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NPS is a key growth metric, and many of the world’s best companies use it to measure customer loyalty. But many companies, whether big or small, are doing NPS wrong.
Even after running NPS surveys for years, there are a lot of traps that companies repeatedly fall into! As you read on about NPS, you wonder how could anything go wrong. After all, it’s a matter of asking one or two simple questions!
But let’s face it – many companies, whether big or small, are doing NPS wrong. Asking too soon or too late is just one of the common mistakes.
NPS surveys are only as useful as you make them! With 6 years of experience in helping companies run surveys, we’ve seen the same mistakes time and time again. Now we want to help you avoid the rookie mistakes and obvious pitfalls!
Customer Education Specialist
The biggest NPS mistakes and how to avoid them!
Nicholas: Hi guys, Nicholas here from Survicate. I’m a Customer Education specialist. And seeing as we’ll be talking about NPS today, there’s a special guest with us today!
Ondrej: Hi guys, I’m Ondrej – the cofounder and CEO at SatisMeter.
We are providing an automated in-app NPS survey tool. Most of our customers use the NPS survey to understand their users and improve their customer retention. Happy to be here today!
N: Just to give you a little bit of background, Survicate and SatisMeter both provide tools for gathering customer feedback. And we’ve seen companies, big & small, make the same common NPS mistakes over and over again.
O: Even though NPS is a well known and well tested methodology, we still see similar mistakes and traps that companies repeatedly fall into. That’s why we want to help you avoid the rookie mistakes and obvious pitfalls. Done right, NPS can be extremely useful in your growth efforts.
So Nicholas, what’s the main agenda of the webinar?
N: Sure, so here’s what we’ll go over today:
1. NPS in general, the ideal NPS survey – what’s NPS, what purpose it serves, what it hopes to achieve and what implications it has for your company, what’s a perfectly designed NPS campaign
2. Mistake 1 – wrong cadence, asking at the wrong time, wrong customer base – we’ll discuss how often you should run NPS surveys, when’s the best time to send them out and who you should target
3. Mistake 2 – being a score chaser, not genuinely looking to improve your product / service – we’ll talk about how trying to get the best score possible is actually detrimental to your business and can be counterproductive
4. Mistake 3 – focusing too much on detractors, giving too little attention to promoters – you should engage with detractors and promoters in equal measure, they can help your business achieve different objectives, and there are different follow-up actions for the two, but both can be beneficial to your business
5. Mistake 4 – low response rate – we’ll discuss all mistakes that contribute to a low response rate as well as how to improve it and which channels work best
6. Mistake 5 – not following up, not making NPS a company-wide effort – we’ll show you why NPS should be an ongoing process and you should have a follow-up plan in place in advance
7. LIVE QA session
N: Let’s get started, then!
NPS in general, an ideal NPS survey
N: When you first read about NPS, you might wonder: how can anything possibly go wrong? After all, it’s a matter of asking two simple questions.
O: That’s right, yet some companies are doing it wrong in all different ways. And there are many myths surrounding NPS – some people even object to NPS as a metric and dismiss it as useless, irrelevant. And, to an extent, they’re right. Because NPS surveys are only as useful as you make them.
N: If not deployed correctly or leveraged properly, they indeed – as the critics of NPS tend to say – will have little impact on your business. Ondrej so what are some other myths around NPS that we don’t agree with?
O: Some people say NPS is not predictive. While it is true that in some industries under certain very specific conditions, NPS might not predict customer loyalty, other research reveals that NPS is a fantastic predictor of repeat sales, referrals, revenue and growth. And this is not where the benefits end!
N: Other common myths are that NPS score is not useful or quite the opposite, that’s it’s the only metric you should use. Both camps are wrong. Of course, if you use NPS as a vanity number and don’t act upon feedback properly, NPS surveys won’t be too useful. If deployed and used correctly however, NPS can foster customer-centricity and drive business growth, it can also be a fantastic diagnostic tool for improving CX and give rise to deeper customer research.
NPS is a single data point and it won’t tell you everything you need to know. You should use NPS in combination with CES and CSAT surveys. We’ve discussed that in one of our previous webinars, so you can watch it later if you’re interested, I’ll be sending the link.
N: Ondrej, so what’s a perfectly designed NPS survey?
O: It’s two simple questions, really:
Q1: On a scale from 0 to 10, how likely are you to recommend our company to a friend or colleague?
Q2: What’s the most important reason for your score?
You can deviate from that rule, as different follow-up questions depending on whether someone’s a promoter, passive or detractor, but this is the template we’ve known to work best.
N: NPS is a valuable metric because it takes into account all experiences and interactions a customer has had with your brand, that’s why it’s called a brand or relationship metric.
N: Adding a follow-up question will encourage honest feedback that will help your company grow across all teams.
