Bill Macaitis, Slack’s CMO between 2014 and 2017, once said:
“I’m a huge believer in NPS (net promoter score). It provides a north star for everyone in the company to understand how well we’re doing and how many people are actively recommending us. It’s a great gold bar. We’re not satisfied if someone signs up and starts using Slack. We’re not satisfied if they become a customer. We’re not even satisfied if they renew. Our bar is “Are they going to recommend us?”
And we couldn’t agree more.
As a Customer or Product Success Manager, you need to know if your customers are happy with your product or service. It’s also extremely important to understand your customer’s opinions to improve and scale your product. The happier the customers, the higher their satisfaction, and the more likely they’ll recommend you, and here is where NPS comes into play.
Today, we’ll cover:
- What is NPS? What is an NPS survey?
- How to calculate NPS scores?
- What is a good NPS Response Rate?/NPS Response Rate benchmarks
- NPS survey Best Practices
- Tips for Converting Passive Users into Promoters
- NPS Survey Best Practices
Let’s dive in and find out all about NPS Survey Best Practices!
What is NPS? What is an NPS Survey?
NPS (Net Promoter Score) is used to measure customer loyalty and satisfaction based on how customers experience your product and predict your company’s growth.
Its main goal is to ask customers how likely they are to recommend your brand, product, or service to someone else. For example, NPS surveys ask questions such as “How likely are you to recommend our product or service to a friend or colleague, on a scale of 0-10?”, “What is the primary reason for your score?” or “What do you like the most about (your company name)?”.
Your promoters, the people who will spread the word about your product, will give you a nine or a ten. Passive consumers who enjoy your product but won’t recommend it will provide you with a seven or eight; detractors will give you somewhere between a zero and a six.
This information will help you improve your product by aiming to score. Moreover, you can build customer loyalty and create brand advocates through this. Let’s explore how to calculate it!
Why Is NPS Important?
NPS can be used as a predictor of business success and growth. Asking customers about their probability of recommending your product can give you a lot of insights from the product itself to your onboarding and customer service. As you can imagine, satisfied customers will more likely to become promoters of your product.
Think again if you think this feels a little like a Yelp review. According to the Local Consumer Review Survey 2022, 88% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts. Furthermore, 91% of B2B buyers are influenced by word-of-mouth when making their buying decision.
How to calculate NPS Scores?
To calculate your NPS score, you must subtract your detractors from your promoters. Let’s better illustrate this by looking at the following example; Imagine 60% of your respondents were promoters, 25% were passives, and 15% were detractors. To then calculate your NPS score, you would subtract 15 from 60, giving you a score of 45.
NPS =% promoters -% detractors
NPS is expressed as a number from -100 to 100. The score will be negative when there are more detractors than promoters, and positive if you have more promoters than detractors. The NPS result can indicate the following:
- A score between -100 and 0: There needs to be some changes made to improve your customers’ experience.
- A score between 0 and 30: Although better, there is still room for improvement.
- A score between 30 and 70: This means that you are doing great, but you can aim higher.
- A score of 70 or more: This would be what any company aims for as it indicates that your users have an amazing experience. Keep up the good work!
The goal is to reduce detractors while increasing promoters to improve this score, and that’s it. Easy-peasy, right? But how do you know what is a good NPS response rate? Let’s jump into the next section!
What is a good NPS Response Rate?
One of the main questions asked when talking about NPS is, “What is a good NPS response rate for the SaaS industry?”. However, first, we need to understand how to calculate it. Let’s have a look at the formula:
Total Completed Surveys / Total # Surveys Sent * 100
An NPS survey response rate is the percentage of users that have answered the survey. According to Retently, the response rate of NPS surveys is much higher than the response rate of typical email campaigns, and a good NPS benchmark for the SaaS industry differs between 30-40%. Despite this, it’s crucial to note that every sector has different benchmarks. Your NPS response rate may seem extremely low when it’s actually in the higher range for your industry.
NPS survey Best Practices
The best way to ensure you are getting the most out of your NPS surveys is to apply some best practices. Keep reading to discover the most important ones:
The best tip is just to do it
Although you might not have a budget or don’t know where to start, as a well-known sports brand would suggest, you just have to do it. NPS surveys will give you an overall idea of what your customers think about your company. And consequently, you’ll be able to apply their feedback and improve your product. What are you waiting for? Just do it!
