Netflix Customer Satisfaction Tanked In 2011, ForSee Survey Finds

By Alistair Barr

(Reuters) - Netflix Inc and Gap Inc were among the worst performers in customer satisfaction among the largest online retailers this holiday season, according to a survey released on Wednesday.

Overstock.com Inc came last out of the 40 largest online retailers, with a rating of 72 out of 100, down 4 points from last year, the survey by ForSee found.

Gap.com, Gap's main website, was second last with 73 points, down 5 from a year ago. Other laggards included buy.com and websites run by Sony and Toys R Us, ForSee said.

Customer satisfaction is important for retailers because it can lead to higher sales, more loyalty and increased word-of-mouth recommendations, ForSee said.

Netflix saw the biggest decline in customer satisfaction in ForSee's most-recent survey after the company tried to raise prices and split its DVD and video-streaming services. The plan was scrapped after customers defected.

"Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors," said Larry Freed, chief executive officer of ForSee.

Netflix shares lost more than half their value this year, with most of the damage coming after the company unveiled its intention to split its services.

Netflix had come close to customer-satisfaction leader Amazon.com in previous ForSee surveys. But in the latest poll, Netflix dropped 7 points to 79, the largest decline of any retailer in the survey.

Amazon climbed 2 points to 88 to lead ForSee's survey for the 14th consecutive time. ForSee runs the poll about every six months.

The biggest gainer was TigerDirect.com, a tech gadget and parts website owned by Systemax Inc, which climbed 6 points to 79.

Another big gainer was JCP.com, J.C. Penney's website, which rose 5 points to 83. That put the retailer in a tie for third place with QVC.com, Apple's online store and VistaPrint.com.

(Reporting by Alistair Barr; Editing by Tim Dobbyn)

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Comments

[shakedog]

03:40 PM on 01/01/2012

The price hike was unjustified. Let's face it, a corporation doesn't need to care about its customers, but they certainly have a stake in having the outward appearance that they do. Their decision was unpopular and people responded negatively. I don't like being gouged any more than the next guy, but to get all emotional and take it personally is a waste of time and energy. Good customer service goes a long way for me and I support companies who understand that.

Aside from the rate hike, my only beef with Netflix is that the search function sucks big time. I would appreciate more in-depth sorting capabilities. Also, they need to get their act together and fix an issue with the PS3 app where each row of titles scrolls erratically when trying to select a title. The update prior to the last one solved the issue, but it has returned again with their latest update.

[Soft Robot]

04:08 PM on 12/30/2011

And since the USPS is circling the drain, getting DVDs in the mail is going to be a non-op soon.

[loki]

11:28 PM on 01/01/2012

good point. So those who want to see movies that netflix wont put on the web, will be screwed.

[strangetimes]

06:42 PM on 01/02/2012

Agreed, Netflix would be great if their on-line steaming selection didn't suck.

[amorosotom]

09:18 AM on 12/30/2011

I've been using Netflix for close to 4 years now. Never a problem in all those years. Order a DVD and it arrives in the mail. Mail it back and get another. I pay about 9 bucks a month and it's a great service. Why the hell don't people rail against HughesNet instead?

[Bobbie-The-Jean]

09:12 PM on 12/29/2011

I'd go with NF if their streaming selection didn't suck utterly.

[loki]

11:31 PM on 01/01/2012

have you noticed that not only do they not have new movies lately, they just rotate old stock and call it new, but they are also losing a lot of the old stock. All the Bond movies are leaving Jan 8th, along with a lot of other movies. I think even the studios are pulling out of Netflix, and thats going to be the death of them. They cant just keep filling up with low budget 1st year film school films or foreign films. And I love foreign films, but not everyone will read subtitles like I will.

[Urfubar12]

04:00 PM on 12/29/2011

Compared to cable....Netflix is a freakin steal. Cable companies make you bend over and take it up the tail pipe then ask you to pay them for it.

[Berkut98]

02:40 PM on 12/29/2011

Netflix made a mistake, whatever it happens. At least they owned the mistake and tried to rectify the issue. However, I applaud the quality of thier streaming video service. I have had it for a few years since the Roku Box came out and it is light years ahead of what it was just a few short years ago. However, the selection is at best mediocre. Why would i care to watch an 80's action flick I have seen 4000 times since I was 13 ? Their selection of more up to date and new releases is pathetic and at best laughable. I would be happy to move to steaming only if they offered a greater selection of recent and popular releases. I understand it has more to do with the fees for streaming vs DVD from the studios/distributors but it makes no sense to me.

