One tool businesses can use to capture valuable insights is the transactional Net Promoter Score (tNPS). This metric measures the likelihood of a customer recommending a business or product after experiencing it firsthand, revealing key information about customer satisfaction. 

In this article, we’ll look at tNPS in depth, explaining how it works, how you can use it to understand consumer sentiment, and how it can help in improving your customer experience.

What is a transactional NPS (tNPS)?

Alright, we get that it’s important for businesses but, what exactly is Transactional Net Promoter Score (tNPS)? Transactional Net Promoter Score (tNPS) is a measure of customer satisfaction. It’s a collection and the result of gathered data and feedback about an individual’s experience with a business or service.

TNPS surveys are usually sent out immediately after a customer makes contact with the business. These surveys provide valuable insight into how the interaction went, and whether it was either satisfactory and likely to result in customers promoting the business further.

“TNPS surveys ask the right questions to your customers at the most critical moment – after a transaction,” explains Colin Palfrey, CMO of Crediful. “By asking your customers how they feel immediately after interacting with your business, you can gain a truthful insight into their customer journey. TNPS gathers touchpoint-specific data to give you an overview of the strengths and weaknesses within your business.”

By quickly sending out tNPS surveys to customers and analyzing the results, companies can easily identify where their customers fall on the scale of Promoters, Passives, or Detractors based on their responses.

This type of feedback allows executives to adjust and quickly pinpoint customer satisfaction success or failure, as well as anticipate future areas that require improvement.

How to calculate transactional NPS (tNPS)?

Going back to the basics, the Net Promoter Score (NPS) is a way to measure customer satisfaction and loyalty. It does this by asking customers to rate their experiences based on a scale of 0-10, with 0 being the least satisfied and 10 being the most.

NPS divides customers into three categories:

• Promoters: are very satisfied with the company they’re talking about and will highly recommend it to others; they rate 9 or 10 on the scale.
• Detractors: are not satisfied at all – they typically give a rating between 0-6.
• Passives: are somewhere in-between, giving ratings of 7 or 8.

By measuring the ratio between these different segments of customers, companies can get an idea of how their services are performing and how loyal their customers really are.

Calculating tNPS is straightforward – just subtract the percentage of detractors from the percentage of promoters. That’s it! Knowing these stats can be really useful in helping you quickly identify up-and-coming trends and feedback from customers.

What is the difference between transactional NPS (tNPS) and Net Promoter Score (NPS)?

We now know that the Transactional Net Promoter Score (tNPS) is a simple way to get a snapshot of how your customers feel about the transactions they’ve had with your company. But what is the difference between tNPS and NPS?

Transactional Net Promoter Score (tNPS) and Net Promoter Score (NPS) are two common measurements used to understand customer feedback. While they’re both useful, they measure different facets of the customer experience.

TNPS takes a closer look at individual customer interactions and helps to identify potential issues that need resolving in order for companies to keep their customers happy.

On the other hand, NPS looks more broadly at the overall satisfaction of customers. This score provides an indication of how well a company is doing as a whole by asking customers for ratings and collecting survey results.

“Sending a tNPS survey to a new customer is a great way to see if your business is driving away potential customers,” says George Tsagas, Owner and Founder of eMathZone. “Asking new customers to complete a tNPS survey will reveal whether your onboarding process is effective. You can use tNPS for any interaction you have with your customers to check if your clients are happy.”

Traditional NPS surveys ask the customer how likely they are to recommend a business without asking detailed questions. NPS surveys ask simple questions such as “how likely are you to recommend us to a friend?” This type of survey can tell us whether the customer is happy or not but without the finer details.

Meanwhile, a typical tNPS question may ask, “Based on your recent free trial, how likely are you to recommend our products to a friend?” Targeted questions through tNPS surveys can identify specific pain points your company fails to address.

By using both tNPS and NPS, businesses can get an idea if any specific issues are affecting customers’ opinion of them as well as get an understanding of how satisfied people are with their service in general.

Using tNPS to improve your Customer Experience

“Exceptional customer service plays a vital part in the growth of any business. 89% of customers say they are more likely to complete a purchase after a positive customer service experience,” explains Jim Pendergast, Senior Vice President of altLine Sobanco. “Customers are more likely to forgive mistakes after receiving excellent customer service. Using TNPS can help you enhance your company’s CX and prevent customers from leaving.”

Transactional Net Promoter Score (tNPS) is a great tool for improving your customer experience. With tNPS, you can measure your customers’ satisfaction as suited to their individual experiences with you and use this feedback to hone in on where additional efforts should be made.

From gathering feedback on the efficiency of delivery, to learning what product features are most appreciated by customers, using tNPS helps companies uncover insights and make improvements, which leads to happier customers who will be more likely to trust in a brand’s products or services.

Types of transactional NPS (tNPS) surveys

The main goal of tNPS is to gauge customer satisfaction with the transaction and to identify any areas where the company can improve its service. On the other hand, there are various types of tNPS surveys.

These surveys provide valuable insights into how well a company’s products or services meet customers’ expectations and can be used to improve customer experience, drive product innovation, and build better customer relationships. Let’s check out each one of them.

Post-purchase Surveys: Post-purchase surveys are sent to customers after they’ve made a purchase from the business. This type of transactional NPS survey allows businesses to measure how satisfied their customers are with their purchase decision. It also helps them find out what areas could use improvement, such as product features, delivery speed, product value, customer service, etc.

Post-purchase surveys give companies an opportunity to create more meaningful customer relationships by acting on any feedback they receive quickly and effectively.

Post-service Surveys: Post-service Transactional NPS surveys are sent to customers after they’ve received a service from the business. This type of survey is helpful for measuring customer satisfaction with the quality of service delivered and allows companies to identify areas of improvement for future services or products.

Acting on this feedback quickly gives companies the chance to build trust with customers and make sure that each customer experience is positive and memorable.

Event-specific Surveys: Event-specific Transactional NPS surveys are sent out after an event has taken place, such as a conference or trade show. These surveys allow businesses to track audience sentiment in real-time and understand how successful the event was in terms of delivering value to attendees.

The insights gleaned from event-specific Transactional NPS surveys can be used to inform future events, ensuring that each one maximizes its impact on attendees while providing the business with maximum ROI.

Follow-up Surveys: Follow-up Transactional NPS surveys are sent out at intervals after a purchase or service has been delivered in order to track long-term satisfaction levels over time.

Companies can use these kinds of surveys to get detailed feedback about various aspects of their offerings and make sure that their products or services remain relevant and up-to-date according to changing customer needs over time.

By proactively taking action on any negative feedback received through follow-up Transactional NPS surveys, companies can stay ahead of any potential problems before they become full-blown issues down the line.

“Understanding the strengths and weaknesses of your competitors is a vital part of building your CX strategy,” says Jarret Austin, Owner of Bankruptcy Canada Inc. “If your customers are choosing your competitors, then you need to find out why. Looking at their customer feedback will help you understand their products, services, and customer service abilities and why customers rate them higher.”

What are some factors that influence transactional NPS (tNPS)?

The factors that influence tNPS scores can vary greatly depending on the business’s product or service offering, but in general, they can be broken down into three categories: customer experience, brand awareness, and product reputation.

Customer experience encompasses everything from ease of use to customer service; improving this will have a direct impact on TNPS scores. Brand awareness refers to how familiar customers are with your company and its offerings; if they recognize your brand, they’re more likely to be satisfied with their purchase or service.

Finally, product reputation reflects the opinions of existing users; if their experiences have been positive, then this will have an effect on TNPS scores as well.

Improving your tNPS score isn’t a one-size-fits-all kind of task; it requires a comprehensive approach that takes into account all of the factors mentioned above. To start off, make sure you focus on providing an excellent customer experience through quality products/services and top-notch customer service – no one will want to recommend something that didn’t meet their expectations!

Additionally, leverage social media and other channels to spread awareness about your brand and its offerings – letting potential customers know why you’re different from competitors.

This will help build positive impressions before they make a purchase decision. Finally, make sure you pay attention to what existing users have to say about your products/services.

Responding quickly and appropriately when issues arise can help ensure that those users remain satisfied with their purchase decisions even after using them for some time.

“Obtaining a TNPS score of 100 is impossible for any business to achieve,” explains Kyle Zien, Director of Growth Marketing at Felix. “Getting a positive TNPS score is possible for businesses who use customer feedback to their advantage.

Asking your customers to give feedback also shows that you value their opinion. Giving your customers a voice will strengthen customer relationships and turn loyal patrons into brand ambassadors who will recommend your products.”

Having a high TNPS score has numerous benefits for businesses both small and large alike. For starters, it serves as an indicator of how loyal your customers are which can provide valuable insights into future growth strategies (e.g., which areas should be emphasized for improvement).

Furthermore, having high marks in terms of customer loyalty means that more people may be willing to recommend your product or service – leading to greater word-of-mouth advertising without any extra effort on your part!

Key Takeaways

•TNPS is a metric that measures the likelihood of a customer recommending a business or product after experiencing it firsthand, revealing key information about customer satisfaction.

