How do we gauge customer satisfaction?
A year and a half ago, we posed the question – how do we know if customers are satisfied with our work?
- Sometimes they tell us about it. OK, it’s a good point, but only some people do it, so it’s hard to extrapolate their opinion to everyone, especially when there is a simultaneous opinion of a dissatisfied customer.
- Can we infer from the fact of successive contract renewals? Sure, but on the other hand, some customers do not renew because they came to us by design, because they do not have a budget for Poland, etc. How, then, to be able to infer?
- How about considering multi-year contracts? Or those for an indefinite period? How about…?
Instead of another “maybe” – we decided to ask. We knew from the beginning that we didn’t want massive surveys that very few customers would end up filling out. Therefore, we reached for a proven tool – the Net Promoter Score (NPS).
Net Promoter Score – which is what?
NPS is well-known in the IT industry, but it can be used anywhere – for example, in marketing, PR, and communications services. The short survey, consisting of just two questions, allows for an independent numerical evaluation, identifying areas for improvement and acquiring information about expectations.
The Net Promoter Score was introduced in 2003 by Fred Reichheld, Bain & Company, and Satmetrix. It is now broadly used worldwide to measure customer satisfaction and loyalty. In its basic version, it is based on the following two questions:
- Would you recommend our services to your friends? (choice of value on a scale of 0-10)
- Why? (This question can be more elaborate – it must be a clarifying and open-ended question).
Our survey consists of 3 questions:
- a question on what sets our agency apart,
- inquiry about areas for improvement.
The entire survey can be fulfilled in 3-5 minutes. Questions about distinction and areas for improvement are not obligatory, but practically all customers who completed the survey decided to give these answers.
How is the NPS index calculated?
Numerical answers (the first question) are categorized into 3 groups:
- promoters (people who marked 9 or 10 on the scale – those who can potentially recommend our services),
- indifferent (those who selected points 7 or 8),
- detractors (people who marked points 0-6 on the scale; these are customers who will potentially discourage our services).
The NPS index is calculated based on question one, using the formula:
NPS = (percentage of promoters) – (percentage of detractors)
The NPS index can take a value from -100 to +100. Generally, a score above 50 is considered very good, and a level above 70 is considered world-class. Of course, the index undoubtedly fluctuates over time, but the goal is for such quality to strive to increase this score over time and to reduce the proportion of detractors.
NPS Planet Partners
A survey conducted last year gave us a score of 75. This year’s survey (conducted in July) gave us an even higher score of 80.
If a score above 50 is considered very good, how to interpret… 80?
We could write that this score places us between two love brands – Starbucks (NPS 77) and Tesla (the highest score in the world so far – 96). But it still doesn’t say anything – especially if, for someone, Starbucks or Tesla are not brands they appreciate.
That’s where our next step came from – relating the NPS index to our industry. Unfortunately, while searching for benchmarks, we discovered that few PR or communications agencies conduct an NPS survey of clients (not only in Poland). For this reason, we decided to check the NPS of consulting firms and marketing agencies. Depending on the statements, the former have an average NPS between 55 and 68, while the latter have an average NPS between 30 and 60. In this situation, a score of 80 is a result that illustrates world-class quality.
And why the other two questions?
The other two questions are used to expand our knowledge of ourselves in customers’ eyes. The nice one (what we do well, what we excel at), as well as the less nice one – what we should improve. Both answers are essential to us, especially if they are repeated. Without them, we can guess what is worth changing. With them – we know it.
We are currently measuring the satisfaction of customers working with us (both in the long term and by project). Ultimately, we also want to launch an NPS survey for the sales process and among employees and job candidates at Planet Partners.