[Schmedly328]

02:26 PM on 12/29/2011

I am so disgusted with Netflix. Not just that the price went up the and services divvied, but the lack of a SAVE feature for streaming is a pain in the tuchus. Having a file right there to put new movies in was great. Before they screwed everything up, I couldnt believe what a swell thing Netflix was.

[Ryan Elyse Cameron]

02:14 PM on 12/29/2011

I joined Netflix because my budget allowed me to pay $8.00 a month. After a few months, I realized
that I was being charged $17.00+ a month----with no explanations. I immediately cancelled my
membership. I will never subscribe to it again, nor will I recommend it to ANYONE. They can make all the "mistakes" they want, but not on my dime !!!!!!!! Ryan Elyse Cameron

[Lucille]

11:48 AM on 12/29/2011

Some people are being too hard on Netflix, they messed up, it happens but they are trying to do better and they are still a great value for the buck and convenient too.

I enjoy Netflix very much and almost every day I watch something from Netflix and I read they are going to put even more of their DVD collection in the streaming system which is something else to look forward to.

[Chastity Pine]

09:37 AM on 12/29/2011

I wonder how many people that complain about Netflix are still Netflix customers.

[Bobbie-The-Jean]

09:13 PM on 12/29/2011

Not me and not several others I know of.

[VirgoLinnea]

04:36 PM on 12/31/2011

I used to be a Netflix customer until the month before the prices switched. Not anymore. And my local library, local cafe with a huge DVD selection (you can borrow them for free), and Red Box have been better choices when put together.

[Chastity Pine]

01:57 PM on 01/01/2012

I've never tried Red Box. I still use Netflix. I really haven't had a bad experience with Netflix.

[arex91]

04:13 AM on 12/29/2011

I was a perfectly happy Netflix customer before the announced price hike. Now I'm still waiting for a true mea culpa in the form of a small discount for people who subscribe to both streaming and disc service.

Until then, I'm happy to pay Blockbuster/Dish $10/month for their disc service (which includes game rentals) and will forego Netflix streaming until I see the apology I'm looking for, or the enhanced service/streaming content that the price increase was supposed to pay for.

[zagatosz]

12:15 AM on 12/29/2011

While I think that Netflix is an ok deal but any company that raises prices on a service by 60% and tries to pass it off as doing customers a favor is asking for trouble and that is exactly what Hastings has found out. Close to a million customers lost and going from one of the most liked to least liked, way to go management.

[mlambush]

07:43 PM on 12/30/2011

I think that hits the nail on the head. It wasn't the increases so much as how they went about it. I think the only way to stop the bleeding at this point is to dump Reed Hastings.

[JMSmithers]

10:13 PM on 12/28/2011

Netflix is still a damn sight cheaper than cable and satellite. I'm not thrilled about the price hike, but am hoping that they will use some of the proceeds to acquire more content. I was most bothered by the idea of splitting the site and having two bills, accounts, etc. With the site as it currently is, when something in my DVD queue becomes available for streaming, it shows up on my instant watch queue. That would have gone away and that would have bothered me.

[ILoveGreatDanes]

08:36 AM on 12/29/2011

It's not about the money for me. It's about the attitude of entitlement the Netflix CEO has. "I have such a great product, therefore, you owe me this extra 60% monthly fee with nothing more in return." I have cable already and sure, I pay a lot more than I would pay even for the increased Netflix rate. But my cable company doesn't take me for granted. They treat me as a valued customer and give me loyalty discounts. The rare time I have a problem, they helped me right away. They have only raised my rate once, by $1/month in the five years I've had them. So I got Amazon Prime and canceled Netflix after the big rate increase.

[Istok]

12:34 PM on 12/29/2011

Yeah but your cable company was expensive to begin with.

[MissFrijole]

01:33 PM on 12/29/2011

My cable company sucks and they raised their rates a few months ago. I cancelled my service with them a couple weeks ago and haven't looked back. My fiance and I share his Netflix account and I share my Hulu account with him. 8 bucks a month is much better than 60 bucks a month with spotty service and poor customer service.

[James Bradley Cheatham]

09:18 PM on 12/28/2011

I love NetFlix....no complaints....just love.

[yeuxdebleu]

09:02 PM on 12/30/2011

No complaints from me either, James. For people who either don't want or don't have enough speed for streaming (like me) Netflix is fabulous. They lowered the price for DVD only so now I pay on $7.99 a month for as many DVDs as I can manage to watch in a month. It's a terrific bargain.

[johnpet]

07:43 PM on 12/28/2011

I'm done with Netflix, but not because of bitterness. I only rent about 2 to 3 "new" videos per month and use RedBox for that. I was streaming Netflix videos for a long time but they're just not uploading enough new quality content for me.