The importance of customer satisfaction is becoming increasingly important again, thanks in part to platforms for voicing opinions on the web, such as social media sites. The importance is highlighted this week as we saw Netflix in the news again for its tremendous drop in customer satisfaction ratings, which plummeted along with stock prices over the past six months. Adequate research into customer opinion and the new accountability reinforced by social networks could have helped Netflix avoid this situation, and can be a positive differentiator for those that take advantage.
Reports yesterday indicated that Netflix’s customer satisfaction ratings dropped over the past year from 86 to 79, the biggest year-over-year drop of any of the companies analyzed in the ForeSee survey. The drop in ratings was not surprising, of course, given the enormous errors made by the company over the summer as it sought to split off its DVD rentals from its online streaming video. Droves of Netflix customers abandoned the company, and share prices have since dropped from a high near $300 to its current price just below $70.
Ten years ago, the effects of dissatisfaction could potentially be overcome with advances in technology as customer satisfaction became replaced by online convenience. But businesses can not afford to overlook customer satisfaction today with the rise in popularity and use of social networks. Every negative comment is now aired to thousands or even millions of existing or potential customers, dramatically multiplying the effects of even one dissatisfied customer.
The story of Netflix is one of a major disconnect between the management of a company and its customers. This type of disconnect could have been easily avoided had Netflix management conducted adequate customer opinion research prior to the announcements this summer, or had they not misjudged the new power of social media in empowering customers to voice their opinions.
The good news is that social networks can be used to differentiate those companies that have a finger on the pulse of their customers’ opinions from those that have not recognized their importance. Customer opinion research can ensure that companies give a little extra in those areas that forge bonds with their customers, taking advantage of those bonds as satisfied customers attract other customers using their newfound online voice.
