Added On: Tuesday, December 30, 2008

Amazon Hangs Tough in Satisfaction Stats

By Christopher Saunders
December 30, 2008

Online retailer Amazon and Internet DVD rental service Netflix led e-tailers in customer satisfaction during the holiday shopping season.

But other major e-tailers stumbled and saw their customer satisfaction wane, according to the latest annual survey conducted by online customer satisfaction consultancy ForeSee Results and market analyst firm FGI Research.

The survey found that visitors to the e-commerce stores operated by retailers including Circuit City, Gap and Home Shopping Network all reported steep satisfaction drops.

That may come back to sting those merchants. According to ForeSee and FGI, a satisfied site visitor is 73 percent more likely to purchase online, 38 percent more likely to purchase offline and 75 percent more likely to recommend the site than would a dissatisfied shopper.

As a result, the researchers said that e-tailers with higher customer satisfaction are more likely to see a strong year of sales to come, while those that struggled in the rankings may have a tougher 2009 in store.

That's likely to be unwelcome news to retailers looking for signs of hope in the coming year after a brutal showing in 2008.

"In a recession, knowing that improving customer satisfaction with your Web site can engender that kind of loyalty and purchase intent is like money in the bank," Larry Freed, ForeSee Results' president and CEO, said in a statement. "But too many e-retailers are ignoring this crucial metric, and it shows in the results of our study."

Amazon, Netflix rise to the top

ForeSee and FGI's survey examined the top 40 retail Web sites and calculated their results based on the University of Michigan's American Customer Satisfaction Index (ACSI).

Amazon (NASDAQ: AMZN), which posted a satisfaction score of 84 in ForeSee Results' study, said last week that the holiday season has been its best ever, selling 6.3 million items during its peak day of sales, Dec. 15.

"Amazon has really done a great job," Freed told InternetNews.com. "Over the last couple of years, they've added a lot more products and retailers they're selling."

It's unclear yet whether the increase in sales -- or in Amazon's two-point increase in ForeSee's score from last year -- can be attributed to joining in on the steep discounting seen throughout the retail market this season. As a result, it's difficult for anyone outside of the company to say how Amazon's performance will translate into actual profits. Spokespeople for the e-commerce giant declined to disclose how much it earned during the shopping period.

"It's very gratifying," Craig Berman, a spokesman for Amazon.com, told InternetNews.com. "We're certainly grateful to our customers who participated in the survey and said great things about us."

"We work hard everyday to live up to our motto of striving to be the [most] customer-centric company on the planet," he added. "That's what we focus on, and it's very gratifying to get results back like this from our customers."

Netflix (NASDAQ: NFLX), last year's leader, also scored a satisfaction index of 84 -- representing a two-point decline from last year but still keeping it tied for first place.

Spokespeople at the company declined to disclose specific figures on how it fared during the holiday season. Any results, however, may be buoyed by recent launches of streaming video services on consumer electronics devices like Microsoft's Xbox 360 game console, and Sony and LG Blu-ray players.

Netflix spokespersons attributed its top ranking -- its eighth since ForeSee began ranking e-commerce sites biannually in 2005 -- to the movie rental site's convenience, selection and value.

"Netflix provides all three in equal measure," Steve Swasey, a spokesman at the company, toldInternetNews.com. "Great companies try to do everything they can for the consumer."

"We're always doing things to make the customer experience better and better," he added. "We always look for things that improve the customer experience: reducing prices, which we've done in the last year; adding titles to the site -- we add about 300 titles a week on DVD -- or improving the way you get you discs by opening more distribution centers ... or by streaming them ... or adding more white space [to the site] to make it easier to see."

Swasey also said that another key part to delivering customer service is ensuring that problems, such as Netflix's multi-day shipping slowdown earlier this year, are dealt with quickly.

"When we make a mistake, we own up to it and make it right with our members," he said. After the shipping problem had been fixed, the company issued credits to affected users without prompting -- "without any hue and cry from anybody," he added.