• TNPS surveys are usually sent out immediately after a customer makes contact with the business and provide valuable insight into how the interaction went.

• NPS divides customers into three categories: Promoters, Passives, or Detractors based on their responses.

• Calculating tNPS is straightforward – just subtract the percentage of detractors from the percentage of promoters.

• Transactional Net Promoter Score (tNPS) and Net Promoter Score (NPS) are two common measurements used to understand customer feedback but measure different facets of the customer experience.

• Post-purchase Surveys, Post-service Surveys, Event-specific Surveys, and Follow-up Surveys are all types of tNPS surveys businesses can use to gather feedback about various aspects of their company in order to improve customer experience.

The post What is tNPS? Understanding Transactional NPS appeared first on Lumoa.

In this article, we will share some good tips on how you should manage and utilize NPS benchmarks.

Net Promoter Score in a nutshell

NPS, or Net Promoter Score, is a market metric that is used in many industries because it is an easy way to quantify how loyal customers are. Recent findings show that NPS is one of the top 3 customer experience metrics used by CX programs. In a nutshell, the Net Promoter Score asks “how likely would you be to recommend” a product or service to others. It calculates the percentage of promoters, minus the percentage of detractors.

What is a good NPS?

NPS benchmarks can help businesses measure and compare customer loyalty across different industries, geographies, and time periods, enabling them to better understand the factors that drive customer enthusiasm and satisfaction.

Additionally, NPS benchmarks can be used to compare the performance of different product and service offerings within the same organization. By understanding how customer loyalty changes over time, companies can make data-driven decisions on where to invest resources in order to increase customer engagement and experience.

These benchmarks may show you signs of whether your business is doing well or needs improvement. Focusing on internal benchmarks is where you want to start looking.

The NPS benchmark you should aim for in your industry should be above average – that is how you can keep standards and results high. There are 2 ways in which these benchmarks are shown. These are:

1. Global Benchmark (Absolute method) – As suggested by Reichheld, a standard NPS result can be:
2. 1. 0 which means good
   2. 20 means favorable
   3. 50 is excellent
   4. 80 is world-class

2. Industry Benchmark (Relative method) – These benchmarks provide organizations with valuable insights into how they are performing relative to their competitors. By understanding the NPS of competing organizations, businesses can take steps to improve their own score and increase customer loyalty.

Generally, an industry benchmark will be determined by calculating the average of all competitors in a given sector, such as retail or banking. By looking at the average NPS across all industries, it is possible to understand how individual organizations are faring and identify areas that need improvement.

Furthermore, true industry leaders can be determined by examining NPS data, allowing businesses to strive for higher levels of customer satisfaction and loyalty.

In addition to providing a quantitative benchmark for organizations, NPS data can also reveal specific customer touchpoints that have been successful or unsuccessful in creating positive customer experiences. This information can then be used to fuel strategies for improving customer retention and increasing revenue through improving customer satisfaction.

Factors that affect your NPS

Despite the ease of understanding what a good NPS is, benchmarking can be complex. In fact, it can sometimes be misleading.

NPS measures the satisfaction level of your customers, not just the attitudes they hold towards your company. You can improve your product every day but what’s the point if your customers leave and remain unhappy? Surely, your promoters must stay as promoters. But, we can’t forget about the detractors.

Here’s an interesting fact. In a recent study, at least 49% of consumers are now saying that they are willing to talk about their positive experiences on social media compared to the 30% of those who will post something negative. A significant change since 2013 when it is the other way around. There were previously 45% of people sharing negative feedback on social media and only 32% sharing positive feedback.

Digging through the reasons for these changes can be from many factors such as digitalization, the rise of millennials, cancel culture, politics, etc. which only proves that trends keep changing and so does the opportunities and threats. But again, every customer satisfaction metric has several factors that influence the results. That is why you need to take note of the factors:

Customer zone of tolerance

Zone of tolerance has something to do with how much your customers interact with your business on a daily basis. It is not an NPS, but a result of your customer’s satisfaction that decreases whenever there is a service interruption.

You can ask yourself, on a scale of 0-10, How likely would your customer get angry in case there is a service interruption? that is, if you fail to address their issues immediately. There are two ways to categorize it.

• Low-tolerance industry and high-tolerance industry. Using a Likert scale of 0-10, Low-tolerance-industry are those industries that may get mostly a score of near 10 when asked how much negative reaction a business will get during an interruption. (e.g., Streaming services, telecommunication industry, etc.)
• High-tolerance-industry meanwhile is the opposite. A score of less than 4 means a business will less likely to receive negative feedback when an interruption happens. (e.g. retail industry)

On the other hand, just because your score falls in the high-tolerance industry doesn’t mean you should be complacent! Your score, however high or low it is, can change by how you provide a good customer experience. In a low-tolerance industry, Increasing the tolerance level by providing customer touch points is one small step to putting a smile on your customers.

Challenges in economic and current events

The recent pandemic has greatly influenced how consumers think and decide. Now more than ever, it is so much easier for any customer to turn their attention to something else after having just one bad customer experience.

Options are everywhere and grasping a positive customer experience like no other is getting harder; a great contributing factor affecting the trends in different industries. We can see through these changes because of the increasing demands in enhancing the business processes, digitalization, and ease in customer experiences.

The scores are shifting downwards. According to the data by Retently, they found that out of the 20 industries they looked into, banking, SaaS, and other online services got a more significant decline. Noticeably, the pandemic that shook big and small enterprises is one of the reasons that caused this decline. But we’re past that stage, and now, many businesses are focusing on recovery.

What can SMEs do? Adapt. There is no way that we can stop the changes around us. In fact, change is the only constant thing in life as many would say. Some industries, for example, had the chance to prepare and adapt before the pandemic hits and others even managed to gain good NPS results while there is an economic crisis resulting from this.

Scoring nature due to cultural and regional biases

An NPS result of a particular business may not necessarily suit a particular culture. For example, Europeans generally score a lower NPS than Americans. But why?

The reason for this has a lot to do with the “scoring nature” of different countries and cultures due to their backgrounds and differences in giving opinions.

As compared with Europeans, Americans are more likely to give extreme answers when asked to rate something from 0 to 10. Something that is rooted in their culture such as the school grading system where a child is expected to have a grade of A’s (also means 10). Meanwhile, when Europeans get an 8 or sometimes even 6, it means it’s a very good score.

Many European businesses fall under neutral NPS scores. So, to leverage the classic scoring system, applying 8 as an addition to the promoters, and 6 as a passive will help in balancing the overall results. (Refer to the chart above)

The numbers alone can’t show you where you need to improve your score. That’s why platforms that focus on analyzing customer experience are one of the best ways to identify who are your promoters, who are your detractors, and what exactly are they saying

Take the Lumoa platform as an example. Most companies today use NPS, CSAT, online ratings, and other numbers to assess how happy their customers are. What they miss though is a way to tell what actions will move the numbers up or down. That’s why Lumoa looks at any interaction with your customers and tells you what to do next to grow your business.

In which industry does your business belong to?

Knowing how your internal NPS is one thing but knowing where you stand in the big picture is another.

Every NPS result has a benchmark by industry. Industry benchmarking is a good way to hit two birds with one stone. NPS benchmarks by industry are a good basis for businesses to challenge themselves for improvements as well as to know who and where their competitors stand.  Additionally, it’s easier nowadays to gain insight into the industry NPS. They are mostly available on many Customer Experience Management (CEM) platforms and are open to the public.

How good is your score?

Bain & Company’s Loyalty practice creator Fred Reichheld suggests that any NPS above 0 is good. It means your customers are happy. Anything above 20 would mean it’s favorable. A score of 50 is “excellent”, and above 80 is considered world-class.

A score of 100 means that 100% of your customers are promoters, which is an unrealistic approach. It might seem like an ideal NPS, but you’re setting up yourself for the unreachable goal.

We already know how it’s calculated and what may affect the results of an NPS, so now, let’s look at how to analyze it. Take a look at the NPS in the retail industry and its 2022 benchmark as an example. The latest NPS benchmark for the retail industry shows that if Company X gets a score of 44 NPS above, it’s in the median level. This means people are happy about the business and its products or services. 25% of organizations that are at the bottom that get an NPS of 0 are doing ok but need improvement, while the other 25% that have 72 NPS or higher means they are doing well.

Because an NPS result can fall between -100 to 100, judging where you stand in global NPS standards (also known as the absolute method) and industry NPS Standards (or relative method) will give you a better insight into your overall NPS.

As per Reichheld, a score above 50 is an excellent NPS. However, these are all general guidelines. It is always advisable to look into industry-specific benchmarks.

Take note that getting the most recent data for your NPS would be better, but that doesn’t mean previous results are irrelevant. A comparison of previous NPS to the latest NPS is in fact, another way to know if your customers are happy and a good opportunity to challenge your business to develop further.

Is there a correlation between NPS and company growth?

