Net Promoter Score (NPS): Your Instrument of Growth
In this session, we’ll unpack everything you need to get started with using NPS for growth.
Net promoter score is a widely accepted metric to predict how likely your customers will recommend your brand to others.
Utkarsh: Hi Sathya, let’s talk about net promoter score – Google, Airbnb loves it! There’s a great hype around using net promoter score. So, let’s unpack the promoter score. Let’s get to the basics first.
Utkarsh: What’s net promoter score for you?
Satya: So, you can say that the NPS is a measure that helps the business understand how loyal the customer base is. So it doesn’t really go into the nitty-gritty of you know the specific product offerings or you know a single touchpoint for example. It just talks about the whole business in its entirety and it’s a measure of how attitude, whether they will be with you in the future it’s a strong indicator of that. Many businesses considered content considered to be a very important function of the business. Slack for example: So, I’m sure that most people that you speak to watch like they are very positive about it. So it’s got this quotient in its product trade that makes it very recommendable.
Satya: So, that is not something that they just think let’s do this so that’s a result of a long drawn you know obsession with improving the NPS to make the product in such a way that you know that their word of mouth marketing is like through the roof. So that’s the focus. That’s how important it can be.
Utkarsh: So, what you’re saying is that net promoter score is kind of pretty much tied up with loyalty. So, how do you calculate the net promoter score?
Satya: So it’s pretty simple so. Every customer has asked a single question.
Satya: So it’s along the lines of How likely they would recommend a product or service or whatever offering it is to a friend or a colleague or a family member or someone of some low profile you could say.
Satya: So, the responses received on a scale of zero to 10. It’s quite simple if the rating is between zero to a six it means that that customer is a detractor to a business.
Satya: Where, as if it is nine and then that person is a promoter the middle rating of 7 and 8 they’re considered to be you know neutral or the passives and they don’t really contribute towards the final calculation of the score. They are ignore
Satya: So, your Net Promoter Score is a number. So, you’ve got a percentage of customers in each of these buckets right h., So if you just take o ow the percentage of detractors from the percentage of promoters this es yr NPS
Satya: So, you have a scenario where the NPS number can range between minus hundred to plus hundred.
Satya: Minus hundred simply signifying that all of you are 100 percent of your customer base belongs to the detractors on which you don’t want to be in that position.
Satya: And ordinarily I would maybe it can be all the way good plus hundred where they know it means that 100 percent of your customers are promoters ideally where you want to be.
Utkarsh: Do things like people get a 100 percent score?
Satya: That I don’t think it’s really possible. So, some good like it’s all based on the industry though. So it depends on one industry to the other in terms of you know how loyal customers are. However, something between somebody in your 30s 40s and if you are really good maybe you can touch off 50. So that’s the usual range that I have seen.
Utkarsh: It is interesting that you mention about the rating scale because I recently come across very different forms of rating scales in terms of measuring experience.
Satya: Of course, there are so many of these rating skills. So for example at VWO, we use a CSAT. So again, you should look at the way it is implemented to understand what it is working towards improving. So the CSAT we do it at a point where you know we just resolved a customer query so you can see that’s just a single touchpoint of how our customer using VWO.
Satya: There are so many other things that they do. So, CSAT talks about that aspect, it talks about how you know satisfied by they are by that experience that touchpoint. That’s you know that level of support we gave them. So like I mentioned when and when you go down the granularity you go into more specific things. You have something similar as well you have the customer effort score.
Satya: So, that also again talks about you know the customer just gives you feedback on how much effort they needed to put in to do a specific thing again. It’s still talking about talks about a specific thing.
Satya: Overall, you have a customer you know that person is going to have a mix of satisfactory and unsatisfactory experience the NPS like I mentioned before it’s an overarching thing. So, these small things might add up to you know your eventual NPS score but NPS talks about the business perception as a whole. It doesn’t talk about specific things. It talks about what they think of your business.
Utkarsh: So, what I understand is that CSAT tells you about incidental things like say if I resolve a support ticket how well was the resolution, were you satisfy or not satisfied with the quality of support.
Utkarsh: Whereas, the customer’s effort score tells you about pretty much about an experience. Say I run an onboarding campaign on VWO customers and at the end of the campaign I ask them about how difficult or how easy it was to use VWO. So something like that so too. So now I truly understand how these different rating scales.
