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Net Promoter Score (NPS) has been a long standing metric that many organizations rely on to determine the health of their customer base. Before we examine a few challenges that customer success teams should keep in mind, let’s first start with the definition of NPS:
“(NPS) is a management tool that can be used to gauge the loyalty of a firm's customer relationships. It serves as an alternative to traditional customer satisfaction research and claims to be correlated with revenue growth.”
Overall customer sentiment, which includes NPS, has everything to do with how a customer feels about your product or service and even how they work with their CSM. If customer sentiment is left out of the equation, then your organization may be neglecting some of the most telling customer sentiment signs available.
While the NPS score is a very valuable asset that all organizations—regardless of their size or industry—should measure and keep track of, it’s certainly not without its flaws and considerations. According to OpenView, the NPS score doesn’t answer the ultimate “Why” question, and the score may also only give a partial view of how customers actually feel at a certain point in time.
Here are 4 things customer success teams should keep in mind as it pertains to NPS:
The first consideration of the NPS score is the response rate. Like most surveys, the data is only as good as the quality and quantity of the contents. For instance, if your company has 100 customers and only 10 provide their true sentiment, then you are only accounting for 10% of customers. In addition, keep in mind that it’s likely customers that are either very happy or very unhappy are participating, potentially causing skewed data that only takes into consideration the extremes. While some companies may find creative ways to ensure the majority of their customers respond—like making it part of the annual review or enticing customers to participate by offering an incentive—the majority will only get a small snapshot into their customer base.
How to Navigate: Tie the NPS score to an important event defined in your customer journey to help attract as many responses as necessary. Also make sure to remind customers at least twice and provide a timeline for completion.
Another consideration for the NPS score is the individual that responds. It’s crucial to capture specific data about who actually responded so you can later segment the data and attempt to understand the answer to the “Why”, which the OpenView article referenced above stresses. Without understanding if the score is from a user, an influencer, a decision maker or an executive in a customer account, it’s virtually impossible to understand what influenced their score. For instance, an end user will likely be more technical and may provide a lower score if they have had issues with the product in the past.
A decision maker may provide a higher score if the product has positively impacted their bottom line. And an executive may be out of tune of the daily operations of the product, but may have had a positive experience at C-level conference hosted by your company. All of these factors can play a significant role in how likely (or unlikely) the customer is to promote your product and company.
How to Navigate: Make sure to collect NPS data from segmented and defined users so you know what factors may be influencing their score such as relationships, product, or ROI. When NPS scores have been calculated, be sure to segment the data by user type so your team can create an action plan accordingly, as explained in the next section.
Customers who respond to an NPS survey or questionnaire will want to know that their feedback will be acted upon. Any and all feedback provided from customers should transpire into a clear actionable plan that involves members across the entire company. If a customer indicates they are happy with a product but would like to see improvements in a certain area, but then no action transpires, that customer’s score may actually drop as time goes on. Alternatively, a customer may lose confidence in the product or company entirely and may disengage from providing their feedback—which is an issue that also correlates with our first point about low response rates.
How to Navigate: Make sure to create an action plan immediately after NPS scores have been calculated and feedback have been gathered. Communicate changes in a positive light by sharing with customers what will change, and attach a timeline to the expected results if possible.
Lastly, the delivery of the NPS can impact its effectiveness. There are many ways in which to solicit customer feedback as it pertains to an NPS:
Each company must choose the best delivery method to collect its NPS. Customer success leaders should be cognizant, however, of creating a burdensome or annoying experience for customers that may impact their score or may impact whether or not they actually participate. For instance, in-app NPS questionnaires can get in the way of a customer conducting important business or completing a task.
How to Navigate: Customer success leaders should consider the makeup of their customer base and should choose the best method of delivery accordingly. For some users, the best method may be an automated sequence at the time of renewal. For executives, it may be a personal phone call from a company leader. Companies must evaluate the best options that will not interrupt business processes or create burdensome experiences.
Check out our resources below for more customer success best practices and insights for how your organization can build strong customer relationships:
Learn more about how ClientSuccess can help your company develop a strong customer success methodology and strategy with easy-to-use customer success software by requesting a 30-minute demo.