The short answer is, YES, it does! According to a study published by the London School of Economics entitled “Advocacy Drives Growth”, an average NPS increase of 7% correlates on average with a 1% growth in revenue. So yes, it has a great correlation to the growth of a business and is a great reason to think about how to increase your NPS!

However, influencing your current NPS is hardly possible without a bigger picture.

How to Increase your NPS Score?

So how do you increase your NPS score? There are numerous ways to increase your NPS and some of them are already mentioned above but most of all, it starts internally.

Define your goals and aim higher

The goal of improving your NPS should be part of your business objectives, and everyone in the organization should be on board with this. In addition, anything that enhances the customer experience, no matter how small, will help raise the score.

Challenge your performance by aiming higher than the previous results. The beauty of the Net Promoter system is that you can compare the scores, see the progress throughout time, and evaluate your efforts towards the NPS goal.

Listen to the voice-of-customer

How often does your business respond to voice-of-customer and close the loop?

It is important to know what they think about your products or services and resolve the issue as soon as possible. Moreover, it’s a good practice to ask for feedback from the right audience, at the right time, and at the right touch point.

Make them feel that they are an important part of how your business grows. Take proactive steps to improve your products and services, including training your employees so that they can give better customer service.

Remember!

When analyzing the NPS result, remember that NPS is more than just a score. Missing the open response part leaves a business without deep insights into what drives your customer experience up or down. 

Analyzing NPS as a whole will bring you to understanding what your customers love and hate about the business, what they see as competitive advantages, and which direction you should move forward.

The post What is a good Net Promoter Score? appeared first on Lumoa.

A Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction. An NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. This number gives you an idea of how likely your customers are to recommend your company to others. 

We wrote a step-by-step guide that explains what NPS is and exactly how you can work your NPS out. Or, if you need more guidance, our helpful team is always on hand to answer any of your questions. 

This blog post will discuss NPS benchmarks and look at why NPS is so essential to overall customer success. We will also explore what factors influence NPS scores and how you can improve your NPS score and be more competitive. 

So, without further ado… 

Why is NPS important?

An NPS score is a valuable metric to track customer sentiment, and it can help businesses improve customer loyalty, boost sales, and improve customer satisfaction. This makes it an essential consideration for any customer success manager in almost any industry. However, it’s important to remember that the score should not be used in isolation and should be part of a broader customer success strategy.  

Measuring NPS can help your company identify customers at risk of churning and defecting to competitors. This valuable metric allows you to keep track of the loyalty and satisfaction of your current customer base and empowers you to take corrective action before they leave. It’s well-known that getting new business is more challenging than retaining it, so focusing on offering the best possible customer experience (backed up by opinions of actual, paying customers) is an efficient way of running a business and ensuring that you have more promoters than detractors. 

Measuring changes in your NPS over time is also an insightful way to assess your company’s progress and determine whether or not you are on the right track. It’s essential to look at how the score is broken down between promoters, passives, and detractors, plus analyze any comments. The significance and importance of reading text answers and comments from your customers can’t be underestimated. Not only does this give you an excellent insight into their true opinion of your product or service, but these comments will clearly show areas needing improvement and where your team should focus its energy. 

What’s more, looking at it from a purely positive standpoint, your customer NPS score can help you identify which customers are likely to refer you to their friends and thus boost word-of-mouth marketing. You can use this information to reach out to those promoter customers to find out what they did and didn’t like about your service so that you can continuously improve. 

With all of this in mind, it’s clear that measuring and tracking customer NPS is essential for any business wanting to keep tabs on the health of its customer relationships (and improve them over time) and utilizing a customer insights platform such as Lumoa makes this a significantly more manageable task.

There’s several frameworks, metrics, and other tools to measure and manage customer satisfaction and customer loyalty, but Net Promoter Systems stands out among them with its comprehensiveness and universality.

Bill Macaitis, Advisor & Board Member, former CMO of Slack and Zendesk

What is a “good” Net Promoter Score?

NPS scores can vary significantly from industry to industry. For example, the average NPS score in 2021 for the retail sector is 32.9, while the average NPS score for the banking industry is 23.6, and IT services is 42. While on the face of it, it may appear that the IT services industry is “better” than the banking industry, that’s not necessarily true. This is why benchmarking is so important, which we will discuss later. 

There are several factors that can influence NPS. These include customer satisfaction, customer loyalty, and customer engagement. NPS scores are also affected by company size, industry, and country. All of these differentials need to be taken into account when comparing your NPS score to see how you stack up against other companies to see if you have a “good” score. 

There are two ways to assess your NPS; one is by looking at your score relative to your industry (the relative method), the other is to measure your score against an average across all industries (the absolute method): 

If you’re looking to assess your NPS against all industries, the following is a good guideline: 

• A score under 0 shows that a company has more dissatisfied customers than satisfied ones (more detractors than promoters) and that improvement is needed.
• A good NPS score is generally between 0 and 30. 
• A score between 30 and 60 shows that clients are extremely satisfied.   

However, benchmarking—the relative method—gives a more accurate picture of how you compare on a “like for like” basis. An excellent example of benchmarking would be Starbucks comparing their NPS to Costa Coffee – similar companies, similar products, similar customers, and similar reach.

Setting industry NPS benchmarks

Some markets never reach high NPS scores for one reason or another, and it’s particularly relevant for companies in these markets to consider using the benchmarking method to assess their NPS score if they want to get an accurate and informative picture of how they compare to competitors.  

Once you have analyzed the data from your surveys and found out your NPS, there are then several steps you need to take to ensure you’re benchmarking this correctly.  

Compare apples with apples

Firstly, look at your industry only; if you include data from other industries, you won’t be able to get a like for like comparison as each industry has different levels of “good,” as we discussed previously. To explain this further, we can look at the banking and eCommerce markets. In 2022 the highest-ranking bank was First Republic Bank, with an NPS score of 72; one of the lowest was Goldman Sachs, which had a ranking of 5.  

If you compare these figures to the wearables market, Fitbit has an NPS score of 12 and Garmin a score of -2. However, the market is much narrower, so while the difference in comparison to First Republic Bank appears substantial, in reality, a score of 12 is relatively good compared to the rest of the wearables market.  

Remember, location matters ..

Secondly, location and cultural differences can significantly impact NPS scores depending on the levels of enthusiasm of participants in each geographical location relative to numerical-based scoring systems. For example, Europeans tend to err on the conservative side while scoring on a numerical basis and are less likely to give scores of 9 or 10. In contrast, customers state-side are more likely to give the coveted 9 or 10 scores needed to class customers as “promoters.”

Further evidence of cultural bias is that customers in Japan tend to rate their satisfaction levels lower due to high customer service standards. And interestingly, those surveyed in Latin America tend to rate higher than all other areas. 

.. As does the survey channel 

Suppose you ask a willing customer a set of questions over the phone or face to face. You’re more likely to get deeper, more meaningful answers than if you asked the same person the same questions via another survey channel, such as a web form, email, or SMS survey service. It’s therefore essential to consider this when you’re looking at other companies’ NPS scores and choose a comparable, or the same, survey channel to compare your data to. This will give you the most accurate snapshot of their position relative to your own. 

Once you’ve benchmarked your NPS against similar companies, it certainly gives you a good indication of how you compare at this moment. However, tracking your NPS over several months along with that of your relative market is a much more helpful metric that will show how your business is improving or, on the flip side, if standards are slipping.

How can you improve your NPS?

There are numerous approaches you can take to improve your NPS score. Firstly, it’s essential to focus on cultivating customer satisfaction. This can be done by ensuring that your products or services meet customer needs and exceed expectations. And it’s worth remembering that improving NPS shouldn’t be the sole responsibility of the customer success team; ultimately, it needs to be a companywide consideration. 

Second, focus on increasing customer loyalty. This can be done by creating a solid brand identity and developing long-term relationships with customers. Finally, focus on improving customer engagement. This can be done by providing relevant and targeted content, offering personalized experiences, and making it easy for customers to provide feedback.

Sharing your NPS is excellent for building brand reputation and trust with customers; it’s even better if you see your score improving year on year and share that information.  

However, even a mid-tier score could be worth making public when combined with the option for feedback and suggestions. 

This is also a beneficial way of utilizing a digital touchpoint because it offers interaction. It gives customers a way to vent their frustration or provide constructive criticism that you can use to improve. Not only that, but if you listen to and act on customers’ suggestions, you can discuss this in your content and marketing materials – further strengthening your brand’s reputation. 

Final word

NPS is an important metric to consider when looking at an overall customer success strategy and even more critical when you use that score to benchmark against your industry. With over two-thirds of Fortune 500 companies using NPS to understand better the experience their customers have, it’s clear that this formula is helping companies improve their services and customer satisfaction levels. 

Using a tool such as Lumoa is a fast and efficient way to analyze large volumes of data continuously. Combining the benefits of AI and human intelligence to find the most important and relevant information from customer feedback, Lumoa users can quickly act on these valuable insights and improve their NPS and customer satisfaction levels.

