I know, I know… you’ve likely heard all the stats regarding the importance of online reviews to your business. Here’s a couple…
- 84% of people trust online reviews as much as a personal recommendation
- 73% of consumers think that reviews older than 3 months are no longer relevant
Here’s the thing… You’re probably already measuring several things in your business such as closing ratios, cost per lead, NSLI (net sales per lead issued), etc. But, are you also measuring customer satisfaction? Customer experience isn’t a nebulous, hard-to-define part of your business, it can be quantified with hard data. According to Erin Rosintoski Lewis, Director of Marketing at GuildQuality, who have worked with thousands of home improvement companies, customer satisfaction is just as important a thing (maybe more so) to measure as cost-per-lead.
So Exactly What Is PREA?
Here’s the simple formula… PREA = PRO /CJ!
Today’s most successful home services companies are keeping an eye on a new KPI (Key Performance Indicator) called Positive Review Efficiency Average (PREA). You can calculate this statistic very simply by taking the number of Positive Reviews Obtained by your company in a given time period and dividing that by the number of Completed Jobs in the given time period. The higher the number, the better. A PREA of 60 percent or above is an exceptional rating. Unfortunately, most companies PREA is more like 10-20% or less! Yikes!
Measuring the efficiency of something shows the output gained from the time and resources invested, so PREA gives you an indication of whether your customer-focused initiatives are working and resulting in delighted customers willing to tell the world about their experience. Whether you work with a third party and have implemented a proactive system of gathering customer feedback and online reviews on every job, or even if you simply point your customers to Google and ask them to leave a review, PREA is a statistic you can (and should) measure.
Here’s an example: Let’s say you worked with 100 clients over the past couple months. 60 of those customers completed your customer survey initiated by a third party or yourself, and 50 said they’d be happy to recommend your company to friends. That’s an 83% recommendation rate. Not bad! An 83% recommendation rate is strong and great to publicize. But the question is… how many of those 50 people actually DID submit an online review? Having silent, happy customers isn’t what you’re after in today’s marketplace.
Remember the formula… PREA = Positive Reviews Obtained ÷ Completed Jobs. Let’s say 30 of those 100 new customers actually submitted a positive online review. That would give you a PREA of 30% (30 positive reviews submitted divided by 100 new customers)!
The Value of Tracking PREA
Why should you begin tracking this KPI immediately? Simply put, accountability. What gets measured can get managed. Your job is to first give each and every one of your customers a truly “remarkable” experience in the literal sense of the word. You then simply make it very easy for them to submit their “remarks” about the experience with you. And finally, you must be sure all these great reviews are easily visible online to prospective customers. Companies like GuildQuality can help do all of this for you if you’re not up to the task yourself.
Bottom line: Numbers don’t lie, and you should embrace the opportunity to measure this important business metric and consistently ACT on your findings. Then, share this number with each member of your staff monthly and let them know how they can help improve your PREA continuously. Get your PREA to 60% and you will have more thrilled customers telling your story for you resulting in more leads and more sales! But AS importantly, measuring this important number will stimulate and hold each and every staff member in your company accountable to do their part in creating exceptional customer experiences!
Tim Musch, MarketSharp – Director of Business Development
Industry Expert | Fierce Racquetballer | Multi-Instrument Musician