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Industry Research : Amazon Wins In Online Customer Service
ForeSee Results, a company that measures customer satisfaction, released the results of its Holiday E-Retail Satisfaction Index today, and Amazon’s score of 88 – the highest in the seven-year history of the index. Amazon has continued to improve its score since acquiring Zappos, a company known for its customer service, in 2009. Meanwhile, last year’s co-leader, Netflix, dropped seven points from its 2010 number to score 79. Netflix has historically performed well on the index, but notably struggled with customer satisfaction in 2011.
The ForeSee study analyzes the top 40 online retailers by sales volume, using a series of customer surveys collected between Thanksgiving and Christmas. This year, companies scored higher across the board than in 2010, tying 2009’s all-time high score of 79. The lowest performing company in the study is Overstock.com, with a score of 72. Gap was also classified by ForeSee as a "laggard," with a low score of 73. Unlike Netflix, Overstock and Gap have routinely struggled according to the index.
ForeSee’s report looks specifically at why Netflix has taken a hit this year. The company performed poorly on content, merchandise, functionality and price scores. Netflix’s price score dropped, reflecting customer unhappiness about Reid Hastings and Co’s decision to change the DVD and streaming price points in 2011. "Considering that most people who are visiting Netflix have already made the commitment of membership (and the prices associated with membership), the drop of 12% is alarming," writes Larry Freed, CEO of ForeSee and author of the report.
Such scores are not merely a measure of past e-retail performance. "Customer satisfaction is a proven predictor of critical future behaviors that have a direct impact on the bottom line," writes Freed. He predicts a drop in future brand commitment stemming from the company’s drop, and a drop in Netflix customers’ likelihood to recommend the service. Still, Netflix’s score is exactly average among the top 40 online retailers.
"A satisfied shopper is far more likely to purchase (online and offline), remain loyal, and engage in positive word-of-mouth recommendations than a dissatisfied shopper," writes Freed. If that is indeed the case, it could be happy times for Amazon and other customer service leaders. Netflix still has time to get back on track, but it better get moving soon, before subscribers stop being customers and leave dissatisfied.
Six online retailers saw a substantial pick-up in customer satisfaction during the 2011 holiday season. TigerDirect.com rebounded from a weak 2010 to go up points on the index. JC Penney improved in points (a good sign for the new leadership team?) and Dell bumped up points. VistaPrint, Home Depot, and Macy’s all registered point improvements.
Posted by Veronica C. Silva, news correspondent
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Published: Friday, December 23, 2011