Looking to Improve Your CEM System? Leverage the Data Collected with Lumoa

Improving your CEM system is an ongoing process and having an accurate benchmarking mechanism will help ensure that you stay on the right track. The general tips above can help ensure that you benchmark the right types of surveys and zero in on metrics that provide actionable insights.

If you want to learn more about Lumoa and how it can help you assess the data you collect through all of your surveys, contact us today or start a free trial.

The post How to Set Industry NPS Benchmarks and Why It Matters appeared first on Lumoa.

It is vital for companies to know if their clients and customers are happy with their service and products, and NPS solutions are one of the best ways to find out. Net Promoter Score is a benchmark for customer loyalty that tells how your customers understand your business and feel about it. In simple words, NPS software is a tool, that helps businesses measure and track NPS results and get in-depth insights from customers.

Reasons To Invest in an NPS Software

Their perspective represents their sentiments regarding your brand, products, services, and business model. It will help you understand your customers and discover more valuable approaches to enhance your products or services. Here are some of the top reasons why NSP you should invest in NPS software:

Minimizes Customer Churn Rate

Business growth can be understood by measuring the inflow and outflow of the customers in the business. Churn rate those numbers of customers who left your company because of having a bad customer experience. These churn customers are the biggest threat to your brand, as they can spread negative words. NSP software will help you control churn by keeping your eyes on the software.

Measure Customer Loyalty

NSP software is beneficial for every company as it helps measure customer loyalty. This factor helps grow the business by recommending your brand to other customers. With the help of NSP, you can measure if you acquire satisfied or unsatisfied customers.

Improves Business Profit

The business profit comes from the customers, and if your customers are happy with your brand, they will come back. Aiming for a high NPS score will help you in increasing your profit and achieve a high ROI on your customer experience.

NPS surveys or full NPS analytics?

The question of “What should you invest in: survey or analytics?” reminds me a lot “Chicken vs. Egg”-dilemma. Without a properly crafted customer survey, you would not get enough data. And without great analytics, you would not understand your data. Both these steps of building the Voice of Customer-program are essential for its success.

However, when debating survey vs. analytics, professionals often forget why they started the customer experience management program in the first place. Usually, the reason is between understanding the needs of their customers and driving advocacy and profit with a better customer experience. For that, leaders should stop spending all their time collecting and analyzing by trusting it to the right tools and spend time on driving product and customer experience changes by looking at the results of customer feedback.

1.   Lumoa

Lumoa is one of the leading AI-based customer insight platforms that help companies gather and generate insights from customer feedback. It is all-in-one SaaS platform for collecting and analyzing customer feedback, including NPS feedback. You can easily identify the topics that drives your NPS score up and down.  And maybe more importantly, you can see exactly how much each topic impacts on the NPS score, which makes it easy to prioritize the issues that needs to be dealt with first.

Key Features

• Understand what drives the NPS up and down, and with how much.
• Analyze feedback in more than 60+ languages.
• Analyze any type of feedback such as NPS, CSAT, CES, or open text.
• Analyze feedback from any source; surveys, chat, reviews, Social media, phone calls, etc.
• Unlimited users
• Offers free trials

Read more: Lumoa.me

2.    Survicate

Survicate is a popular customer feedback tool that offers four preeminent services: Mobile App Surveys, Website Feedback Surveys, Surveys & Forms. Suricate’s focus is more towards collecting feedback rather than analyzing feedback, but they do offer some basic analysis of feedback. One of its significant qualities is that it is easy to use and has 125 ready-to-use survey templates. You can run the surveys through emails, apps, websites, and links. It offers integration with tools such as google sheets, google analytics, HubSpot, and many more.

Key Features

• Easy to create good-looking surveys
• Several survey trigger option
• It has a questioning library, where the customers’ questions are stored
• Unlimited free users and surveys
• Integration possibilities

Read more: Survicate

3.   Promoter.io

Promotoer.io is one of the top NPS software used for analyzing customer satisfaction and gaining insight into the customers’ response. It collects the information by analyzing, engaging, measuring, and growing customer engagement. One of the only barriers is that its price may start steeping. It is equipped with many extremely easy tools and consists of over a million questions, making it even more desirable. Through this software, you can create NPS surveys in no time and then schedule them for automatic dispersal.

Key Features

• Collect NPS feedback via email, SMS, and embedded link
• Support surveys in 27 languages
• Real-time text analytics
• Superb user interface (UI)

Read more: promoter.io

4.   Trustmary

Trustmary is a review and feedback system that not only helps you measure NPS but also gets you authentic customer reviews. When you send your customers an NPS survey with open feedback, you can ask the Promoters to leave their feedback as public reviews. You can then easily add the testimonials to your website with a review widget or share them on social media. Integrate Trustmary with your CRM or other daily tools to create an automatic feedback collection process. Get customer experience reports that help you follow your success in real-time.

Key Features

• NPS survey templates
• Always updated reports
• Turn feedback into reviews
• Various integration and automation options

Read more: Trustmary

5.   Zonka Feedback

Zonka Feedback is an omnichannel feedback management tool that lets you capture feedback across channels like websites, products, in-app, emails, SMS, kiosk, and offline. The survey software is geared towards empowering businesses to do more with insights received from the users. It helps run effective NPS surveys across different touchpoints in the customer journey and offers in-depth, actionable insights to drive loyalty. Not only does it come with several ready-to-use NPS survey templates to send NPS surveys instantly, but it also helps measure customer loyalty and convert detractors into passives and passives into promoters.

Key Features

• Advanced NPS survey tool with in-depth insights to prevent churn
• Comprehensive survey software at competitive pricing
• Sync NPS surveys with HubSpot, Salesforce, Pipedrive, and other CRMs, collaboration tools, or helpdesk
• Close the feedback loop by taking actions based on responses received

Read more: Zonka Feedback

6.   Satismeter

Satismeter’s software is completely devoted to the NPS. Its features are relatively easy to understand compared to the other NPS software, making it different. The pricing is based on the responses, and all the features are available in all the plans. It truly helps you analyze and understand what your customers want without creating a lot of puzzlement.

Key Features

• Works with Android, iOS, email, apps, and web
• You can invite an unlimited number of team members for no extra cost

Read more: Satismeter

7.   Retently

Even though Retently is a bit expensive, it boasts multiple superior features. It allows you to present the survey to the customers on the most appropriate or convenient channel. You can segment your audience and, for each segment, run different surveys. It lets you customize your survey’s visual appearance to make it more fetching.

Key Features

• Specialized NPS software
• Collect NPS feedback on your website, via email, or in-app
• Automate survey scheduling via workflows and webshooks
• Integration possibilities, such as Slack, Mailchimp, Hubspot, and many more
• Option to run multiple surveys at once for various customer segments

Read more: Retently

8. Nicereply

Nicereply is a survey tool for marketers and customer support to understand the engagement of digital assets: blog content, website, emails, and product marketing. Nicereply made it easy to follow up the survey results and contact promoters, detractors or passives separately in order to drive brand advocacy and reduce churn.

Key Features

• Survey software for marketers and customer support
• Collect NPS, CES or CSAT on your web pages or via email
• Understand the performance of digital assets: from blog content to UX of website
• Close the feedback loop by addressing the feedback directly

   

Read more: Nicereply

9.   SurveySensum

SurveySensum is very convenient when it comes to user experience. It allows you to launch surveys according to the timing which is most apt for you and ask questions that you wish to get answers for very precisely. It provides alerts for notifications and tracks the customer’s sentiments through its sentiment analysis feature.

Key Features

• AI-enabled customer experience management platform
• Easy to use interface

Read more: Surveysensum

10. Delighted

This NPS software allows you to create customer and employee surveys in minutes. With Delighted you can collect multiple types of feedback such as, NPS, CSAT, CES, 5-start surveys etc. Users can easily administer their surveys via email, SMS, web, and link. Delighted accommodates multiple integrations and allows customers to give their insights properly through free response follow-ups to the particular NPS questions.

Key Features

• Multi-language support in 30+ languages
• Automated surveying
• Real-time dashboard
• Feedback scoring and reports

Read more: Delighted

The Future of NPS Software

Gartner states that by 2021, 15% of all customer service interactions will be completely handled by AI, an increase of 400% from 2017. Indeed, CX software is on the rise, with AI and predictive analytics in most demand and 31% of organizations have already invested in technology like AI to outpace the competition.

We hope this article has cleared all your doubts regarding which NPS software to choose. These are the top 10 NSP tools, which will help you get hold of your products & services to deliver effective results. Whether you select the NPS software from our list or not, make sure to use it for your business. NPS is an efficient method to judge your customer’s satisfaction quotient and thus retain them for a longer duration.

The post 10 Most Relevant NPS Software Platforms appeared first on Lumoa.

No matter what industry you’re in or how excellent your products or services are, you’ll always have unsatisfied customers.  

Unfortunately, it’s an inevitable part of doing business.  

Unhappy customers can potentially damage your brand’s perception, spreading negative vibes about your business and seriously tarnishing your brand reputation.  

