DailyTech - Netflix Falls Well Behind Amazon in Holiday Customer Satisfaction Report For First Time

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Internet Netflix Falls Well Behind Amazon in Holiday Customer Satisfaction Report For First Time
Tiffany Kaiser - December 28, 2011 10:01 AM

16 comment(s) - last by inperfectdarkn.. on Dec 29 at 10:09 AM

(Source: ForeSee)

Netflix, who was always tied with, ahead of, or gaining on Amazon by a point or two, fell way behind this year for the first time with a score of 79

After years of stiff competition over the holiday season, a new report shows that Netflix has finally slid well behind Amazon in the battle for overall customer satisfaction.

ForeSee, a Michigan-based international customer experience analytics firm, released an annual study that shows how the Internet's top e-tailers rank as far as holiday customer satisfaction goes. The report has been released every year since 2005.

From 2005 to 2010, Amazon and Netflix were usually only one or two points off from one another. Also, neither of them ever fell below an 80-point customer satisfaction score on a 100-point scale. Having a score of 80 or higher is "the standard for excellence." But 2011 is a whole different story.

This year's ForeSee study placed Amazon at its best score yet with 88 points, which is two points higher than holiday season 2010. In 2005, when the study first began, Amazon scored an 82.

Netflix, who was always tied with, ahead of, or gaining on Amazon by a point or two, fell way behind this year for the first time with a score of 79. Not only is Netflix nine points behind Amazon, but the video streaming/DVD rental company also fell below the excellence mark to just average for the first time. In 2005, Netflix scored an 84.

Netflix has had a rough year, starting in July 2011 when it decided to raise prices by 60 percent and divide its streaming and DVD plans. From there, the company continuously ticked off customers by limiting streams per account, creating a DVD spinoff company called Qwikster, then cancelling the Qwikster idea less than a month later.

Netflix's actions are now reflected in ForeSee's study, showing that its customer base won't put up with anymore of the company's shenanigans.

"Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors," said Larry Freed, president and CEO of ForeSee. "Raising prices by 60% and splitting the baby into separate DVD and streaming services totally undermines Netflix's cost and convenience advantages. Customer satisfaction is predictive, which means that Netflix's financial woes may be just beginning.

“Meanwhile, Amazon may have started as an online bookstore, but it now competes in almost every significant retail category and it is setting the bar very high for any company selling online. E-retailers have consistently upped their game since we first started measuring holiday satisfaction in 2005, but Amazon is still the 800-pound gorilla of retail, and it just keeps getting better. It’s tough for a smaller retailer to compete with this level of dedication to providing an excellent customer experience.”

In addition to Netflix and Amazon-related findings, the study pointed out that the average customer satisfaction score has increased from 74 in 2005 to 79 in 2011. Gap.com and Overstock.com account for the largest drops in customer satisfaction scores with 73 and 72 respectively (down from 78 and 76 in 2010), while TigerDirect.com and JC Penney account for the largest increases in customer satisfaction scores with 79 and 83 respectively (up from 73 and 78 in 2010).

The study also noted that American consumers were less sensitive to price during the 2011 holiday season compared to the 2010 holiday season.

Source: ForeSee

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Netflix, have you learned?

By TheSev on 12/28/2011 11:21:06 AM , Rating: 2

Sooner or later, Netflix will realize that the way they're doing things is not going to lend them top dog status. One can hope, at least.

RE: Netflix, have you learned?

By TheRequiem on 12/28/2011 11:39:11 AM , Rating: 1

I think this whole Netflix thing has been blown way out of proportion. Look, I'm all for the consumer and making companies pay for constantly raising prices. However, it never seams to have any affect over any of my utility companies and all the cable companies... which are outrageously expensive btw. However, Netflix decided to double it's cost so it could do what it really wanted to do (which was add new streaming content, which would've been great). While I disagree with the way they did it, because I'll admit it was a little weird, I really didn't give a damn because I paid $10+ a month anyways for blu-rays and Streaming. It was a whopping $6 difference, OMG!!! Now if the utility and cable companies do this, it pisses me off, but that's because they are already expensive at $180+ (stupid) for cable and internet and utilities, which are hundreds of dollars.

I mean come on... I have been TRYING to ditch TV all together for a Streaming solution and would gladly do so if I could find a good alternative. It appears everyone is making a way bigger deal about this then they should. I get it, too, that they didn't offer the greatest communication because the only reason I knew about it was because of the internet news. However, I think people sent a good message to Netflix, but it's time to get over this now. It's no reason to bring the damn company down for, but we've got to get people back on Streaming so we can kick the real enemies... communications and cable companies who control the price of the industry. Plus, I like the idea of watching what I want, when I want and how I want.

Parent

RE: Netflix, have you learned?

By ClownPuncher on 12/28/2011 12:57:16 PM , Rating: 2

The market disagrees with you. Whether or not your perception of the situation is correct, the consumer is going to decide their fate. In the vacuum, a new competitor will come out with a better service at a perceived better value.

Parent

RE: Netflix, have you learned?

By fredgiblet on 12/28/2011 1:51:24 PM , Rating: 2

quote:
I think this whole Netflix thing has been blown way out of proportion.

Q.
F.
T.

The inital price increase was poorly handled but still legit. Everything since then has been pointless drama.

Parent

RE: Netflix, have you learned?

By Reclaimer77 on 12/28/2011 2:37:45 PM , Rating: 1

They didn't even increase the cost when they added streaming. Do people even realize that the on-demand streaming service was added, for free, to peoples Netflix account? And that went on for like, what, 2 years?