While NPS surveys are straightforward to answer and not very intrusive, you want to avoid bugging your customers with surveys every other week. When establishing a recurrence for your NPS, it’s essential to match it with your roadmap.
If you have yet to make any significant changes to your product, you should run the survey every 60-90 days to obtain reliable measurements. If updates are happening, or new features or redesigns are launching soon, run your survey at least five days after the launch to analyze its impact on your customers’ satisfaction.
Take in the feedback and close the loop
Always close the loop! A survey’s feedback loop is crucial, and it’s even more important in NPS surveys. Respond to negative or positive feedback, solve your users’ problems, and try to convert detractors to promoters. There is no point in doing this exercise if you don’t close the feedback loop.
Think about it, when a company considers what you’re saying on an NPS survey, applies it, and responds proactively your customer satisfaction increases. As easy as this.
Build an in-app NPS survey
Did you know that NPS surveys have a higher response rate after a user did a certain transaction? Send NPS surveys to your customers after the transaction is complete. This is a perfect opportunity for your business to gauge how your customers feel after taking a specific action involving your brand.
Ask open-ended questions
Have you noticed that open-ended questions let the recipient express their true feelings? In response to the customer’s score, ask open-ended follow-up questions. This will allow you to receive more honest feedback. For example, if their score is really low, you can answer, “What can we do to improve this score?” or, if the score is high, “What do you think is our best feature?”. Look at the following example to better understand what we’re saying:
Here are more examples of engaging follow-up questions:
- What is the most important reason for your score?
- What could we have done better?
- Why did you give us that score?
- What would you do differently?
- What would you highlight from your experience?
- Would you mind telling us why you feel this way?
The answers to all these questions will give you an overall idea of what’s happening in your business and how your users feel while using your product or service.
Share NPS feedback with your entire team
Information is power! When all the data from the NPS survey is collected, share it with your entire team. As a result, every department of your business can focus on improving various aspects of your business using real-time data.
Measure your NPS over time
Tracking your NPS over time for the different segments of customers can give you tons of insights into which customers are more likely to become evangelists of your brand; this will also help your marketing and sales team understand who they should consider as AAA prospects.
Don’t forget it’s extremely important to understand the impact of your strategy. Analyzing your NPS over time can help you determine how successful your efforts in terms of product improvements and updates have been. And also, understand if your methods of converting detractors and passive users into promoters have paid off.
Tips for Converting Passive Users into Promoters
Every SaaS company wants to convert its passive users into promoters but to do so; you need to engage with those users to improve their experience and their NPS score. We’ve collected five tips that will help you!
- Use follow-up questions to get the most out of your feedback: Follow-up questions serve as a method to clarify or elicit further information. Use these questions to deepen your customer’s answers and get the most out of your NPS surveys.
- Engage with detractors to improve their experience and their NPS score: Put effort into improving the customer experiences of the detractors to reduce churn and increase customer loyalty. To do so, try to quickly solve their NPS survey questions and offer proactive customer support.
- Listen to the feedback and improve: Always listen to what the customer says. Through it, you’ll be able to understand a lot about your company and improve your product based on actual data.
- Establish cadences of behavioral emails for those users who have given you less than a 9 or 10 NPS score: Depending on how close to being a promoter they are, the sequences should be different–passives with a score of 7 or 8 won’t need as much attention as those who have a score of less than a 5.
- Improve overall customer engagement by using in-app messaging and product flows: Another great tip is to educate your users with in-app messages so they will see more value in your product and reach their next milestone. By helping them reach every possible “aha” moment, you will improve their customer experience with your product and, ideally, convert them into brand advocates.
NPS Survey Best Practices
NPS surveys are a fantastic source of information for your SaaS company, and despite other surveys, designing and conducting an NPSs don’t require a lengthy planning process. Through them, you can figure out what’s happening in your business and take action. The most successful NPS survey best practices are to take in feedback and close the loop, ask open-ended questions, share NPS feedback with your team, measure your NPS over time, establish a recurrence, and more. Start designing your NPS surveys today and discover everything and more your customers think about your product!
Interested in learning more? Book a demo with FROGED today to learn how to use behavioral emails and product flows to improve your customer experience and get higher NPS scores or check our last blog post, Behavioral emails: Provide users with a unique experience.