In fact, a new study conducted by Oracle found that 88% of customers share their negative experiences with their friends and colleagues. According to the survey, only 35% will contact a company to give it a chance to resolve the issue.  

But customer dissatisfaction doesn’t have to damage your business.  

Studies show that 70% of complaining customers will return if their complaints are addressed, and up to 95% will return if their complaints are resolved quickly. That said, how can you turn your detractors into promoters? That’s what you’ll learn in this guide.

What Is a Detractor?

The Net Promoter Score® (NPS) framework is the most commonly used survey methodologies globally and is upheld as the gold standard for customer experience metrics.  

Respondents are asked the question, “How likely are you to recommend ABC company/product to a friend or colleague?” and give a rating between 0 and 10. 

Depending on their response, customers fall into one of these three categories used to establish an NPS score. 

• Promoters (9 or 10) – Typically loyal and happy customers 
• Passives (7 or 8) – Moderately satisfied with a brand and may switch to other brands if they provide better offerings 
• Detractors (0 – 6) – These are customers who have had a negative experience with a brand and can negatively impact a brand’s reputation 

For the purpose of this article, we’ll be focusing on detractors.  

So, who is a detractor? 

The Oxford dictionary defines a detractor as “a person who disparages someone or something.” In the business world, these are your unhappy customers who, if not attended to, can cause a severe dent in your brand image.  

Detractors are the survey respondents who score between 0 and 6 on the NPS scale. They are your unsatisfied customers who will recommend against your brand. 

Why Detractors are Not Good for Business 

If you’re ignoring your detractors, thinking they are less compared to your promoters or whole customer base, then you’re leaving your business open to serious risk.  

Detractors will leave negative reviews and spread bad word of mouth for your brand among the public. According to a survey by Lee Resources, for every 26 customers who leave your brand due to an unsatisfactory experience, one customer files a complaint.  

And a single negative complaint on a major consumer complaints site, like Pissed Consumer, Complaints Board, or Better Business Bureau, can seriously hurt your reputation and bottom line. Here are a few reasons why detractors are not good for your business.  

1. Detractors Bring Your Sales & Profits Down 

Zendesk research shows that 80% will switch to a competitor after a bad experience.

And frustrated customers will have no reason to do business with you. In fact, 41% of customers will spend less money on a brand if they have a bad experience with it.  

Your business will also lose money because you’ll need to find new customers to replace the ones you lost. And according to a Harvard Business Review report, acquiring a new client is up to twenty-five times more expensive than retaining an existing one. 

Plus, the success rate of selling to a new customer is only between 5% and 20%. So, you could spend a fortune trying to find replacements for the distractors you lost and still fail to succeed. You might not even realize how much you have lost until it’s too late. 

In contrast, the success rate of selling to existing customers is anywhere between 60% and 70%. So, focusing on customer retention is the better option. 

2. Detractors Taint Your Brand Image 

In an age where social media has become the de-facto medium for news and gossip, negative reviews can travel very fast when posted on these channels. A negative tweet can go viral in minutes, causing massive damage to your brand’s image. 

Sprout Social research shows that 47% of consumers have used social media to complain about a business. The report reveals that most consumers call out brands on social media to make other people aware of potential issues. 

And even outside of social media, detractors can cause a dent in your brand’s reputation via word of mouth. According to industry sources, 13% of frustrated customers share their experiences with 15 or more people.  

In contrast, 72% of happy customers share their experiences with just six or more people. So, it’s evident that bad customer experience reaches twice as many ears as good experiences.  

3. Detractors Help Your Competition 

What’s the first thing detractors will do once they stop buying from you? 

Find an alternative to your service, of course. And that’s where your competitors come in. They’re eagerly waiting to snatch your once loyal customers and make them their own!  

And with 8 in 10 customers saying they’d switch to a competitor due to poor customer service, you’d better give your customers VIP treatment, lest they move to where the grass is greener. That said, your detractors are potential gold mines for the competition. 

How to Turn Detractors into Promoters

Did you know that a 5% reduction in customer churn rate can increase profits by 25 to 95%?  

Armed with this knowledge, what should you do to turn detractors into promoters? Here are four steps to help you turn an unhappy customer into a happy one. 

1. Collect Feedback  

The first step in turning detractors into promoters is understanding your customers.  

Learn about what makes them tick. Dig deeper into their perception of your brand and figure out whether they’d recommend it to a friend or not.  

In other words, launch an NPS survey. 

Identify your detractors and understand what they think of your brand. Detractors are real people with real problems. Make sure you know their desired outcome and implement strategies to ensure they achieve it.  

Don’t let the NPS survey be the only way – or the only time they can give feedback.

Instead, be available to provide customer support on their preferred channels.  

Be it your website, social media, or mobile app—they should be able to provide feedback without having to fill out numerous forms. Also, continually remind them that those feedback channels are there for them to use.

2. Acknowledge & Apologize 

Sounds awkward, but being humble is critical when dealing with an angry customer. It helps to bring their emotions down.  

Your detractor customers are already unhappy with your brand or products. When they reach out to you, make sure you empathize with them and listen to their concerns. Customer empathy can help to create strong emotional bonds, even with unsatisfied customers. 

Acknowledge the problem and apologize for any inconvenience caused. Don’t shy away from saying “sorry” for the bad experience they had with your products.  

Also, don’t get defensive.  

Resist the urge to defend, evade, or accuse when a customer is unsatisfied.  

The goal is to resolve customers’ issues, not to inflict more frustration. If need be, find other ways to “wow” the customer, such as sending an apology card, gifting a coupon, or adding an additional month to their subscription.  

3. Act on the Customer’s Feedback 

Have you ever shopped on Amazon? If Yes, then you know how swift they are at handling customer disputes. Any problem with orders is resolved immediately.  

They don’t even give you a chance to become a detractor. When you put the customer first like this, people talk. And nothing brings this point home more than what happened in 2008.

Amazon’s “put buyer’s first” policy was the headline of a 2008 New York Times article when one of its authors—Joe Nocera—ordered a PlayStation 3 console for his son. 

The problem was, the PS didn’t come. When he tracked the package, he found that the item had not only been shipped but also delivered to his apartment building days earlier and signed for by one of his neighbors.  

Even though Amazon had no fault in the theft, they promptly shipped another one and didn’t even charge him for the shipping.  

While not every company can achieve this level of customer-centricity, there are a few things you can do to wow your customers and reduce the churn rate.  

First, respond to customer complaints faster.  

A recent study found that 82% of customers rate an immediate response when asking a product or marketing question as “important.” In the case of product defects, any delays in resolving customer queries will only give them time to defect to the competition.  

Secondly, make them feel valued and cared for. Adopting strategies like free shipping can make your detractors feel loved and cared for—a great step towards turning them into promoters.  

4. Close the Feedback Loop

Once you’ve prioritized and fixed the detractor’s issues, it’s time to follow up with them. 

The feedback loop will close when you resolve the customer’s issue and update them about it. Therefore, once you’ve fixed the issue: 

• Tell the customer you delivered on the promise 
• Thank the customer for the feedback 
• Ask for more feedback—that’s how you improve your products/services and make the customer journey ideal 

And don’t resolve the issue for one person. Instead, remove it from the core such that no other customer will ever face the same problem again.  

The fast track to promoters 

Collecting and acting on feedback is a must if you want to have control over the customer experience and limit the number of detractors.  

With tools like Lumoa, which are meant for collecting, analyzing, and taking action on customer feedback, it’s easy to keep track of your detractors. You can use Lumoa for any kind of feedback, such as NPS, CSAT, CES, or open text feedback. 

You can easily identify the issues that make a customer a detractor, and opposite, you can see what are the things that delight your promoters. In addition, Lumoa also allows you to see what things drive your NPS up or down, and with how much. This makes it easy for you to know what are the biggest issues that need to be prioritized and fixed first.  

Final Thoughts 

Converting detractors into promoters isn’t easy.  

However, it’s not impossible either. If you follow the tips mentioned in this guide, you’ll eventually be able to turn disgruntled customers into your brand advocates.  

The post How to Turn NPS Detractors Into Promoters appeared first on Lumoa.

According to HubSpot, customer loyalty is “a customer’s willingness to repeatedly return to a company to conduct some type of business due to the delightful and remarkable experiences they’ve had with that brand.”

Though we often share anecdotal evidence of customer loyalty, having hard numbers to back up those claims are less common. With that in mind, in this article, we cover why customer loyalty is important, along with a few metrics you can track to better understand your customer’s loyalty. 

Why is Customer Loyalty Important?

In order to run a successful business, you need customers. Plain and simple. Though attracting new customers is important, keeping current ones is just as, if not more, important for a few key reasons. First, it costs a lot less to keep a customer than to attract a new one. 

Second, long-term customers are actually more likely to spend more money with your business than new customers. It makes sense. If they’re happy with one product you make, chances are good that they’ll be happy with another. 

Last, loyal customers are more likely to refer you to others. Whether that be to peers, family, or friends, word-of-mouth marketing is unmatched in its effectiveness. In fact, word-of-mouth marketing drives nearly 6 trillion dollars worth of annual spending and results in 5x more sales when compared to a paid impression.   

