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How to Measure Customer Satisfaction

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How to Measure Customer Satisfaction

Start tracking the metric your business can’t live without in 2019 and beyond 


By Tim Musch, MarketSharp Software April 3, 2019
This article first appeared in the April 2019 issue of Pro Remodeler.

I know, I know … you’ve likely heard all the stats regarding the importance of online reviews to your business. But here’s a couple anyway.

• 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 metrics in your business such as closing ratios, cost per lead, net sales per lead issued, etc. But are you also measuring customer satisfaction? 

Customer experience isn’t a nebulous part of your business; it can be quantified with hard data. In fact, customer satisfaction is just as important to measure as cost per lead.

So, What Exactly Is PREA?

Today, many successful home services companies are keeping an eye on a new key performance indicator (KPI) called the positive review efficiency average (PREA). You can calculate this figure 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 same period. The higher the number, the better. A PREA of 60% or above is exceptional. Unfortunately, most companies’ PREAs are closer to 10-20% or less. 

Why PREA?

PREA gives you a clear, numeric indication of whether your customer-focused initiatives are working. Let’s say you had 100 clients over the past few months. Sixty completed a customer survey, and 50 of those said they’d be happy to recommend your company. That’s an 83% recommendation rate. Not bad! But how many of those 50 people actually submitted a review? Having silent, happy customers isn’t what you’re after.

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 give every one of your customers a truly remarkable experience, and then make it easy for them to submit positive feedback. Finally, you must be sure that all of these great reviews are easily visible to prospective customers. Companies like GuildQuality can help you with the entire process.

Once you have your company’s PREA, share it monthly with each member of your staff and let them know how they can help improve the PREA continuously. Obtaining a PREA of 60% means more thrilled customers telling your story for you, resulting in more leads and more sales. But, just as important, measuring PREA and reporting it to staff encourages each employee to do his or her part to create consistently exceptional customer experiences.


written by

Tim Musch

Tim Musch is director of business development for MarketSharp Software, a leading CRM solution.


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