It is critical for MLSs and Brokers to measure the relationships they have with their customers. While most MLSs do not have DIRECT competition, they have tons of indirect competition. MLSs compete against companies that generate leads for agents since that it one of their key roles. They compete against training companies providing CE credit and teaching about technologies. MLSs also compete. MLSs also compete with companies that provide ways to aggregate and distribute real estate listing information for the purposes of monetizes the information flow. While MLSs have survived well in the real estate ecosystem, some are more well-regarded than others.
Brokers, on the other hand have TONS of competition from their fellow brokers. Understanding customer loyalty is even more critical for them.
To really know how well you are doing in building and strengthening customer relationships, it is critical that MLSs measure customer satisfaction.
There are two measures that WAV Group recommends for its clients – the Net Promoter Score® or NPS. Second is the Customer Effort Score or CEF®.
What is a Net Promoter Score (NPS)?
Net Promoter Score, or NPS is a customer experience metric developed by Fred Reichheld, aimed at determining the level of customer loyalty. NPS was introduced by Reichheld in his 2003 Harvard Business Review article “The One Number You Need to Grow“. Net Promoter Score measures a customer’s willingness to recommend a brand’s product and services to their friends, family and colleagues.
NPS is a simple metric, based on a single question that measures customer loyalty:
“How likely is it that you would recommend our company’s product and services to a friend or colleague?”
Respondents answer by choosing a number from 0-10, with 10 being the most likely to recommend. While this question can work well for brokerages and technology companies where there are lots of competition in the marketplace, we have seen it not work as well for MLSs, mainly because in most markets REALTORS® do not have a CHOICE of MLSs organizations to work with. Sometimes it angers MLS subscribers and they will say things like “I have no choice so I would have no need to recommend my MLS to anyone.
Graphic provided by Customer Gauge
Depending on the score they give, customers are then classified as promoters (score 9-10), passives (score 7-8) and detractors (score 0-6). The more 9 and 10 scores you receive the higher your Net Promoter Score will be. Those that give you the highest scores are likely the ones to tell their friends about your company and suggest that they work with you when they’re buying or selling their homes.
WAV Group’s survey software has the capability to measure this metric very easily. We use the NPS score with many of our brokerage clients.
What is Customer Effort Score (CES)?
There is another score called The Customer Effort Score. This metric looks at a business from a different perspective.
It measures the amount of effort it takes to interact with a company and get issues resolved or transactions completed. Research by CEB, the creators of the Customer Effort Score, suggest that exceeding expectations during service interactions makes customers only marginally more loyal than simply reducing effort.
The Customer Effort Score is based on another simple question:
“On a scale of 1 to 5, with 5 being the highest effort, please indicate the total effort that was required by you to complete your transaction or resolve your issue?”
Since Brokers, and MLSs are involved in complicated transactions that require support and service often, this metric can be very valuable. Agents interact a LOT with their clients during a transaction. It can be very valuable to understand how stressful and cumbersome they felt the transaction was working with one of a brokerage’s agents. If a client went through a lot of pain to buy or sell a home their chances of coming back to the same brokerage and the same agent are going to be pretty low. The Customer Effort Score can be a great predictor of repeat and referral business.
Brokerages and MLSs that are serious about creating life-long loyal relationships care a LOT about the customer experience. The only way to KNOW how are you doing with your clients is to measure their opinion.
There’s a classic business book called Good to Great that talks all about the power of benchmarking. Those who measure the effectiveness of their company’s service levels are MUCH more likely to be hugely successful according to Jim Collins, the author.
If you would like to learn more about what your customers think of your service and support, we’ll be happy to help. We have fielded research for many of the nation’s most successful brokerages, MLSs and technology companies. WAV Group has been able to help many organizations confirm they DO in fact deliver great service to their customers. We have also been able to diagnose areas of opportunity that have made our clients much stronger and much more successful ultimately.