Utkarsh: So, if a business wants to get started in understanding the experience it’s offering to their customers, what’s the quality of that or to understand who are their promoters that they trust etc.
Utkarsh: So, what are the ways to get started for them?
Satya: I’d say it’s about doing it periodically and some businesses follow once in a six-month strategy. The other on a more annual strategy but I think it all boils down to your business as a whole. So you can look at a few things you can look at usage cycle that’s a very good indicator of how you can time your own. So let’s say let’s just pick VWO for example. So once we onboard a customer what you expect them one typical usage cycling for us would be they run a test experiment and then they get a result and then they deploy that variation and see results on the website.
Satya: So this is one iteration of usage that we want the typical customer to repeat over and over again. So once the completion of this you know one single cycle is completed perhaps that’s a good time to ask them like you’ve been through it once you’ve seen the highs and lows of what it can do. So how likely is it that you would recommend.
Satya: So that’s that usage cycle is a good place to start. Once they’re done experiencing the product. So the most important thing here is to not prematurely ask this question before they experience the whole thing together.
Utkarsh: Yeah, timing is key here.
Satya: Exactly. So you need an honest opinion of what they think they should have seen everything. And that’s a good way to go about you know starting it.
Satya: Beyond that you can keep it at a you know a six-month annual sort of cadence but a good practice would not be to actually do it all at once.
Satya: Let’s say when I’m managing six months once it doesn’t mean that on one day you just send the NPS to all of your customers and close it.
Utkarsh: The sampling is what you’re saying is critical.
Satya: So you have a choice. It’s better if you have a continuous monitoring of that system.
Satya: So you have a sample that the number of customers who you know you’re gonna go with you knows you. That doesn’t true you no longer. The whole thing and make sure that it fits up your periodicity of being a bit harder to.
Satya: So the advantage of doing it in this sort of continuous manner is that it lets you monitor trends a little better. Perhaps, you can use it as an important metric to see how it is affected by you know the other changes that you’re doing to your product. Maybe you had a new feature, maybe you’re conducting a test experiment. How are different personalization campaigns running?
Satya: Maybe you’re running a marketing campaign to bring in the quality you bring up more leads. Maybe you can assess the quality of the leads that companies come into working on for you based on how well you know. If if if you’re going to see a drop in the NPS, you’re going to be able to attribute it to a certain thing not exactly attributed literally but you get an idea of what could have gone wrong. So you can also use it as a measure if you go about this way.
Utkarsh: All right! And say, we ran the NPS and we start getting the feedback, So, how somebody like me, say if I want to get started and get cracking on the feedback. Right, What are the things I can do?
Satya: So at a basic level. So what the NPS gives you like I mentioned it gives you segregation of your customer base into three broad categories so you get a mix of your customers you get a broad idea of how good you are. How what percentage of your customers are actually promoters are gonna be there with you. Perhaps you can quantify that. Let’s say you have your lifetime value.
Satya: Let’s say you attach that see how much your promoters or what see how much your detractors are worth.
Utkarsh: Let’s take each one of those examples and try to understand how different feedback strategy, the feedback you’re getting in from each one of the cohorts and how you can be more actionable about it.
Satya: So as a product person, if you ask me how would it be helpful for me. I would most definitely you know use it in my prioritization of different items in my roadmap.
Satya: So are you I let’s say I follow up with all of my detractors on the one thing that they want in VWO. So with that with the frequency of occurrence of that specific item and you know the rating that the customer gave it would help me you know organize and prioritize my road map a little better. It could be a fact I’m not saying to be purely dependent on that but it would be a very important factor by which I would prioritize things in my roadmap, passives see passives as it is a very dichotomous sort of situation here.
Satya: You know they could be moving this man they could be moving that way. So the most important thing is you know to get in touch with them and try to you know get them alignment in the right way.
Satya: So that’s precisely what they’re supposed to do with the passive. You don’t let them go down the scale.
Utkarsh: This just reminds me of the recent experience which we had with Appcues. And as you know that we’re using appcues to run our onboarding experiences and improving product adoption for us.
Utkarsh: So, we recently got an NPR survey around appcues and I rated them eight out of 10. Which puts me, if I understand correctly, in the passive range right now.
Utkarsh: Now what happened was Immediately after, I got an automated e-mail asking that if I need to improve my rating by one point, what the Appcues team needs to do about it.
Utkarsh: So I gave them some recommendations about you know subjective feedback on the e-mail saying that you know we need more integration of things like you know we need Zapier integration to integrate with other tools, we need say Salesforce integration and what all new marketing stack we use on top of this.
