Companies will go to great lengths to find out what customers think about their business. From expensive surveys to focus groups and everything in-between, customer information traditionally isn’t obtained overnight or on a shoestring budget.
But, with this information now being so vital to customer success teams, a standardized method of obtaining real information at an affordable price has emerged. Known as the Net Promoter Score (NPS) it asks customers one simple question…
On a scale of 0-10, how likely is it that you would recommend my brand/product/service to a friend or colleague?
To calculate your NPS score, you subtract the percentage of promoters from detractors. The "passives" are considered neutral and do not affect your NPS score. For example, if out of 100 NPS responses, 38 were promoters, 29 were passives, and 33 were detractors, then the equation would be… 38% - 33% = 5%. Thus, your overall NPS score is 5. Not a great score!
Now that the math and explanation is out of the way, what exactly is the relationship between customer success and NPS? Here are the key details…
NPS is a direct measurement of honest customer success – One of the key selling points of the NPS score is its lack of personal influence. A respondent isn’t coaxed into answering a specific way based on how a person asks the question. Your NPS score is a great starting point to understand in a simplistic way what your customers think about your company and entire operation. To facilitate NPS scores, companies are leveraging customer success software so that the score and all customer conversations are in a single location.
Utilize NPS to follow up for more specific information – A customer success team can look at NPS scores and immediately see who should be the focus of their efforts in reaching out to reduce net churn. If they gave your company a high score, float the idea of a testimonial out there to help attract new customers. If the score was low, have a retention specialist follow up and see what can be done to resolve their concerns and subsequently boost their score in the future.
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NPS can be a key planning metric for customer success leaders – Three things that are great about NPS results is they are easy to interpret, easy to measure, and they can change over time. With this said, it’s important for a customer success team to leverage this data for developing future plans. If your overall NPS score is low, it may be time to be aggressive to raise it in the short-term by focusing on projects that will have a more immediate impact. If the score is already great, understand what you’re doing right and ensure you can maintain the high bar you’ve set with customers.
To summarize, the relationship between customer success and the Net Promoter Score (NPS) continues to evolve. Because NPS scores can (and do) change, the metric is a great way to benchmark yourself on both a customer level and on a grander scale with your entire business efforts.
NPS as a whole continues to increase in popularity and credibility, so if you haven’t already, make sure you get started with the tracking process sooner than later. Start with a small sample of customers and expand from there into a rolling program where scores from every customer arrive on a recurring basis (quarterly, bi-annual, or annual). From here, you’ll have a valuable information point to truly drive customer success decisions and see your business prosper in the future!