Building a successful business requires building great customer relationships. Customer satisfaction is vital for customer retention and the overall health of a company, so it’s essential to measure it. There are some trustworthy methodologies to measure customer satisfaction every company should consider using.
In our latest podcast episode of Title Talks, guest Cindy Koebele, CEO and President of TitleSmart, shared how she implemented a customer service survey program at her company. In that interview, she mentions NPS surveys, so let’s look at what that means, another critical survey to use, and when to use each.
NPS and CSAT
The first step to collecting customer feedback is to decide what kind of survey to use. Not all survey methodologies are the same, and each will provide different insights on how customer interactions and experiences impact various aspects of your company.
There are two common types of surveys used to gather quick insights:
- Net Promoter Score (NPS)
- Customer Satisfaction (CSAT)
Each of these surveys can be easily added to any company’s workflow using survey tools like SurveyMonkey, but each asks a different question. Here’s the what, why, how, and when of NPS and CSAT.
Net Promoter Score (NPS)
What is NPS: The Net Promoter Score is a customer metric ranging from -100 to 100, measuring the willingness of a customer to promote or recommend your product or service to others. It was introduced in 2003 by Fred Reichheld. Since then, it’s become the most commonly used method of gathering customer feedback.
The question: “How likely are you to recommend this product or service to your friends and colleagues?”
The formula: Respondents are given a scale of 0-10 to rate how likely they are to recommend the brand. 0 for “highly unlikely” to 10 for “extremely likely.” Respondents are divided into three groups:
- Detractors – those who give a score of 0-6 are considered unhappy customers.
- Passives – those who give a score of 7 or 8 are considered satisfied but indifferent.
- Promoters – those who give a score of 9 or 10 are considered promoters.
The final NPS score is calculated by subtracting the percent of detractors from the percent of promoters.
Why companies use NPS: This question is designed to measure your customers’ long-term satisfaction or loyalty. Regularly monitoring Net Promoter Scores help companies make critical business decisions. It’s popular with executives because it’s a clear metric demonstrating brand advocacy and positively correlates with future business growth. Shifts in feedback can help pinpoint if and where changes in customer experiences need to be made.
How to set a benchmark: A significant benefit of using NPS is its standardized use across industry sectors. A score of 50 is considered excellent, but the average NPS score will vary depending on the industry. For instance, the financial services sector benchmark score hovers around 34. Compare that to the average of 61 for technology and 45 for consumer brands. Cindy mentions how difficult it is to find a benchmark score among her peers, but it’s important to start somewhere. Once you start gathering data, you’ll be able to adjust accordingly.
When companies use NPS: Companies typically utilize this type of survey annually or every 90 days. NPS is often referred to as the “big picture” metric because it helps provide an overview of your customer’s perception of your company. For that reason, it’s considered a relationship quality metric and not ideal for measuring a specific interaction. It’s also not considered ideal for new customers.
Of course, it’s important to follow up the first question with more to understand the motivation of the rating better. A number alone won’t tell you much about what your customers love or hate about your services. When used correctly and at the right time, NPS can give you precise insight into where you excel or fall short.
If you want to zoom into how specific interactions affect customer satisfaction, CSAT or a Customer Satisfaction Survey is the best bet.
Customer Satisfaction Survey (CSAT)
What is CSAT: A Customer Satisfaction Survey scores customer sentiment about a product or service on a scale of 1 to 5, resulting in a metric expressed as a percentage (0-100%).
The question: “How would you rate your overall satisfaction with [goods/services]?”
The formula: Respondents are asked to rate their satisfaction on a scale of 1 to 5.
- Very Unsatisfied
- Very Unsatisfied
The final percentage is calculated by counting the number of 4 and 5 scores (positive or satisfied responses) and dividing that by the number of survey responses, then multiplied by 100 to give you a percentage of satisfied customers.
Why companies use CSAT: While the NPS is considered a relationship metric, the CSAT is viewed as a touchpoint metric. That means it’s more geared towards understanding a specific customer interaction or touchpoint in the buyer’s journey rather than gauging overall sentiment. Respondents who give a rating of 5 are likely to be return customers and even recommend your services. Ultimately, this score will help companies understand whether their level of customer service is meeting expectations.
How to set a benchmark: As with NPS scores, setting a goal based on the average performance of direct competition in the title industry may be difficult. The American Customer Satisfaction Index provides an overview of average CSAT scores by industry and sector. The average for finance and insurance in 2020 was 76%. Beyond that, there isn’t a relevant breakdown of those scores for title professionals.
When companies use CSAT: This can depend on what interaction you want to understand better, but in general, the CSAT is a “right here, right now” metric. Typically, it’s deployed right after purchase. I’m sure you’ve noticed those messages on the bottom of receipts or that pop-up window asking you to rate your shopping experience.
Closing on a home isn’t like a typical B2C experience where purchasing decisions are quicker and carry far less risk. It makes sense to ask this question right after a closing, but consider where there may be other opportunities to learn more about how various parties in the closing feel about your services. In general, there are three main touchpoints:
- At the beginning of the customer relationship
- After looking for answers to questions
- After a transaction
The question is simple for customers to answer and less intimidating than the NPS question for new customers. It’s a great tool for staff to quickly understand where they need to improve customer service.
Where to ask for feedback
The best practice is to deliver the survey in the channel where you interact with the customer. For most title companies, this is likely to be email or phone calls, but if your company has a website that clients use, don’t pass up the opportunity to gather feedback there. There are tons of survey tools with templates for NPS and CSAT available to help you get started.
Turning feelings and experiences into data points can be tricky. Using NPS and CSAT together will give companies important KPIs to make sound business decisions to improve the customer experience. They also help staff and leaders better reflect on how process changes have positively or negatively impacted customers. However, surveys shouldn’t replace those meaningful one-to-one conversations with clients that build strong relationships.
Listen to Driving More Business with Better Customer Service now!
This content is provided for informational purposes only. PropLogix, LLC (PLX) is not a law firm; this content is not intended as legal advice and may not be relied upon as such. PLX makes no representations as to the accuracy, reliability, or completeness of this content. PLX may reference or incorporate information from third-party sources, upon which a citation or a website URL shall be provided for such source. PLX does not endorse any third party or its products or services. Any comments referencing or responding to this content may be removed in the sole discretion of PLX.