Nudge Why We’re Irrationally Loyal to Amazon Prime
7 snips
Dec 8, 2025 
In this insightful conversation, Richard Shotton, a behavioral scientist and marketing author, delves into the quirks of consumer loyalty to Amazon Prime. He reveals how perceived 'free' shipping impacts spending habits and loyalty. Richard discusses the sunk-cost fallacy, explaining why past investments justify continued subscription use. He also highlights the pennies-a-day effect, which frames costs in a way that feels more manageable. Through fascinating studies, he shows how Amazon uses behavioral science tactics to enhance customer retention.
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Perceived Free Shipping Is Persuasive
- Prime's 'free shipping' feels free despite being paid for via the subscription fee.
- That perceived zero-cost delivery powerfully increases Prime's appeal and loyalty.
Sunk Costs Drive Irrational Choices
- People stick with higher-cost options to avoid feeling they've wasted money they've already spent.
- This sunk-cost tendency drives choices that are not financially rational.
Theatre Ticket Study Shows Sunk-Cost Behavior
- Hal Arkes offered theatre season tickets at different prices and tracked attendance over six months.
- Full-price buyers attended more shows, showing higher usage after larger payments.
