Understanding the Study
In order to understand how the study is done one first needs to know how the retailers measured are selected. The study measures the top 100 online retailers as identified by Internet Retailer in accordance with 2009 sales volume. While this does measure industry leaders not all retailers have chosen to participate in Internet Retailer’s Top 500 because quite a bit of company information is published. Retailers like us for instance are privately held and therefore do not publish this type of information. We have therefore declined to participate, so there may very well be other retailers out there who are also not included for similar reasons. Customer satisfaction is then measured by FGI Research’s SmartPanel, “a nationwide group of 1.6 million consumer households that have agreed to participate in opt-in surveys – and analyzed using the methodology of the American Customer Satisfaction Index (ACSI), which was developed at the University of Michigan.” Of the group, data was collected from 23,400 respondents who visited the online retailers studied within a two week time period regardless if the respondent made a purchase or not.
The study measures four key areas that affect customer satisfaction: price, merchandise, website functionality, and content. Typically merchandise is the greatest factor affecting customer satisfaction, but this year it tied website functionality at second with price being the highest customer satisfaction priority. Economic conditions have obviously played a large role in increasing the importance of price as a factor affecting customer satisfaction, and will likely continue to do so throughout this year.
Customer Satisfaction Impacts Revenues
“Researchers at the University of Michigan have conclusively shown a strong connection between customer satisfaction and a company’s financial future, regardless of whether the markets are up or down. Companies that perform well on the American Customer Satisfaction Index (ACSI) enjoy better revenues, profits, loyalty, word-of-mouth recommendations, and return visits. They even achieve higher stock prices. The University of Michigan’s findings have been corroborated by other universities, and the findings are consistent: high customer satisfaction, when measured scientifically, predicts success.”
The study also concludes that a point increase in customer satisfaction can mean an average increase of $89 million in year-over-year online sales regardless of outlying economic factors.
While Amazon may be the internet retail giant in overall sales, they came in second to Netflix who leads the study as the top scorer for customer satisfaction for the fourth year in a row now. Netflix scored 87 out of 100 with Amazon following at a close second with 86 out of 100 points. Historical changes in scores as well as who made the top nine can be seen in the image below:
The study breaks down retailers by category and also provides other key factors that contribute to retailer success, as they relate to customer satisfaction. To get your copy of the study visit this link.
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