Knowing the importance of customer loyalty is great, but the real trick is measuring customer loyalty so you can better optimize for it in the future. 

Measuring Customer Loyalty with Metrics

There are a number of different ways you can measure customer loyalty. Commonly, businesses may use something like an NPS survey. Though useful, it only tells part of the story. To have a more well-rounded view of your customer’s loyalty, it may be a good idea to check out a few other customer experience metrics.  

Customer Lifetime Value

Though on the surface customer lifetime value (CLTV) may not seem like an indicator of loyalty, it’s one of the most direct ways to see if your customers are spending more money with you over time. CLTV really only grows one of two ways. Either you increase your pricing, or your customers stay longer. 

So, assuming your pricing hasn’t changed, if you see an increase in CLTV then you know customers are staying longer and purchasing more, thus they are more loyal to your brand. 

To measure CLTV, calculate your average purchase price, and then multiply that by your average purchase frequency. That gives you your average customer value. 

From there, you can multiply that number by the average customer lifespan to get the CLTV.

Renewal ratio

The renewal ratio is often cited as a way to determine how strong your product-market fit is. The conventional wisdom is that if your product is serving customers’ needs, they’ll renew. The same logic can be applied to customer loyalty.

When customers are loyal, they stick with you. So, if you see your renewal rates increasing, then it could be a signal that loyalty is increasing, too. 

Calculating renewal ratio, or repurchase rate as it’s also known, varies depending on the type of business you have. For subscription-based companies, it’s relatively simple. All you need to do is divide the number of customers who extend at the end of their first contract, by those who cancel. 

If you have a transaction-based business, then you’ll need to first calculate your average time between first and second purchases, and it’s standard variation. From there, you’ll be best served by adding two times the standard variation to the average time. Last, divide that number by the number of non-repeat buyers. 

Upselling Ratio

The upselling ratio is a relatively straightforward metric. Basically, it’s a measure of how many customers are increasing their total spend with you. The reason it’s a strong indicator of loyalty is that loyal customers are more likely to purchase other products from you. 

Think about Apple as an example. How many people do you know that first got introduced to their products through an iPod or iPhone? Then, maybe they purchased an iPad or Macbook. It’s not an uncommon story. In fact, 87% of Apple’s customers are brand loyal.

The best way to increase your upselling ratio is to make good products that work. According to research, 55% of consumers said product quality was the dominant factor in brand loyalty.   

Customer loyalty index

If you’ve ever purchased stocks, you may be familiar with the idea of an index. An index fund is a compilation of lots of stocks. The benefit is that having input from different sources makes it a more reliable bet. The same is true with your metrics. 

When you combine multiple metrics, you control for volatility. To create a customer loyalty index combine NPS, repurchasing, and upselling into one metric. Send out a survey asking how likely the respondent is to 1. Refer your friends, 2. Repurchase from you in the future, and 3. Try out other products of yours. 

For each question, you use a standardized scale to measure from “not likely” to “very likely.” To follow the convention, you could use 1-10 as NPS surveys do. You could also use your own scale if you prefer. 

Your customer loyalty index (CLI) is an average of all those scores. Asking customers their intentions directly isn’t always the most accurate way to measure, as what people say they’ll do and what they actually do can vary quite a lot. That said, if you send out the survey regularly, over time you should be able to get a pretty reliable measure. 

Conclusion

Though the days of punch cards may be long gone, customer loyalty is as important as ever. With growing competition, and an ever-changing business landscape your ability to measure customer loyalty is important, too. 

Collecting anecdotal evidence can be great for testimonials and other company collateral, but the best way to get a true pulse is by utilizing metrics. There are the usual suspects like NPS and CSAT, but they only tell part of the story.

Consider looking into a few other metrics like customer lifetime value, renewal ratio, and upselling ratio. Once you have those nailed down, you can bring them together and make your own customer loyalty index. 

When you better understand your customers, you’ll be better able to serve them. When you’re able to better serve them, the more likely they’ll stick around for the long haul. No punch card needed.  

The post Guide on How to Measure Customer Loyalty appeared first on Lumoa.

This simple yet powerful metric has conquered the hearts of many exactly because of its simplicity – both for companies to implement and for customers to answer. Net Promoter System includes 2 questions: “How likely are you to recommend us to a friend or a colleague” and an open-ended “Why?”. Thus NPS gives a very fast way to get insights from a large audience.

At the same time, NPS is one of few that connect customer experience in the present to future revenue. Customers are looking for and trust advice and recommendations from their friends and the Net Promoter Score made it possible to calculate the value and the state of word-of-mouth marketing. Are your customers complaining or are they praising your services?

You’re about to find out.

Let’s have a look at how relationship NPS has become the most popular customer experience metric.

The post Net Promoter Score In A Nutshell [infographic] appeared first on Lumoa.

In doubts, I wanted to reach out to the thought leaders and influencers to know what they think of NPS, or rather, according to the best traditions of NPS, if they would recommend NPS to a fellow CX colleague. I’d love to specify from the very beginning, we focus on the Net Promoter System, not only on the Net Promoter Score (that actually changes a lot).

Now that we’re on the same page, I could go deeper into our small research. All the leaders were asked the same two questions:

1. How likely are you to recommend Net Promoter System to your CX colleagues? (on a scale 0 to 10, where 0 is not likely at all and 10 is very likely)

2. Why did you give that score?

We have received 31 answers from 31 recognized thought leaders, consultants, and great doers from all over the world across industries. Then we divided the answers according to the categorization of NPS – into promoters, passives, and detractors. 2 answers are marked “in doubt” because the participants provided the range of scores or no score at all.

Having mentioned that, I couldn’t help but calculate the Net Promoter Score of the Net Promoter System. 15 experts are very likely to recommend Net Promoter System to their CX colleagues (they are marked as”promoters”) and 6 wouldn’t do that (“detractors”).

That makes the NPS of NPS 32. 

Nevertheless, you probably already know that a score is just a number. What matters is why the score is as it is.

I let you dive into exploring the thoughts and opinions of the leaders and experts.

Jeanne Bliss

Customer Experience Practitioner & Pioneer, Keynote Speaker, and Author

Why? “I would recommend NPS but only as part of a listening path methodology.   Not as the only system used.  Companies need to employ multiple sources of information to tell the story of customers’ lives. And to prevent score chasing. The maturity of the organizations ability to use this rich information and leadership greatly determines the outcome of this or any listening system truly driving culture change that leads to improved customer and employee experiences.”

Blake Morgan

Customer Experience Futurist, Speaker, and Author

Why? “NPS is simple, to the point, and quick. This will tell companies if they are doing a good job or not. If they are not doing a good job they can quickly fix the situation with the customer.”

Ian Golding

Global Customer Experience Specialist and Certified Customer Experience Professional

Why? “Whilst I would like to say 10, in reality, it depends! If the recommendation question makes sense for the nature of the business, its industry, and customers, then I would score a 10. If it does not make sense, due to the question being inappropriate for the business or industry, I would say 0! As a rule, I would always suggest collecting NPS as one of several metrics (including CSAT and Customer Effort) unless there is a compelling reason why you should not. I would NEVER rely on NPS as the only measurement of customer perception.”

Jeannie Walters

TEDx Speaker, Customer Experience Expert, Trainer, Consultant, Podcaster

Why? “Tracking feedback of any kind helps leaders recognize when things are going well and when they are not. BUT it’s important to understand while this is a good tool, it’s not the only tool. Understanding different results and how they can blend together to help you see the big picture is critical. There is no perfect metric. People are nuanced and context is critical to really understand what customers want you to know! So while I’d recommend this as a tool for those who want to gather the right feedback, I wouldn’t say it’s the only one. Leaders need a toolbox to see the entire picture.”

Peter Lavers

Customer Experience and CRM Expert

Why? “NPS is NOT the answer to everything like some would have us believe – especially in corporate / B2B key account management where long-term trust and relationship quality are key. I’m also concerned about a) it’s a poor diagnostic, b) it turns a customer’s story into a number, and c) that the arguments for Customer Effort Score also have merit. So the answer is that I MAY recommend NPS, depending on my client’s situation & strategy.”

Sue Duris

Customer Experience and Digital Marketing Consultant

Why? “For organizations just starting with CX, NPS is a good gauge of loyalty. First, implementing NPS is fairly simple, you ask the NPS question along with its followup question (why did you choose that score?) Second, it’s a quick way for you to get a feel for who your promoters, passives, and detractors are to perhaps do some segmenting around that and develop campaigns to help convert detractors to promoters. Companies shouldn’t stop there, though.

