Amazon tops customer satisfaction in online retail in 2011

A latest customer experience analysis released on Wednesday showed that Amazon topped consumer satisfaction in online retail in 2011. According to the annual Holiday E-Retail Satisfaction Index by ForeSee, Amazon climbed two points to score 88 on the study's 100- point scale, registering the highest score from any retailer in 14 consecutive studies. The report said it is tough for a smaller retailer to compete with the level of dedication to providing an excellent customer experience like Amazon. DVD-rental and Internet streaming service Netflix plummeted by seven points to 79 as it was battered by angry customers after announcing a price hike in July and a plan to separate the DVD rentals and streaming in September.  Amazon and Netflix, which are increasingly in direct competition in steaming and rental, have been only separated by a point or two for years in terms of customer satisfaction, but the nine points this year could be too wide for Netflix to overcome soon. "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, American consumers were less price-sensitive during the 2011 holiday shopping season than they were last year, said the report. It noted that customer satisfaction is one of the most powerful things a retailer can do in any channel to increase sales, loyalty, and positive word-of-mouth recommendations.