Online retailer Amazon and Internet DVD rental service Netflix led e-tailers in customer satisfaction during the holiday shopping season.

But other major e-tailers stumbled and saw their customer satisfaction wane, according to the latest annual survey conducted by online customer satisfaction consultancy ForeSee Results and market analyst firm FGI Research.

The survey found that visitors to the e-commerce stores operated by retailers including Circuit City, Gap and Home Shopping Network all reported steep satisfaction drops.

That may come back to sting those merchants. According to ForeSee and FGI, a satisfied site visitor is 73 percent more likely to purchase online, 38 percent more likely to purchase offline and 75 percent more likely to recommend the site than would a dissatisfied shopper.

As a result, the researchers said that e-tailers with higher customer satisfaction are more likely to see a strong year of sales to come, while those that struggled in the rankings may have a tougher 2009 in store.

That's likely to be unwelcome news to retailers looking for signs of hope in the coming year after a brutal showing in 2008.

"In a recession, knowing that improving customer satisfaction with your Web site can engender that kind of loyalty and purchase intent is like money in the bank," Larry Freed,ForeSee Results' president and CEO, said in a statement. "But too many e-retailers are ignoring this crucial metric, and it shows in the results of our study."

Amazon, Netflix rise to the top

ForeSee and FGI's survey examined the top 40 retail Web sites and calculated their results based on the University of Michigan's American Customer Satisfaction Index (ACSI).

Amazon (NASDAQ: AMZN), which posted a satisfaction score of 84 in ForeSee Results' study, said last week that the holiday season has been its best ever, selling 6.3 million items during its peak day of sales, Dec. 15.

"Amazon has really done a great job," Freed told InternetNews.com. "Over the last couple of years, they've added a lot more products and retailers they're selling."

It's unclear yet whether the increase in sales -- or in Amazon's two-point increase in ForeSee's score from last year -- can be attributed to joining in on the steep discounting seen throughout the retail market this season. As a result, it's difficult for anyone outside of the company to say how Amazon's performance will translate into actual profits. Spokespeople for the e-commerce giant declined to disclose how much it earned during the shopping period.

"It's very gratifying," Craig Berman, a spokesman for Amazon.com, toldInternetNews.com. "We're certainly grateful to our customers who participated in the survey and said great things about us."

"We work hard everyday to live up to our motto of striving to be the [most] customer-centric company on the planet," he added. "That's what we focus on, and it's very gratifying to get results back like this from our customers."

Netflix (NASDAQ: NFLX), last year's leader, also scored a satisfaction index of 84 -- representing a two-point decline from last year but still keeping it tied for first place.

Spokespeople at the company declined to disclose specific figures on how it fared during the holiday season. Any results, however, may be buoyed by recent launches of streaming video services on consumer electronics devices like Microsoft's Xbox 360 game console, and Sony and LG Blu-ray players.

Netflix spokespersons attributed its top ranking -- its eighth since ForeSee began ranking e-commerce sites biannually in 2005 -- to the movie rental site's convenience, selection and value.

"Netflix provides all three in equal measure," Steve Swasey, a spokesman at the company, told InternetNews.com. "Great companies try to do everything they can for the consumer."

"We're always doing things to make the customer experience better and better," he added. "We always look for things that improve the customer experience: reducing prices, which we've done in the last year; adding titles to the site -- we add about 300 titles a week on DVD -- or improving the way you get you discs by opening more distribution centers ... or by streaming them ... or adding more white space [to the site] to make it easier to see."

Swasey also said that another key part to delivering customer service is ensuring that problems, such as Netflix's multi-day shipping slowdown earlier this year, are dealt with quickly.

"When we make a mistake, we own up to it and make it right with our members," he said. After the shipping problem had been fixed, the company issued credits to affected users without prompting -- "without any hue and cry from anybody," he added.

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