Netflix Customer Satisfaction Rebounds
Last year was a year Netflix would like to forget. A series of service bungles had their customers grousing and leaving the service like rats from a sinking ship. Now, however, there are signs that the entertainment distributor has mended its fences with its subscribers and is poised for success in 2012.
A case in point: the most recent e-tailer customer satisfaction numbers from customer experience analytics firm ForeSee.
The company rates customer satisfaction with e-tailers on a scale of 0-100. While Netflix's rating, 81, was four points lower that what it was a year ago, it's two points higher than it was during the holiday season. In other words, it's trending upwards.
More important, it has crossed over the magic 80 point mark, which ForeSee calls the "Threshold of Excellence." Scoring at 80 or above is an indicator of superior customer satisfaction performance.
With its score of 81, Netflix still placed in the top 20 e-retailers, which may surprise some considering the nadir it reached in its relationship with its customers last year when it lost 800,000 subscribers in the calendar quarter ending in September alone.
Improving customer satisfaction and some new strategic deals for greater international distribution of its service has made some Netflix watchers optimistic. "With the positive consumer numbers for the start of 2012, along with recent deals Netflix has made with major media corporations, the company is well-positioned to endure the rocky months ahead to emerge as a highly profitable company by the end of 2012," wrote Chris Frangold at Saving Alpha.
ForeScore, though, was more cautious about Netflix's future, especially since Amazon appears to be interested in invading the entertainment distributor's turf. "That is going to spell even bigger trouble for Netflix," study author Larry Freed, who is also president and CEO of ForeSee, said in a statement.
"The two companies used to vie for number one," he continued. "Now Netflix is floundering just as Amazon is making deeper moves into streaming video and even original programming. Netflix regained some lost ground, but it’s no longer a contender."
Netflix's troubles last year began when it decided to change its pricing plans. It abolished low-priced plans that combined receiving DVDs by mail with streaming video. It replaced them with separate plans for each, which resulted in a 60 percent increase for some subscribers.
The move caused customers to desert Netflix in droves, and the company's stock to nearly halve in value—to $160 from $300—in three months.
Netflix made matters worse by announcing that it was spinning off its DVD-by-mail business as a separate entity called Qwikster. It quickly retreated from that idea and strangled Qwikster in the bud.