Companies that managed to survive recent hardships should have learned that it is important to have satisfied customers. Many have made it their business to make sure their customers stick to them, but some have decided that focusing primarily and obviously on high price is much better. It’s the case of Netflix, for which customer satisfaction isn’t its strongest side.
ForeSee is a company that issues a report, twice a year, tracking customer satisfaction. For Netflix, the annual ‘Holiday E-Retail Satisfaction Index’ brought bitter news. According to ForeSee, Netflix holds the leader position when it comes to worst customer satisfaction.
The report shows that the company’s rating during this holiday season had plunged seven points, from 86 to 79, marking an 8 percent decline from last year. The decline got Netflix the worst position in a top, where Amazon and Apple came out as leaders with flying colors.
Larry Freed, chief executive offices of ForeSee, explained: “Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors”.
But, Netflix’ problems did not start this holiday season. It all began with the decision to spike its prices by 60 per cent, “splitting the baby into separate DVD and streaming services”. As stated by Freed, “customer satisfaction is predictive, which means that Netflix’ financial woes may be just beginning”.
As a result of the company’s recent changes in its business strategy, it lost around 800,000 subscribers in third quarter alone. Obviously, markets lost confidence Netflix shares are any good or secure, so its share price recorded a staggering drop from over $300 to about $70.
Perhaps, for Netflix this doesn’t mean much, seeing as the company still holds the leader position in the online streaming market. Plus, losing 800,000 might not seem a lot, when this company has about 24 million subscribers, but consumer satisfaction and market confidence are not be taken lightly.
The fact is that ForeSee’s report points out a huge discrepancy. Netflix and Amazon have always been close by in this company’s reports, apart by just 1 or 2 points, but now the distance between them is significant. Amazon scored 88 points on a 100 point scale and made a record scoring the highest score from any retailer in 14 consecutive studies.