NPS isn’t a one-and-done endeavor. NPS should be taken at regular intervals so you can monitor performance. Watch the trends. Is the number improving or declining? Focus on why and how the number is changing, and what is attributing to that change. This will give you the intel on how to take action to improve your relationship with the customer and improve their experience.  Treat NPS as part of a greater whole. NPS should be a part of your overall CX dashboard. Include NPS with CSAT, CES, FCR, employee engagement, emotion, etc. Based on your business, you may have additional KPI’s that you might want to add to your metrics dashboard. You won’t be able to see a complete picture of your customer experience without looking at all metrics. You want to see a complete view of your customers, what’s going on, trends, etc. to be able to identify actionable insights on which you can take action to improve the customer experience.”

Janne Ohtonen

Director of Customer Experience Management at Openet

Why? “This question cannot be answered with a single score as it depends on what my cx colleagues would be working on. My answer would be depending on their objectives, industry, products, the from a and services. For example, if they worked for the travel sector, it would make sense to ask NPS. But if they sold toilet paper, then I don’t believe NPS would be the best metric as it’s not likely people will be recommending TP to their friends and colleagues. Sure, NPS question is a hypothetical one (“How likely would you be to recommend…”), but I believe the best use of it is in situations where it is relevant and can be used literally, too. NPS System is not fit for all applications, but it is compelling when used right. However, nothing stops you replacing the question with something more appropriate for your business and using similar kind of systematic approach to serving the customers better through it. For B2B companies this answer gets even more complicated, but I’ll leave that for later, perhaps over a pint some day…”

Julia Ahlfeldt

Customer Experience Consultant and Strategic Leader

Why? “Overall, the NPS metric has been a positive addition to our profession, but it is not without faults, and it is sometimes used incorrectly by businesses. On the positive side, NPS provides a consistent methodology to measure consumer affinity for a brand. It can be used across sectors, and its prevalence has helped CX professionals garner the support of business leaders. On the downside, some organizations have latched onto NPS as the only CX score that matters, which can be counterproductive. NPS is a helpful strategic barometer for consumer opinion, but it doesn’t tell us why consumers are happy or unhappy. It’s also a lagging indicator, meaning it doesn’t help teams proactively flag and address customer experience issues in real-time. All of this goes to say that NPS can contribute to a brand’s customer-centric evolution, but the metric is not a silver bullet and should be used in conjunction with other insights. NPS can provide clarity on the status of CX efforts, but the voice of the customer lights the way to improved customer journeys.”

Chip Bell

Customer Loyalty Keynote Speaker, Trainer, Author

Why? “It thinks NPS has done a great job of elevating the topic of customer loyalty to C-suite conversations.  As NPS has found its way into leadership metrics, it has sharpened the focus on the customer’s evaluation, thus the importance of delivering superior service.  The other side, however, is that it can lull leaders into thinking it is all about the “score” and getting customers to indicate their “intent to recommend.”  Frankly, who cares what customers say they intend to do; what matters is what they actually do (behavior).  Also, there are many more factors important to understanding the customers’ evaluations other than their answers to “the ultimate question.”  Working with a large client we found that 1/3 of their customers indicated they would “never recommend,” no matter how intense their loyalty.  Working with another client we found the NPS question yielded a score in the low nineties (a call for celebration), yet a parallel question, “Have your recommended…” was in the low forties.  It was a wake-up call to leadership.  Finally, there are research studies that question the validity of the science behind NPS.”

Steve Towers

Customer Experience & BPM Visionary, Keynote Author, Board Advisor & Judge

Why? “The bias inherent within NPS makes the scoring highly subjective. Plus, NPS samples are insufficient i.e. of the total customer base how many responses would we need across a range of touchpoints to make NPS statistically valid? NPS is often misused to bonus people, creating sub-optimal customer experiences and the score begging problem again.

NPS can be likened to taking the temperature in weather forecasting. It is a bit of data, however, in weather forecasting, there are so many factors (wind, direction, strength, barometric pressure, humidity, dew points, etc.) we must measure to understand (a) what is the real weather, and (b) what does that mean going forward. Using NPS is like predicting the next ice age based on today’s temperature taken in isolation.”

Thomas Laursen

Chief Consultant at Customer Agency, NPS Certified Associate

Why? “Whether it is NPS®, Customer Satisfaction, Customer Effort Score, or something else, I would always recommend collecting customer feedback to gain insight about how customers are impacted by the experiences you leave with them.
Obtaining a score is less important though. It is just a number and will change nothing for your organization. Only if you choose to act on customer feedback, will you be able to achieve positive results that impact the customer experience. The Net Promoter System provides the opportunity for you to act by closing the loop on both a tactical and strategic level. But there are other important aspects to consider as well if you strive to create great customer experiences. Some of the aspects I work to uncover as a consultant are these: Is your organization ready to embrace change? Have you identified where to focus on the customer journey to create the biggest impact? And are you able to concretize your actions and finally monitor the impact of those actions on the customer experience? Addressing these questions is paramount, certainly, if you want to use customer experience as a differentiator.”

Mike Wittenstein

Management Consultant and Managing Partner at Storyminers

Why? “NPS is great for companies who are just beginning to look at their customer’s experience and don’t know where to start. An NPS score is like a pointer. If you use it, it will point you to problem areas that matter to customers—but it doesn’t do the work for you!

Many people think that getting a better score is the point of NPS. It’s not. Creating a better business that delivers more value to customers is the real point. As recent industry surveys show, NPS scores don’t reward companies that ‘game’ the system. NPS scores reward outcomes, not efforts.”

Adam Toporek

Customer Service Expert, Speaker, and Author

Why? “Too often people use NPS as a standalone metric without using the many pieces of the puzzle needed to make it successful. However, the Net Promoter System — which includes things like the timing of surveys, transactional versus relational NPS, and closing the loop — can be an effective approach to improving customer experience. Of course, no single metric can ever give a comprehensive view of an organization’s customer experience and no single system will be the perfect match for every organization. Context is everything, but when used well, the Net Promoter System can be a powerful tool for customer experience improvement.”

Abdalla Elbadawy

Customer Experience Manager at HUED, Leading Consulting Firm in The Arabian peninsula

Why? “Conceptually, NPS is a good indicator for starting CX measurement discussions considering its context whether it’s on a product/service “operational” or a brand level “strategic”, nature of the product “service-good continuum”, frequency of customer interaction with the company, frequency of NPS measurement rounds, etc. But, NPS can also be misleading if it’s not a part of a more comprehensive VoC program amongst other measurement tools and metrics, and ideally this VoC program to be part of a complete “Market Information System”.

On another note, NPS has also been a target for criticism from both academic and business worlds and that’s why I believe Satmetrix’s NPS needs to be redesigned and

I believe they started to do so.”

Dougie Cameron

Customer Experience and Contact Centre Consultant

Why? “First of all let me say that I think NPS is better than nothing for measuring customer experience, but it is far from a panacea. For that reason, I would score it a 6 which is, of course,100% worse than a score of 9 in NPS maths. Obviously, I scored it 6 precisely to show the folly of this metric.

My main problem with NPS is that it is pseudo-science packaged as a sophisticated tool. Let me explain myself.

Anyone who has run an NPS system will know that, unless it is used over very large samples and trends averaged over long time scales, then it is an exceptionally volatile measure. And do you react to every bump in a volatile measure? Of course, you don’t.

Why is it so volatile? Because a 6 is worth 100% less than 9 and is worth the same as zero – such a highly geared measure will always be impossibly spiky.

Organizations that are focused on this metric tend to be NPS-obsessed rather than customer-obsessed. They are literally looking in the wrong direction – buried in spreadsheet analysis, always on the back foot, trying to understand “why?”. How can you understand what is happening to the customer experience with a spiky trend? You can’t!

For me, the mean average of a 5 point scale is a better directional indicator of customer experience over time. Outliers still need attention but the simplicity gives executives and the front line the best timely indication if things are getting better.

So, NPS is better than nothing. But only just.”

Andy Hanselman

Customer Experience Expert and Speaker

Why? “I love the simplicity of NPS and it’s a great way of ‘taking the pulse’ of a business when it comes to customer satisfaction. The best businesses build it into the way they do things and get ownership at every level, and that’s the key. It’s about integrating it into ‘the way we do things around here’ and it’s relatively easy to do that compared to other feedback mechanisms.  Business leaders tell me that they also like the fact that they can compare their scores to other ‘benchmark’ businesses and this brings a tangibility to it.  Interestingly, I encourage businesses to combine NPS with one other question: “Are you / were you COMPLETELY happy with what we’re doing do/did?” followed by “Why / Why not?” It’s a tough question, but helps get real insights into what customers think.”

Shep Hyken 

Keynote Speaker and Bestselling Author

Why? “I love the simplicity of NPS. The Net Promoter Score (not to be confused with the Net Promoter System) gives great insight into intent to recommend based on experience. You can assess if the experience was met or exceed expectations, was just average or less than stellar – with just one simple number. But, that is just the start. The “system” helps you gain understanding and take action on the number (the result of the survey). Knowing the number is one thing. Knowing the “why” behind the number and how to use it to gain a competitive advantage is another. I’ve been a Fred Reichheld and NPS fan since the mid-1990s when I first read “The Loyalty Effect.”

