- NPS score is a great way to understand how much your product is loved;
- Have a systematic way to capture NPS starting with the first customers;
- Make sure to ask your customers why they gave you that score to surface product improvements.
Calculating the NPS score
NPS is calculated by surveying your customers and asking them a very simple question: “How likely is it that you would recommend our company to a friend?” Based on their responses on a 0 – 10 scale, group your customers into Promoters (9-10 score), Passives (7-8 score), and Detractors (0-6 score). Then subtract the percentage of detractors from the percentage of promoters and you have your NPS score. The score ranges from -100 (all detractors) to +100 (all promoters). An NPS score of +50 is considered excellent.
It’s a tool for improvement, not just a score
Having a score for how well your product is doing is great, but it isn’t the score that is going to improve your business. The power comes from following up with responders and asking "why did you give that score?". This is the magic of tracking NPS and it will give you a wealth of ideas for how to make your product better. Having a regular NPS heartbeat will efficiently and continually connect you with your customers to surface actionable insight for making product changes.
Why a high score is good
A higher NPS score correlates to customer loyalty and will ultimately improve the economics of your business. If you are a low margin business or in an expensive space in terms of marketing spend then you will want to put more focus on getting this number higher quicker. For example, Transferwise, who are disrupting the banks by offering very low commission money transfers, couldn’t compete on marketing spend with high margin banks, so they focussed on product driven growth through relentlessly tracking and improving their NPS score.
Make sure to follow up with responders
A lot of people track the NPS score but do nothing with it. This is the biggest mistake. The true value of the NPS score is not in the number but in the follow-up. Make sure that you read every response that you get and then follow up with each user to ask why, especially in the beginning. Even at scale you can continue to do this with a random sample of customers or when you are not sure how to take the product forward. Remember, most people don’t respond. So the ones that do whether good or bad are extremely valuable to you.
The beauty of detractors
Detractors will not be recommending your product, but they have decided to let you know rather than just ignore you. They cared enough to respond even if they didn’t like it, that’s valuable. Why did they give a low score? What were they expecting? What was promised? Make sure to find out. Often, you will identify some obvious problem that you can fix quite quickly. In other cases, it might lead to a change in who you are targeting as it shows a mismatch between the users you want and the actual audience.
Love your neutrals
I love neutrals. In fact, I love them more than attractors. They have cared enough to respond, they thought about whether you were a 9 or a 10 and then decided that you were not quite there yet. They can often articulate much better than attractors where you can improve.
Find the magic with your attractors
A lot of attractors will just say “Your great!”, which is nice for the score but not very helpful for improvements. However if you ask them why it can help you to understand where the magic is in your product. For example, while working with Lexoo (a legal marketplace), we often got feedback from customers that gave 10s that they were impressed that they got 3 quotes within 24 hours. We did not realise how important the speed of response was to the experience. They used this feedback to double down on features that encourage lawyers to quote quickly.
Help your attractors talk about you more
When you receive a 9 or a 10 you have a happy customer. They have said that they will recommend your product to a friend so make it easier for them. If your product will benefit from positive reviews or ratings then this is a great time to ask if they would recommend, rate or give you a Trustpilot review. Add sharing or referral programs to amplify their happiness and lower your acquisition costs.
How do I capture it?
There are a number of services that help you automate and track NPS easily. For email based NPS I have used promoter.io. For Saas businesses then Qualaroo is a powerful tool that lets you capture NPS from within your website or app. Both are easy to setup and relatively inexpensive. At scale you might want to build your own so that you can tie the NPS score tightly to your customer data to allow you to understand what behaviours lead to higher or lower scores.
When to send your survey
When you are first starting out I recommend it to send it shortly after your customer experiences the value that you are offering. For example, an ecommerce store might have an in app survey after someone purchases a product and then follow up with an email survey a few days after they have received their first order. This would cover not just the online experience but also the delivery and packaging experience. For products where the value is experienced months away, like booking a holiday, then in the early stages it is better to get feedback straight after the booking experience as well as after the holiday. Allowing you to move fast and make improvements. It is useful to ask repeat customers over time but try to keep at least a decent gap between asking again. We will typically leave at least a months gap but it totally depends on the product.
Typical response rates
The response rate for an NPS survey will depend on a number of factors. The timing for when it is sent and the medium that they receive it. Be sure to experiment with different times and email titles to make sure you are getting a decent conversion rate. As a guide I have seen email response rates vary between 15-25% and in app surveys between 20-40%.