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Learning how to calculate NPS (Net Promoter Score) is pretty straightforward – once you understand how it works, you can become adept in identifying promoters and detractors.
But the real challenge lies with how to use and improve net promoter scores – in other words, learning how to approach customer feedback and address it effectively. As with all metrics, NPS has its limitations, so knowing how to manage surveys and scores is essential to improving customer satisfaction and loyalty.
In order to help you achieve this, we asked Acquire’s own Director of Customer Success Melissa McMillan to share her experience with NPS as a seasoned professional in the field.
Before we dive deeper, here’s a brief net promoter score explanation.
Net Promoter Score (NPS) reflects how likely customers are to recommend your company to others.
You can determine NPS easily by sending out one-question surveys. The traditional question is “On a scale of 1 to 10, how likely are you to recommend us to someone else?” Based on their answer, customers are classified as promoters (9-10), detractors (0-6), or passives (7-8). The final NPS Score is the percentage of promoters minus the percentage of detractors, which can be any number between -100 and +100.
According to research, this metric is the most popular among customer experience KPIs.
The main answer is simple: since NPS is designed to reflect your customers’ willingness to recommend your brand, your efforts to improve NPS scores are basically efforts toward increased customer satisfaction and loyalty.
Also, conversations with the board of directors are often supported by customer experience metrics like NPS, so it’s good to be able to show growth and improvement in customer experience. McMillan highlights this:
When I go to the board, I need to be able to show certain things. Churn rates and MRR are important, but I also need to talk about NPS and [how it’s getting stronger each quarter] to prove that what we're doing – buying all this software or hiring all these people – is working. That these efforts are making our customers more satisfied.
Note that this is especially beneficial if your industry generally has low or average NPS scores: by acting to improve NPS, you’ll help your company gain competitive advantage. Here’s a breakdown of Net Promoter Scores by industry for your reference:
Here are six tips to ensure effective use of net promoter score surveys to improve Net promoter scores (NPS) and customer satisfaction:
The ‘when’ in sending NPS surveys matters because you need to be able to show the metric’s progress over time, without leaving too much time between intervals or annoying customers by surveying too frequently. This is an essential point to the implementation of your net promoter score strategy.
The standard business practice is sending quarterly surveys to all customers. McMillan says that some companies might do annual or bi-annual surveys depending on their business needs. But, she adds: “If you’re in the SaaS space or a startup, once in every quarter is generally what you're going to want to do.”
There’s an interesting article on medium referring to the problems of NPS from a statistical standpoint. One thought-provoking criticism is that, since detractors are classified based on a grade of 0 to 6, any bump in the detractors’ scores will not be reflected in the NPS score.
For example, if 80 percent of your detractors gave a score between 0 and 4 in Q1, and in Q2 and Q3 they started giving you a 6, there’s significant progress in customer satisfaction. But, NPS won’t show that.
So, it pays to look at the average scores of promoters, detractors and passives. Companies need to keep an eye on any changes, for better or worse, regardless of whether overall NPS remains the same or only changes slightly. The size of your samples also matters to see if your scores are statistically significant, so, if you or someone you work with knows statistics, use that knowledge.
NPS is useful, but it shouldn’t be considered alone. Apart from its flawed statistical properties, it also has another limitation: it doesn’t shed light on what’s working and what isn’t at any given time.
A promoter or a passive can have an issue with your product, but they may still like your business as a whole. Granted, their score still means they aren’t close to churning, but relying only on NPS denies you the opportunity to create strong customer relationships by addressing existing issues.
That’s why it’s good to use event-based CSAT surveys alongside NPS. You get a quarterly score from NPS – plus you get many other scores from surveys after significant events, like customer training and onboarding. As McMillan puts it:
We’ll send to [users] after training to ask ‘How do you feel like your training went?’, ‘Do you feel like you've got what you needed?’ It’s also good to send surveys, for example, when we have a new feature, or maybe a new product. ‘Have you gotten to play around with new features X, Y, and Z and what did you think? Are they easy to use and are they actually useful to your business?’
The same approach is useful in B2C, for example in hotels, retail, or ecommerce. You can send a survey right after someone books a room, or when they arrive, to gauge their sentiment at every stage.
CSAT surveys are super useful to gauge short-term satisfaction and capture your customers’ moods, something NPS doesn’t do. But they also need NPS, too. McMillan emphasizes that: “We might ask someone ‘how was your training?’ and they give it a five,” she says. “But in the quarterly [NPS] survey, they give us a nine because they love the product. They just didn't love that training session.”
So, it’s best to combine the two methods in order to capture your customers’ feedback more accurately.
A survey is an important piece of feedback from your customer. They expect you to follow through – according to a Microsoft report, 77 percent of customers “have a more favorable view of brands that ask for and accept customer feedback,” and customer satisfaction depends on translating that feedback into actionable customer satisfaction plans, starting with reaching out to them and getting more insight on what works and what doesn’t.
As well as proving to customers that you care about their opinion, following up helps reduce churn. McMillan says:
In a scenario where somebody gives us a 1 in the survey, we may reach out and get ranted at about how the product doesn't do any of the things they wanted. I’ll apologize and then maybe I can propose a solution, like a new beta product to test that may meet their needs better and they get the first three months free. If they end up not churning, it's because we were able to jump in and meet their needs.
Read comments carefully and reach out to customers, especially if they’re detractors and ready to jump ship at any given moment.
Most problems reported in NPS-surveys, especially with young products, are product-related, at least in the SaaS industry, as McMillan says. This means you need to:
McMillan mentions they have a scrum session with technical leads every single day. “We have to have this call to talk about the issues that are being raised, where we are with any issues that are being worked on and whether they’re resolved,” she said.
She also reiterates the importance of good relationships and processes between her team and engineering teams:
It's very important that customer success have a tight relationship and are in constant communication with technical or engineering leads to pass along any feedback and make sure things are done about that feedback. I’m logging issues like ‘something is broken’ or ‘we need this feature’ and then I want to see updates, so that everyone is transparent about what's going on and what's being done.
The tendency to focus on detractors is understandable, since they’re probably the ones that’ll affect your churn metrics. But, promoters give you a wealth of opportunity as well.
As entrepreneur and SEO expert Neil Patel mentions in one of his blogs, “Promoters love your product and don’t care who knows it.” You can ask them to spread the love or offer them the chance to take advantage of your best features, promotions, or products.
For example, you can ask promoters to:
What’s important here is to build good relationships with your promoters. Nowadays, people tend to be less loyal to brands than before, so if you don’t take care of your customers, they might eventually leave you. Be sure to engage them and give them back the value they’re giving you.
The unexpected takeaway is that, for all its benefits, NPS has limitations, and that’s why it needs to be handled with care. Despite its widespread use, it’s often not considered as important as revenue metrics or other KPIs. McMillan herself says: “In the customer experience space, when people are talking about what the most important [KPIs] to capture are, NPS doesn't usually even make the list.”
This isn’t to say you should abandon it completely. But, it’s just one of the customer experience trackers you can use, and you should always use it alongside other metrics.
So, you can set up your net promoter score surveys in a tool like Delighted, and then collect more data on customer satisfaction via tools like ChurnZero. At the end of the day, you need a selection of platforms in place to offer the best experiences in customer support and sales.