Utkarsh: And you wouldn’t believe that immediately like in an in a day’s time. I got a reply from the customer success team of Appcues, where they told me that you know they already have these things within appcues, you know I was never able to recognize and there were few things which they were already working on.
Utkarsh: So, I think it helps me as passive in this range, as it keeps me aligned to the promoter range.
Satya: So, what they’ve exactly done to you here is them reinforce you positively they’ve made you look forward to something and then you see the point is they made you look in the right direction them to put a positive spin to that.
Satya: So, whenever they of them you know it’s like completing a loop you get back to you with that feature you’re gonna quickly be able to you know to express the satisfaction about that thing and perhaps you’re going to be a promoter in the future.
Satya: So that’s ideally how we’re supposed to treat your passives.
Utkarsh: Okay, let’s talk about the promoter range, what do you think that you know businesses or you as a product guy would do?
Satya: So the most important thing is as a business you’re supposed to grow with your customers you take that aspect of growth and with your promoters, you’re trying to figure out what exactly they’re looking for, above and beyond what you’re currently offering them so that you know you are able to get in direction of your business from the customers directly themselves.
Satya: And of course they are going to be you know a focal point of all of our upsell and you know cross-sell sort of campaigns that we have because that’s the segment that we’re definitely going to get a lot of success in. And of course, there’s a lot of other things you as a marketer can think of.
Utkarsh: About net promoter score and if I already have a segregated range of people who are my promoters, I think there are few things which we can do that them. You would want to integrate this data of NPS scores with CRM so that we have some level of engagement and understanding around each one of these customers. Then once we have that data in place – first thing is that you know the promoter and we can reach out to them to review us on review platforms like trust radius, Trustpilot and g2 crowd and all such places to mobilize these folks and to talk great things about the brand.
Utkarsh: The second thing is that you know if they’re already doing great with the platform I feel that they are the best people to write case-studies with, you can discuss their use cases share it with the world and help big businesses or how like you know even small business like leveraging your brand in terms of getting more value.
Utkarsh: And the third aspect which I feel like you know it would be great for me to work with the promoters is a referral program where you can incentivize these folks for promoting us. You can get these people to events with you, get video testimonials. They make you promote your brand in the sense that you know it feels like a family. So, these things which I feel like you know as a marketer you can leverage that tremendously.
Utkarsh: So let’s also discuss and I know that you know you look into a lot of businesses in terms of how different businesses use the Net Promoter Score. So what do you think how top businesses are using net promoter score to their advantage?
Satya: So on the top of my mind one of the customers that I recently looked at so they have implemented – It was a resource website for a specific health disorder.
Satya: So the target audience is typically everyone who is associated with that – health care in general and that you know disability in particular. So, the common profiles that you’re gonna see on the website should be you know a professional Healthcare specialist such as doctors and you also going to be seeing patients over there. Of course, this will be bundled in with all the caregivers. And then you’ve got medical students as well. So. what these people are cleverly done as they had followed up and would then be a question. Another question that. You know it’s simply what best describes you my health care professional, caregiver etc.
Utkarsh: More understanding around the persona, basically.
Satya: Exactly! So, what happens is you perhaps you look at the NPS of people who are of all the students you see where your content stands for.
Satya: From that angle and you kind of figure out for whom the content is actually working for, what sort of improvements you need to make in your content to be able to work. Let’s say for student – Students have rated the content a little low so you get an immediate idea from a student’s angle. This content is really not working out and I need to improve the quality from their perspective. So that’s what that was a very good implementation of something I saw recently.
Satya: And AirBnB like you mentioned, they do a lot of analysis on their NPS. So, what one interesting thing they did was they were able to you know pick up some trends and kind of predict some actions that typical customers would take.
Satya: And you know what they figured out that the NPS was you know a more accurate indicator of certain things than other business metrics they had this sort of feedback systems like you know their rating and you know their customer touchpoints based on that satisfaction and all of that.
Satya: More than that the NPS turned to be a more accurate representation of what they were able to predict and they actually did.
Satya: You know what, they ran an NPS on 6 hundred thousand customers! And out of that they just look at all the 10 scalers and they figured out that that is actually a 14 percent chance that they’re going to rebook another thing through AirBnB.