O: I’d say the most important rules of thumb for sending NPS surveys are as follows:
a) don’t overcomplicate it, use these two questions and a thank you message only, with each added question the chance of the user competing the survey decreases dramatically
b) make your NPS surveys mobile-friendly, as most people will be responding on a mobile. Use thumb-friendly buttons (easy with Survicate or SatisMater – we got you covered).
c) decide who and when gets the survey, run NPS surveys in regular time intervals, for example quarterly, don’t send your NPS survey to your customer base at once
Mistake 1 – wrong cadence, asking at the wrong time, wrong customer base
N: Right, it looks like we’re delving into details now, so let’s discuss the first common NPS mistake and how to avoid it.
O: NPS is an art of asking the right people at the right time the right question. It’s important to get the timing right, otherwise the results will be skewed or inadequate.
N: You need to give the customer enough time to use your service, product or service to form an opinion about it. If you send an NPS survey right after purchase, you won’t measure brand loyalty. You’ll measure how frictionless and easy your shopping cart process is.
For ecommerce, we’d say it’s important to give people two weeks after the purchased item has been delivered. For SaS/app/service, you usually should be sending the first NPS survey after 30 days.
O: Yes, it’s a good time frame before engaging. At the same time, you don’t want to send out the survey too late, either. The experience of using your product/service needs to be still fresh in the memory of your customers. NPS is a relationship metric, it’s rarely interaction-based. This means that when responding, customers are prompted to recall all their experiences with your brand, not just the most recent one.
That’s why it’s essential to send the survey when it makes sense from the customer’s perspective. So they evaluate your company as a whole, not based on just one aspect.
Nicholas, what are some other caveats?
N: Some companies are tempted to send an NPS survey to all their customers at once, because they have rarely or never collected feedback, so they figured they’d make up for lost time. I’d say don’t do that. Your results will be vague and unctionable, and the amount of feedback unmanageable. When you add features or functionalities, it takes some time before they affect your score.
O: For recurring businesses, it’s good practice to measure NPS on a quarterly basis and see how the score changes over time. Measuring NPS on an annual basis is not enough in the fast-paced world of today. Suppose each customer gets the survey after one month since purchase and then every three months. You’ll be able to track NPS in a more meaningful and holistic way, you’ll have a continuous process in place and more time to act on feedback. Sending NPS surveys in batches will let you manage the process more effectively and follow up with each customer individually. 3 months is enough time in between surveys, your customers won’t be angry at receiving too many surveys so the results will be reliable. It’s a win-win.
Mistake 2 – being a score chaser, not genuinely looking to improve your product / service
N: NPS is more about driving growth by building genuine, long-lasting relationships with your customers than about the score itself. Make sure you follow up with your customers and leave no piece of feedback unattended. Ensure you know what’s causing the score to increase and decrease. Each team should have easy access to NPS responses and make improvements accordingly. If you do all that, the rest – a high NPS score score will follow naturally.
O: You should deploy NPS surveys with one objective in mind – improving your product or service. And it should be a team effort. I hear some companies even use NPS as a target to reach and offer employee compensation based on that. This is wrong. NPS is not just another meaningless statistic. It’s a system in its own right, a source of powerful actionable insights. That’s why you should pay more attention to follow-up responses than your overall score. Don’t use NPS as a vanity metric.
Mistake 3 – focusing too much on detractors, giving too little attention to promoters
N: Companies tend to focus on detractors because they think that an unhappy customer can do real damage. They can leave negative reviews and tell everyone about their bad experience on social media. And this is true. However, in the same way that detractors can hurt your business if you don’t engage with them properly, promoters can help you grow your business immensely.
O: That’s why you should spend as much time engaging with promoters as you do following up with detractors and trying to turn them into promoters.
There are obviously different strategies for dealing with promoters & detractors and there’s a different award in each case.
N: Promoters are your most loyal fans and they’re ready to tell others about your business. They just might need a little encouragement. There are so many ways you can capitalize on the positive feedback. You can get your promoters to leave a positive review, write up a testimonial, participate in a case study or product research, use their enthusiastic quote in your social media. You can also use additional incentives such as an Amazon discount code.
Done right, you’ll improve your word-of-mouth marketing, obtain more positive reviews and recommendations, increase customer loyalty. These things mean more repurchases and more money.
O: When it comes to detractors and negative feedback – if a customer points out an area of improvement, make sure to pass it on to your Product/any other team.
Have a process for how you handle such feedback. If a customer is looking for a feature you haven’t yet introduced, but would be valuable, update the customer on the progress. They’ll feel taken care of. They’ll feel you’re genuinely listening to their feedback. Let the customer know what you’ve already done to remedy the situation. If the feedback was urgent, get back in touch with the customer right away. If not, then hold off replying for a day or two.
N: a) Address the customer by their name, b) Apologize to the customer, c) Sympathize with the customer – be compassionate, empathetic, d) State you’re fixing the issue. e) Offer compensation (this goes for high-risk issues. There’s nothing worse than a useful piece of feedback that goes unheard.
