>Second, even if you do know 100% that you'd happily pay more, it suggests that you as one data point know more about how to price a service like Prime than the legions of pricing analysts and product managers employed at Amazon who are privy to years of customer behavior data.There's a reason Comcast and Verizon are constantly bitched about by consumers yet continue to lead their industries in customer volume. Individual consumers are fickle but really only care about immediate cost.
We understand things through the lenses of the tools we use to measure them. When you measure only "behavior data" (code for limited quantitative snapshots of transactions at specific prices), then you only see what happens through the lens of pricing and you talk about people as sources of demand who are price sensitive or not, etc. etc. -- but you never get to the why and all you might succeed in doing is hill-climbing optimizations, at best.
Instead, what if we figured out how to measure experiences (not touch points) and what if we took that ability to actually build demonstrably better experiences?
One small example in support -- look at the volume of reviews and the impact of Yelp -- if that's not the antithesis of consumers being price sensitive, I don't know what is. For better or worse (and ignoring astroturfing), Yelp demonstrates the power of consumer experiences (and an attempt at measuring them)
Trust me, the incumbent cable and telco providers are successful not because people are price sensitive but because the market is broken -- there's no competition, in large part due to regulated/legalized monopoly (or at best oligarchy) and they fight hard to keep it. If there were competition, there'd be a different picture...