Last month I attended a SEMPO New York networking event that featured an “In-House versus Agency” debate, in which the debaters argued the benefits of each model. After the debate, I was speaking with one of the agency panelists, and we discussed the challenges agencies face differentiating themselves from their competitors given the number of search marketing agencies in the market today.
A key point that is often overlooked from my perspective is that differentiation is not only about how your prospective customers view your agency, but also how prospective job candidates view it.
As a quick exercise, grab a pen and paper and imagine you are interviewing someone for an open search marketing position in your firm, and he or she asks you, “what do you feel differentiates your agency from your competitors?” Quickly jot down what you would say.
Are your points of differentiation something like the following?
- Our team provides world-class customer service.
- We hire great and passionate people.
- Our company has an established track record with proven results.
- We have developed a customized SEO / SEM methodology that works.
- We have an experienced team of industry thought leaders.
- We take the time to understand our customers’ business goals.
Let me first say that I believe you do all of these things well, but you should be aware that every other employer that candidate interviews with is saying the same things that you are. So how do you demonstrate to this future employee that your company is different – and you really are the customer service leader and deliver rock-solid results for your customers?
I would recommend you evaluate using the Net Promoter Score (or NPS) as a way to both validate why you are different, as well as drive growth and profitability. I am not aware of any search marketing firms that are using NPS as a customer satisfaction measure, or at least any that have publically acknowledged it, and it surprises me given the metrics-focused culture of search.
So what is NPS and how does it work? NPS was developed by Fred Reichfeld, a consultant with Bain & Company, as a way to provide an indicator of a company’s performance from the perspective of its customers, as well as measure its ability to drive growth and profitability.
Your NPS score is based on how your customers answer a single question: “how likely is it that you would recommend this company to a friend or a colleague?” Your customers answer this question using a scale of 0 to 10 (with 0 being the lowest score and 10 being the highest.) Based on how they answer this question, all of your customers can be divided into three categories: promoters, passives, and detractors.
- A promoter (a customer who rates you a 9 or a 10) is unflinchingly loyal to your company; and when asked about their experience with your firm, will evangelize your business and its services.
- A passive (a customer who rates you a 7 or 8) is neutral about your company’s performance. When asked how their company’s search marketing engagement went with your agency, the response might be along the lines of, “They did their job.”
- A detractor (a customer who rates you a 0 to a 6) is unhappy with your company’s performance. If asked about their company’s relationship with your firm, the customer will provide negative feedback and ultimately discourage other prospective customers from engaging with your firm.
The way to calculate your NPS score is by aggregating your survey results and then subtracting the percentage of detractors from the percentage of promoters (i.e. Promoters – Detractors = Net Promoter Score). The passives are considered neutral so are not factored into the score. For example, if 70% of your customers were promoters, 10% were passives, and 20% were detractors, then your NPS would be 50% (70% – 20%).
The power of NPS is not based on how high you scored on your first NPS survey, but instead the subsequent impact you get from your employees and company becoming focused on improving the score. An increase in your NPS score means you are getting more referrals and higher customer satisfaction — which will lead to more growth and profitability. NPS practitioners typically survey their customers monthly so they can continually tweak and their company’s internal processes until they hit their NPS goal.
NPS has been used at Enterprise Rent-A-Car, GE, and many others, and I believe it is a great tool for search marketing agencies as well. Having an NPS program focused on driving NPS improvement provides your customers with a simple metric of why your agency is great at what you do, and equally important, an illustration to your future employees of why your agency is a great place to work.
If you wanted to read more on NPS, here are some useful links:
- Net Promoter Score on Wikipedia
- The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld
Ken Clark is the Executive Vice President of Onward Search, the Leading Provider of Search Marketing Professionals. Ken can be reached at firstname.lastname@example.org.