N: Getting an NPS score is just where it begins. A whole lot more is done after you’ve received it. You need to show your customers what you’ve learned last time and what you’re planning on doing. We’ve hosted a webinar on strategies for dealing with promoters and capitalizing on their positive feedback.
Mistake 4 – low response rate
O: If you deploy the NPS survey correctly, you can achieve a response rate of 45% or even higher. After all, it consists of just two quick questions. There are many factors that impact the response rate. Here are some of the rookie errors that could negatively affect your response rate and how to avoid them.
N: Don’t put NPS into a larger survey or communication
NPS surveys are engaging because they’re quick & easy to answer. The high response rate is caused by the fact that NPS looks like a survey that can be answered in a couple of seconds. Many companies make the mistake of nesting NPS into a larger survey. With each additional question, the chances of someone abandoning the survey increase by 50%.
Our piece of advice is to keep it simple, don’t ask too many questions. Make sure your customers receive a dedicated email with the NPS survey and it’s not nested into a larger piece of communication or a larger survey.
O: When you try to ask too many questions, it really puts off your customers. Instead of building a genuine relationship with them, you’re undermining their trust. Stick with the old good 2-question NPS. And here’s how survey distribution channel affects the response rate:
N: According to our research, email is still king with surveys sent via email noting the highest average response rate. Email is still considered the most effective communication channel. On average we check our inboxes 15 times a day, and this increases the probability of answering a survey.
O: Embedding the first survey question directly an email has a positive effect on the average response rate as people can respond straight from the email and return to it whenever they want to and when they have time – so there’s no pressure whatsoever.
N: Ondrej, but does this mean you should never use in-app NPS surveys?
O: In-app NPS surveys can be seen as interrupting the customer’s workflow and disrupting them during a task, so they might have a high abandonment rate and not be so reliable. Even if you customize them, they don’t feel as personal as email, we’ve known email to encourage more honest responses when done right.
N: Right, and there’s one more downside to using a widget NPS survey on your website or an in-app NPS survey inside your application. The customer sentiment might be influenced by the action they’re currently in the middle of in your application or on your website. Rather than measuring the sentiment of the overall brand and brand loyalty, you would be measuring their satisfaction at a specific interaction point or workflow, which is not what you want. Let me show it to you:
Ondrej, what else should you bear in mind?
O: Always make sure that the data in your CRM is up to date and that you have the correct email addresses for your contacts when sending out NPS surveys.
N: Also, even as much as 50% of people might be responding to your survey on a mobile. Ensure your survey has responsive design and is mobile-friendly & frictionless. Each button should be readily visible.
Ondrej, I guess this brings us to the last type of errors we’ve wanted to discuss today.
Mistake 5 – not following up, not making NPS a company-wide effort
O: NPS is never about numbers. It’s about forging a personal relationship with your customers and trying to build customer loyalty. Before sending an NPS campaign, you should have a decent follow-up plan in place for how to respond to each response.
N: With Survicate or SatisMeter, you have the right tools and resources to personalize each response with the customer’s name and email address. You’ll be able to tell you who gave you each score, and refer to whatever feedback the customer has left. You should state what changes you’ve already made, and are planning on implementing. Your customers are devoting their time to provide feedback, the least you can do is to reply to them.
O: You should have a template ready for each possible response, and then personalize it accordingly. Finding the drivers behind the score is what provides the insights to make improvements.
N: Right, there’s this quote from a CX leader, Bruce Temkni, that I love: “Instead of obsessing about the specific metric being used, companies need to obsess about the system they put in place to make changes based on what they learn from using the metric.”
O: It’s essential to plan the follow-through in advance, as this will save you a lot of trouble and work along the way and let you make the most of your NPS campaign.
N: And you can do so by integrating NPS scores with your CRM so you can refer to them later and learning from what you’ve learned last time.
O: Some companies make the mistake of keeping NPS scores only to the NPS team. That’s not right. Your company should be aligned around NPS and it should be a company-wide initiative. Of course, it’s good to have just one person responsible for sending out the surveys and handling the process.
N: Yes, but it’s your goal as a company to be more customer-focused and customer-centric. So each team across the company should evaluate NPS results and find what’s driving satisfaction and dissatisfaction. Different teams just adjust their approach and make changes accordingly. You can then use the previous NPS score as a benchmark to see if the changes had improved your score.
O: If leveraged and deployed correctly, NPS can be one of the greatest factors contributing to driving growth and decreasing churn. Use each survey responses the opportunity to increase customer loyalty.
N: You should not keep your score front of mind but how you can segment customers into different follow-up strategies based on the feedback they’ve provided. Now that you know the difference between a perfectly designed NPS campaign and a terrible one, all you need to do is turn knowledge into action! In no time you’ll see your results will improve immeasurably.
O: NPS surveys should not be the end of the discussion – they should give rise to one.
N: We’ll now launch a live QA session.