After Netflix's tough year, it's not surprising to see a customer-experience analytics firm reveal that the OTT giant's customer-satisfaction score is dropping.
Foresee today released its annual Holiday E-Retail Satisfaction Index, finding that Netflix has dropped seven points, from 86 to 79, based on a 1-100 scale. In recent years, Netflix has battled it out with Amazon.com for the top spot in the study, but Amazon now stands all alone at the top. The Seattle-based retailer saw its score rise from 86 to 88.
The news comes at an especially bad time for Netflix when you consider that Amazon is now a significant, direct competitor for consumers' streaming-video and rental dollars. Netflix this year went through a public-relations nightmare when it raised the price of its DVD+streaming plan from $9.99 to $15.99 per month, then made an ill-advised move to separate the two businesses, a decision it quickly reversed.
Foresee says the decline in satisfaction rating means Netflix has gone from "satisfaction superstar" to merely average, matching the Index’s aggregate score of 79 (up one point from 78 in the 2010 holiday shopping season). Netflix saw scores drop in every single element of the website that ForeSee measures, including site content, site functionality, merchandise and prices.
“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 percent 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."
Since 2005, Foresee's average customer satisfaction score has increased from 74 to 79. A score of 80 has always been the standard for excellence.
