for an annual subscription that resulted in those same customers spending significantly more money with their business. That's exactly what happens, with Amazon Prime members spending more than twice the average nonmember.
But, for Jeff Bezos, the fact that there are some people who still choose to start their search elsewhere is the sort of thing that goes against the company's "Customer Obsession." Bezos famously wrote about Amazon's obsession with customers in his 1997 letter to shareholders. It has formed the basis of the company's decisions, and it's right there at the top of the company's leadership principles.
Plus, there's a reason Bezos has a reputation as hypercompetitive, and that he only plays to win. Of course, the fact that Bezos obsesses over details like this, and the customers they represent, might explain why the company he leads is worth $1.6 trillion, and he's the richest man in the world.