“If you don’t take care of the customer, somebody else will.” It’s a wise saying in business and one that ForeSee Results’ recent survey is impressing as it links e-commerce retailers’ financial performance with customer satisfaction. The survey, which evaluated the top 100 retailers by sales volume, found that shoppers had more positive online experiences at the outset of 2010 compared to a year ago, indicating an increased likelihood that they would make return visits, make additional purchases through online and other sales channels, and pass along word-of-mouth recommendations. The results are especially important as consumer spending has been back on the rise this year, and shoppers are increasingly turning to online retailers for their competitive pricing and greater selection and convenience.
Here’s a look at the survey’s five highest-rated companies to see how customer satisfaction has impacted their strategies and balance sheets:
The company renowned for serving up entertainment through the mail and online has been a perennial leader. It ascribes its revenue and subscriber growth in part to high levels of customer satisfaction. In 2009 Netflix’s sales grew to $1.67 billion, a more than 20% increase from 2008, and its profits rose to nearly $116 million, a roughly 40% increase. Since 2005, Netflix’s sales have more than doubled (from $682 million), while its profits have grown nearly three-fold (from $42 million).
Earth’s largest retailer of anything has been a regular runner-up in the race for most satisfied customers. The company works to increase product sales by fine-tuning its shoppers’ online experience. Its top priorities include lowering prices, expanding product selection, offering faster delivery, and improving its site’s usability. From 2008 to 2009, Amazon’s revenues reached $24.5 billion, a more than 25% increase, while its profits grew to $902 million, about a 40% increase. Since 2005, both revenues (from about $8.5 billion) and profits (from $333 million) have nearly tripled.
The world’s largest direct seller of beauty products is keyed into delivering quality service through its force of some 6 million independent representatives, as well as online. The company’s e-commerce site has been successful at attracting repeat customers and has seen its revenues grow over the years. It has been recognized for its convenience, ease-of-use, and quick service. Avon, which does not break out sales through its e-commerce site in its annual reports, saw its revenues dip slightly in 2009 to about $10.4 billion, about a 3% decrease. However, since 2005 the firm’s sales have largely been on the upswing, growing from $8.15 billion, a more than 25% improvement.
Another company recognized for its customers’ satisfaction (and enthusiasm) is Apple. Operating both online and retail stores, the company works to attract new customers and keep their existing ones by providing high-quality support during and after the sale. After slipping in the rankings in 2009, Apple bounced back with one of the most improved satisfaction ratings in 2010. It does not segment sales through the online store in its annual reports, but the computer and electronics maker did see its sales rise to $36.5 billion in 2009, a more than 10% improvement, and since 2005 revenues have more than doubled. Profit growth has been even more significant: In 2009 the company logged net income of $5.7 billion, a nearly 20% increase, and since 2005 profits have more than quadrupled (from $1.3 billion).
The online business unit of America’s top bookstore chain rounds out the top 5 list. The subsidiary is at the center of Barnes & Noble’s marketing program, strengthening its brand as well as serving as its direct-to-consumer outlet. The ForeSee survey found that BN.com shoppers’ purchase intent (which measures the likelihood of future purchases by site visitors) was nearly on par with Netflix and is fueled by strong online performance and an expansive offline store footprint. Barnes & Noble.com generates about 10% of its parent’s total revenue. In 2009 it brought in $466 million in sales, about a 2% decrease from the year before.