So is that Netflix's hideous sin in the minds of the complainers? That they gave free streaming for like 2 years before finally charging for it. Man, that's just terrible.

Parent

RE: Netflix, have you learned?

By fredgiblet on 12/28/2011 3:02:25 PM , Rating: 2

The sin was a significant, unexplained price increase. Had the price increase been properly explained it probably would have gone much better. Of course eve nthen there would have been whining, but probably not nearly as much.

Parent

RE: Netflix, have you learned?

By Reclaimer77 on 12/28/2011 3:20:31 PM , Rating: 2

Price increases are a fact of life, and rarely are they "explained". When's the last time something got cheaper or stayed at the same cost year after year? It never happens.

Netflix still packs amazing value at a ridiculously competitive price. For those like me, who only used streaming anyway, there wasn't even a hike.

Parent

RE: Netflix, have you learned?

By fredgiblet on 12/28/2011 3:39:32 PM , Rating: 2

I'm not arguing, I'm just stating that that's the perception. Like I said the price hike for Netflix was legit as far as I'm concerned. But people love to whine even when they are going to get more in the long run.

Parent

RE: Netflix, have you learned?

By Schadenfroh on 12/28/2011 12:08:05 PM , Rating: 2

Where was the rage at RedBox when they too raised their prices?

Netflix has to make a profit for their investors, otherwise they become BlockBuster, file for bankruptcy and layoff employees.

The MPAA studios are constantly raising their fees and many companies want Netflix to fail because the studios would rather us all live in the past

Parent

RE: Netflix, have you learned?

By letmepicyou on 12/28/2011 12:36:51 PM , Rating: 5

As a former Blockbuster employee, I can tell you that the company died as a result of a business model that refused to acknowledge changes in technology or consumer demand. You can't charge $5 for a DVD rental. You can BUY movies for $5 @ wally world. We have a new local video store that just opened in the last 6 months, and they are doing swimmingly well. Free rentals from the kid's section (no requirement to rent anything else, you can just walk in and rent kid's movies for free), a large $1.00 and 2 for $1.00 rental section are what keeps the place busy.

Regardless of your moral stance on piracy (personally I think draconian measures taken against it, such as what the MPAA and RIAA engage in ENCOURAGES piracy out of sheer spite), it exists, it is ubiquitous, and it will not stop unless the net stops. The ONE and ONLY business model that will function in the realm of reality is one that addresses the fact you can own 50 movies for $12 bucks if you download and burn em, and as much music as you can stuff on your MP3 player. Threatening people with fines and prison has only served to illicit middle finger salutes from the populace, especially when people by and large view their government as being illegitimate in the first place.

When the punishment for rape is less than the punishment for downloading music and movies, the "BS detector" is the only sound people hear, drowning out anything else. It's hard if not impossible for our govt to take a moral stance on ANYTHING, given their track record of truthfulness and transparency, and when they do, they tend to not have a shred of credibility.

Parent

RE: Netflix, have you learned?

By inperfectdarkness on 12/29/2011 10:09:09 AM , Rating: 2

this deserves a 6. it's worth mentioning that petty-theft often brings stiffer punishments than embezzlement.

Parent

RE: Netflix, have you learned?

By Reclaimer77 on 12/28/2011 2:15:42 PM , Rating: 2

Amazon scored big this Christmas because of the Kindle and Kindle Fire. Hell I got a Kindle Fire for Christmas and love it, so yeah, I guess I would rank Amazon over Netflix too because of that.

Does that mean Netflix is a failure because they haven't made their own tablet? Nah.

Parent

RE: Netflix, have you learned?

By kattanna on 12/29/2011 9:56:45 AM , Rating: 2

i got the wife a fire and she loves it, in fact she was streaming a netflix movie on it last night LOL

Parent

On-demand

By -Nibs- on 12/28/2011 3:15:59 PM , Rating: 2

Since Netflix has so much trouble getting motion picture studios to sign deals allowing Netflix to stream video as part of their subscription service, if Netflix wants to keep up with Amazon, they need to continue with their current streaming program but also do what Amazon does and offer almost every movie as a pay on-demand. Netflix's streaming selection is too small. I find myself going to my Netflix account less and less, and going to Amazon streaming more and more because Amazon has 95% of whatever I search for available on-demand. It's more expensive to stream on Amazon, sure, but it's worth it to me and that is business Netflix is losing.

RE: On-demand

By bbomb on 12/28/2011 10:07:39 PM , Rating: 2

Amazon updates their offerings far less than Netflix does. Its so meager that I often end up watching movies at Netflix. Amazon only seems to have recently realized that the world has advaced out of the 1990's in their movie selections. I'd say they are even when it comes to tv shows though.

You have a pretty good point of allowing the option to purchase what they just streamed.

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I have been with them since the beginning & love the service...

By Hiawa23 on 12/28/2011 6:54:01 PM , Rating: 2

I must be one of the few NF subscribers who have been with them since the the beginning & still love the service. I have the 2 out DVD/Bluray at a time, & I simply love it. I had the streamin before they did the price split, so I canceled that end of it & just went with the 2 out plan. I rarely used the streamin feature as I generally watch new movies & shows, & any show available for streamin, I could just rent the physical copy. They get to me the next day & as soon as I dop em off at the post office the next one ships, so I am very happy with em. I understand others beef , I just don't have any with them..