July 15, 2021

    What an NPS Survey Uncovers — and What it Misses

    NPS score

    The survey question asked around the world: On a scale from 0 to 10, how likely are you to recommend our company to a friend or colleague? 

    As the guiding concept of every net promoter score (NPS) survey ever conducted, this question can help capture customer satisfaction. It can also give you an idea of where your company stands.

    However, the NPS is only part of the picture. Make sure you’re combining this metric with other data sources to get a better understanding of customer health.

    First, the basics …

    Understanding your NPS results

    NPS ranks customers from 0-10 into:

    • Detractors (0-6)
    • Passives (7-8)
    • Promoters (9-10)

    An NPS score ranges from -100 to 100. At negative 100, every single person is a detractor.  At 0, everyone is a passive. And so on. 

    It’s calculated taking the detractor-passive-promoter rankings and putting them into the following formula:

    % Promoter – % Detractor = NPS

    What’s an ideal NPS score?

    For SaaS companies, an NPS score of about 30 is the standard industry average cited by Hubspot.

    So, what’s your NPS score?

    • Anything above 1 is technically considered “good,” as a negative score indicates your business has more detractors than promoters.
    • If you’re under 0, you’ll likely want to address the reasons why and come up with strategies to improve your score.
    • Hitting a score between 70 and 100 is a highly aspirational goal.

    Screen-Shot-2021-07-15-at-11.47.40-AM-1-293x300When the Harvard Business Review first wrote about the concept in 2003, the publication considered it to be an effective way to understand organizations’ long-term profitability.

    In a perfect world, every single customer would fall into the higher end of the NPS spectrum. 

    In reality — as a customer success manager — you know that’s not how it works. 

    It’s likely that, as of now, the majority of your user base falls into the ultimate gray area — the passives. These customers responded with either a 7 or 8, as they’re satisfied with your services … for the time being. If a competitor’s ad catches their attention, however, it’s not unlikely that they’d be willing to make a switch.

    So, how can you …

    • Improve the customer experience?
    • Bridge the gap between passives and promoters?
    • Convert detractors? 

    Read on …

    Generating more NPS responses

    Get-More-NPS-Responses-Image-300x197For your NPS score to be valuable, not only should it be used alongside other metrics, it should also be taken from a decent sample size.

    A survey by CustomerThink, a global community of business leaders, found that companies that only use one channel to conduct NPS surveys reported an average response rate of 11% to 20%.  

    However, that number more than doubled once companies used two or more channels: 31% to 50%.

    NPS campaigns conducted via email can easily miss the mark. Your survey form can quickly end up at the bottom of someone’s inbox, or even go straight to the spam folder. So, how can you cut through the noise?

    Ask in the app!

    In-app NPS surveys

    With this functionality, you’ll:

    1. Reach customers when you know they’ll see your engagement.
    2. Receive survey answers quicker. 
    3. Push surveys to specific user segments for more accurate insight.

    Be sure to consider what survey template you’re using. Also, think about whether you need to ask a follow-up question for further insight.

    You should run your NPS campaign at a consistent interval for benchmarking. We recommend quarterly. But every company is different. It’s important to note that asking more often may reduce the likelihood of users responding, however.

    Once you’re satisfied with your response rate, it’s time to pair your NPS results with other success metrics.

    Why use other competitive benchmarks?

    Christina Stahlkopf, an HBR contributor and expert in customer research and analytics, explained how her company views NPS scores, and what that means for your team:

    “We’ve come to believe that NPS offers mostly broad strokes, akin to a compass pointing companies in the right direction. This is not to say we think it’s irrelevant. A compass is still a helpful tool. But sometimes, you need a more-detailed topographical map to navigate a rough or uncertain landscape. Sometimes, what the compass indicates is the best direction to follow actually isn’t once you take into account the on-the-ground terrain.”

    Increasingly, companies are realizing it’s incredibly difficult to understand the customer experience based solely on a single question. That’s because an NPS score makes several incorrect assumptions:

      • Intention equals action: Stahlkopf cites a survey demonstrating that only half of the customers who express an intention to recommend companies actually do. Just because someone says they’d promote your brand doesn’t mean they will.
      • Humans make sense: In an NPS survey, you’re either a detractor or a promoter since passives don’t count. However, our behavior as people doesn’t always follow straightforward logic. An overly simplified approach neglects the likelihood that someone enjoys a product but also has criticisms of it.
      • Misclassification: Stahlkopf’s team found that detractors were seven times more likely to have either recommended a brand or said nothing at all than to have disparaged it. This discrepancy is linked to how large the score range for detractors is.

    Additional customer metrics

    Screen-Shot-2020-12-21-at-1.41.51-PM-300x184OK, NPS surveys have some flaws. How can you overcome them to better understand your users? 

    You have to find that sweet spot between the simplicity of an NPS score and the usefulness of measured customer behavior — health scores, product analytics and more. 

    Once you’ve successfully segmented your users as promoters, detractors or passives, it’s time to figure out which factors drove them into that group.

    It’s also time to figure out the behaviors associated with each.

    Some common customer health indicators include:

    • Time to first value (TTFV): How long does it take a new customer to realize value from your product?
    • Frequency: How often is a customer logging in? Which features are they using the most? 
    • Engagement: Is a customer interacting with in-app notifications, email campaigns or other forms of communication from your team?
    • Open tickets: If you have too many, it could be a sign of a bad product or poor response time.

    Understanding how a success metric like TTFV, for example, relates to your NPS score will allow you to identify exactly where the problem in your customer experience is. This will also give your team another baseline to measure and determine whether a strategy adjustment is movement in a positive direction, or whether you need to go back to the drawing board. 

    There are also sentiment collection methods other than the NPS:

    • Pulse (CSM opinion)
    • Microsurveys
    • Custom surveys

    Bottom line: NPS is a valuable tool. But don’t put all your analysis in one basket.

    Putting your NPS data into action

    If your NPS score is the compass that lets you know you’ve gone south when you intended to go north, your customer success strategy is the map that helps you correct the course.

    You should have specific outreach processes in place when it comes to each NPS segment.

    Promoters

    One common misconception is that because promoters are satisfied, your team won’t need to interact with them as much. This couldn’t be further from the truth.

    Ensure you have a VOC program in place to collect open-ended customer feedback. Whether it’s a glitch they’ve run into or a recommendation for a future feature, it’s important to give these customers a means to communicate with you. Otherwise, you may push them straight into the realm of detractors.

    Passives

    Just because passives don’t directly contribute to your NPS score doesn’t mean they’re not important. You’ll need to directly engage your passive users, whether it’s more frequent check-ins with their point-of-contact or specific campaigns highlighting features within your product. With the right nudge, passives can loyal customers. 

    Detractors

    Take a deep breath and remember your detractors aren’t automatically going to churn. Understanding what creates unhappy customers and intervening as soon as an account demonstrates these indicators will be critical to saving the relationship. Plus, this group will give you clear insight into what isn’t working within your existing customer experience. Make sure you have a health score program in place to give your customer success team a more objective metric to work around.

    A customized outreach program for each NPS segment will allow you to achieve that all-important goal of personalization at scale. No customer wants to receive communications that don’t reflect their current context, so be sure to consider the unique needs and interests of your promoters, passives and detractors for each campaign.

    Enhancing the customer experience

    Your NPS score is just one piece of the customer journey.

    By pairing it with measured customer behaviors, you’ll get a fuller understanding of your users and how to offer them even more value.

    Want a holistic solution for understanding customers — including integrated NPS engagement? Learn more about UserIQ.

    UserIQ team

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