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Netflix Last in Customer Satisfaction: What Investors Need to Know

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What's happening in the headlines can affect you as an investor. Here's what's going on, what you need to know, and what you should expect.

The headline
Reuters is reporting that Netflix (Nasdaq: NFLX  ) is among the worst performers of the 2011 holiday season in terms of online customer satisfaction, a survey by ForeSee reveals.

The details
(NYSE: GPS  ) and Sony (NYSE: SNE  ) were also was among the worst. (Nasdaq: OSTK  ) came in dead last. Topping the list, for the 14th consecutive time, was (Nasdaq: AMZN  ) . Apple (Nasdaq: AAPL  ) tied for third along with J.C. Penney,, and

Netflix saw the biggest decline in the ForeSee survey after the company tried to raise prices and split its DVD and video-streaming services, dropping seven points, the largest decline of any retailer in the survey. "Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors," Larry Freed, chief executive officer of ForeSee told Reuters. Netflix had come close to customer-satisfaction leader in previous ForeSee surveys.

Now what?
Netflix shares lost more than half their value this year, with the vast majority of the decline coming after the company unveiled its intention to split its services. Being better schooled in the ways of retail life on the Internet than most of its peers, and also seemingly better run, Netflix really should have known better than to have idly squandered more than a decade's worth of customer goodwill.

Hopefully, all of the companies that did poorly on this survey will read the results and take them to heart. For those that performed well, hopefully they won't take their eyes off the online-customer ball, because it doesn't take a Fool to know that the world of retail sales is shifting more and more online. Companies that don't get this part of their business right, a la Netflix and Gap, will be in big trouble if they don't mend their ways quickly.

Keep track of what's happening with Netflix and the other companies mentioned here by adding them to My Watchlist, a free service of The Motley Fool that lets you easily keep up with everything on your investing radar.

Fool contributor John Grgurich loves his Twitter newsfeed so much he wants to marry it, but he owns no shares of any of the companies mentioned above.The Motley Fool owns shares of Gap,, and Apple. Motley Fool newsletter services have recommended buying shares of, Netflix, and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a scintillating disclosure policy.

Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 28, 2011, at 7:24 PM, mountain8 wrote:

    I know why my shares dumped. What I need to know is from it's announcement of the split, until now, what has changed? Are they coming back? How do the fundamentals compare to pre-stupidity? How are they doing on their international expansion? What do their stats say about the future?

    Your article didn't tell me, as an investor, what I need to know.

  • Report this Comment On December 29, 2011, at 9:43 AM, XMFGrgurich wrote:

    The article was simply reporting on the fact that Netflix did very poorly on a customer satisfaction survey, and juxtaposed that with the performance of its peers. Please check out the rest of I'm sure what you're looking for has been covered elsewhere. Our analysts are thorough and quite prolific.

    Cheers. Thanks for the comment.

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