Satya: They also figured out that around 5 percent where the did promote AirBnB to a friend or relative. So, from that, you get an idea. Right. Like when I say that in business or indicator of future growth you also realize how powerful word of mouth marketing is. And this is the huge amount of people who are evangelizing your product for you, you see the amount of you know the cost saved in acquiring new customers. And like it’s always better to retain customers. We’ve been one that it’s a golden rule. So yeah. That’s what the NPS is completely represents.
Utkarsh: And that’s a good example. If you know that you know there’s a correlation with NPS and future action with the brand – it could either be rebooking of its own a bit in this case or a recommendation. I mean it’s a great value add to predict such things.
Satya: So the thing is, if you see the NPS score of your business going down a little bit, there’s going to be alarm bells ringing in every stage in the organization. Because it is a direct representation of your sustenance in the future how you’re going to grow in the future.
Satya: So, the more positive your NPS is the closer to 100 it is. It means that you’re going to retain a bunch of them in the future you’re going to be having those happy customers in the future who will be spreading your product for you. So, that’s the whole context.
Utkarsh: It’s great that you brought that up because my next question was going to be on those lines. When should I start taking the NPS seriously? What is the right moment – you have run an NPS as you said, you started getting responses. What is that time that you know you’d like you to hear that things are going to see it?
Satya: It actually doesn’t work that way so I get it like you’re trying to come to a point where NPS has an overall figure to make sense to you. That, of course, is an indicator of a lot of things it helps you monitor things situation better. But the point is every single response that comes to you that’s got its own story to say you’ve got to be addressing that customer individually because it’s all different it could all be extremely unique things that they come forward with and the whole point of feedback is you know you’re supposed to complete the loop you’re not. So when they’re giving you extremely high-quality qualitative feedback it’s so imperative that you you know complete the loop get in touch with the customer. Be honest with them see. Let me be honest with them in terms of you know whether you’re able to solve the issue that they’re probably having. If you’re able to do it you give them plausible timelines and as soon as you’re done let them know again. The point is to keep communicating with them because they’ve gone through the whole thing of giving you that feedback in the first place.
Satya: Right. So it’s not about when the NPS score makes sense on an overall level it’s about you know from the first response you’ve got to start an action.
Utkarsh: I mean one thing I follow up on – you started it to the different points to which I like great organization value points. One is that you know once you get subjective feedback you need to follow up on that. Second thing is that you need to be honest.
Utkarsh: So, my next question is – I’m sorry for being rude here with it. Say there’s some feedback around your product roadmap and there are few things which you are not prioritizing and the customer is asking for it, repeatedly. And that’s one reason that these customers are in the detractor or the passive range. So, what kind of communication will you send out? And it’s a tough ball.
Satya: Yeah, on one side you do have you know the business’s growth in mind but I don’t think that’s that so. You know it’s a way to go in terms of you know assuring them that you’re gonna be doing something like I mentioned detractors feedback is great for prioritizing things and trying to figure out what direction your business should grow. But absolutely at no point. Should you be dishonest with your customers.
Satya: If if if what they’re asking is definitely not part of your plan I think you should let them know they’re going to be moving away from you sooner rather than later but that’s not the point of you know having a sustainable business model, you need you just need to tell them that is not part of it. Perhaps, you can recommend something else for them to use as well.
Utkarsh: I mean, I know that it is very tough to recommend your competitors to your customers. But, I think I buy your point in terms of honesty because you know these are core business values and I would want to conclude the session on that that you know
Utkarsh: The three values which have come up across while we’re discussing peace and which is at an organization level – First is whatever you’re building – Make sure that your customer have a great experience so that these people are loyal to you.
Utkarsh: The second thing is you mentioned honesty say whatever the feedback is. Be honest in terms of you know communicating that thing to them. Whether you have it on your roadmap that you don’t have it if there are fixes around it just be honest about it like you are working on that or whatever.
Utkarsh: And the third thing you mentioned in our conversation repeatedly is the communication part. Every feedback matters! You have to follow-up even if there are only four or five responses on your NPS or if it’s too many like you mentioned about AirBnB ran it on 6 hundred thousand people which is great and following up on each one of them will what takes your brand forward and let’s conclude on that.
Utkarsh: Thank you, folks, for tuning in.
Utkarsh: To know more about how you can set up NPS surveys in VWO. We have a video in the description – you can check it out and learn how to set up NPS surveys and various other forms of surveys using VWO.
Utkarsh: Thank you Sathya,