Ted Rubin

Leading Social Marketing Strategist, Keynote Speaker, Brand Evangelist

Why? “I think companies desperately need to understand how consumers think about them on a regular basis. Customer Experience is now, more than ever before, the key to success. Brands need to start measuring and looking at how a strong Social presence affects their NPS quarter to quarter. Getting better returns from social involves creating a social-by-design strategy that incorporates three core elements into the process…

• Community: A Network Gives You Reach, But A Community Gives You Power! Networks Connect… Communities Care!

• Conversation: Old marketing was dictation… new marketing is communication. Change from Convince & Convert to Converse & Convert

• Identity: If you are only focused on the Money… You risk completely overlooking the People.

For existing products, it is defining how existing social platforms (Facebook, Twitter, Instagram, Snapchat, etc.) can support achieving business goals (ROI) and grow or communicate the value that is accrued by a brand due to nurturing a relationship (ROR, Return on Relationship). NPS can be a key to this understanding and evolution.

Being social drives engagement; engagement drives loyalty and advocacy, and both correlate directly to increased sales.”

Jim Tincher

Journey Mapper-In-Chief, Heart of the Customer

Why? “Let’s start with the score. NPS isn’t a score: It’s a religion. Participants advocate that it’s the one true score and that those who don’t follow it don’t get it. There’s nothing wrong with the score, but there’s also nothing magical about it. However, like any good religion, NPS does give you guidance to do the right thing. In this case, that’s the Net Promoter System – the process to follow up with people who are unhappy and work to fix that.

Organizations can have great results if they are disciplined in following the system. But the same can be said for companies using the Customer Effort Score or even old-fashioned satisfaction. In fact, MaritzCX conducted a study (Customer Experience Maturity Leads to Financial Gain) that showed that which score you used had little impact on your results – it was how you used the scores that mattered.

To summarize, there’s nothing wrong with using NPS. But there’s nothing particularly magical about it, either. What’s critical is the discipline to focus more on engaging customers than to chase a specific score.”

Mitch Lieberman

CRM Industry Advisor, Speaker, Award-winning Blogger

Why? “Satisfaction is determined by the Experience as seen through the lens of Expectation.” NPS is a combination of two things: a measure of my personal satisfaction with a particular product or service AND whether or not I want to then recommend it to someone else. I have been part of organizations that use NPS and where it shows pretty lines on a chart, it does not correlate with either loyalty nor revenue.

I will state up front that I am not a big fan of NPS because it is overly simplistic. The first problem, within the definition “would you” – there is one word is the difference between a passive opinion when asked a question and the more important question that should be asked “will you” active. People are social and emotional, the nature of who we are, simple. When one does some primary research, it is clear that not everyone who expresses satisfaction with a product or service will recommend that product and not everyone who recommends a product is satisfied with it, this is especially true for luxury items as well as my example below.

Example: I recently had the interior of my house painted. I was extremely satisfied with the outcome. The finished project exceeded my expectations, the project was completed within budget, but it did take a bit longer than expected. In the end, there is no chance I would recommend the company; the owner did not treat his employees well, it had nothing to do with the product or service.

Summarizing the example as it fits or does not within NPS; The emotional elements (emotional job) of the interactions with a product or service are among the most important contributors to whether someone is satisfied (the customer experience exceeded expectations) with the product or service. Satisfaction is much closer to repeat purchases and loyalty, thus to revenue – therefore, with the increasing commoditization of certain types of products, it seems that a better approach would be to track satisfaction separately.

Recommending a measure such as NPS to another organization requires a deep understanding of their product, service, customers, and those customers jobs, both practical and emotional.”

Jeremy Watkin

Director of Customer Experience at FCR

Why? “I’m fairly neutral in my view of NPS for a couple of reasons. First, before recommending it to a colleague, I want to understand what their goals are. If they want customers that are willing to recommend the company to a friend, then absolutely I’d recommend NPS. There might, however, be certain companies and situations where Customer Effort Score or Customer Satisfaction are more appropriate. Another reason I’m neutral is the customer feedback loop. The feedback we receive from customers and the means by which we close the loop with them is quite possibly more important than the method used to collect it. Furthermore, be sure the survey is integrated within your customer experience and simple and to the point in order to maximize the response rate.”

Sean Crichton-Browne

Head of Global Partnerships & Customer Engagement at MarketCulture, Keynote Speaker, Workshop Facilitator

Why? “I have seen NPS used well by some companies that do it across the entire company internationally and externally. I have the seen others use it in silos and where they want to use it which can manipulate the score. Imagine I am an insurance company and will only score those that we agree to pay and not those that we don’t. NPS is only an indicator of whether or not the company is moving in the right direction and it takes customers to respond to make it work. More don’t respond than respond. If I collect only the scores, it does not tell me what I have to do to fix it. I think a lot of companies hide behind the score and really don’t do much to fix it.”

Davide Chiavelli

Customer Experience Management and Analytics Consultant at CIQUAL

Why? “NPS is proven to be directly correlated with companies’ growth, so its use is a very sound business practice (Bain made quite a few studies on it, on top of the fact they invented it as a metric!)”

Jane Treadwell-Hoye

CCXP and Managing Director at epifani

Why? “NPS is merely a single point-in-time measurement tool and yet many people bank their entire customer experience strategy on this. Too few organizations focus on the verbatim comments, ie the actual voices of their customers, and fixate on the number. Senior Leadership teams are easily distracted by the number and fail to appreciate that it’s the tangible actions that you take, based on the insights you gain, that drive the changes that will improve the number. Focus on the experience you are delivering the number will take care of itself.  I am also always keen to ensure that any strategy off the back of an NPS program includes targeted approaches for all 3 answer groups – the detractors, the passives, and the promoters. You must have clear plans of action for each group as activating your promoters and recognizing the power of their advocacy for your brand is as essential as addressing the issues raised by your detractors. If you focus on the experience you are delivering the number will take care of itself.”

James Dodkins

CX Revolutionist, Keynote Speaker and Author

Why? “NPS surveys (as well as many other feedback mechanisms) are self-selecting. They are retrospective. They aren’t specific enough. You mostly get extreme results. The results are easily swayed and turning complex emotions into numbers is a very inexact science. Nothing shows a customer how little you care about their actual situation faster than trying to reduce their feelings and emotions to a number that fits into a predetermined scale.

Basically, it doesn’t matter what discipline or what platform you use to measure customer feedback, if you need to measure how well you are delivering a customer experience through feedback surveys you are doing something wrong. If you truly know, your customer, their needs and successful outcomes you would already be measuring the things that contribute towards satisfaction and loyalty in real-time, during the experience.”

Michael Redbord

Vice President and General Manager, Customer Hub at HubSpot

Why? “NPS is simple benchmarkable, and consistent. The key is in *how* you use it. When leaders overfocus on the score, NPS can become a frustrating corporate goal setting exercise. When leaders focus on the process of feedback, you end up putting the customer first. And, in fact, putting the customer first is what makes his score go up over time, too! Many, many organizations aren’t set up to broadly intake, deeply understand, and fully action customer feedback – NPS can be an excellent vehicle to put your customers first if done correctly.“

Andrew McFarland

Senior Vice President, Chief Customer Officer at Black Box

Why? “Two notable advantages to NPS are its simplicity and notoriety but what I appreciate most is that NPS is judgmental and predictive.

NPS is judgmental because it assigns a value to each response. The usefulness of NPS comes from the research that has gone into correlating scores with marketplace value. Customers who rate you low (detractors) harm your company while those who rate you high (promoters) help your business.

As a comparison point, consider traditional surveys. Scores range somewhere along the good – bad continuum and a company might compute an average score of 8.8 and declare victory. But how valuable is 8.8? And what about the customers that pulled the average down? This method fails to indicate how good or how bad.   The other key value of NPS is its predictive nature. Because of the words “likely” and “would recommend” the question asks about intent and is forward-looking. Traditional surveys help understand how your company did but fail to tie past performance to future results. NPS bridges that gap to give companies a powerful tool to transform their businesses.

Regardless of which system Customer Experience practitioners use they must ensure their company is aligned to deliver an “intentional” experience they choose to deliver to the customers they choose to serve. Otherwise, the “accidental” experience will be reflected in entirely predictable survey results.”

Steve Curtin

Author of Delight Your Customers, Fan of Exceptional Customer Service

Why? “I value the NPS because it’s based on an easy-to-understand question and produces an easy-to-interpret score. Too often, organizations overcomplicate the process of gathering customer feedback by asking too many questions and accepting the abysmal response rates that result from the survey’s complexity. And then, once obtained, the feedback is often marginalized by ignoring the survey respondents, the feedback itself, or both. While other worthwhile indicators of customer experience quality exist (E.g., intent to return/repurchase, value for the price paid, customer effort, etc.), if you’re going to ask one question, I think the NPS question is it.”

Hayk Asriyants

Top 100 changemakers in Central and Eastern Europe

Why? “There’s several frameworks, metrics, and other tools to measure and manage customer satisfaction and customer loyalty, but Net Promoter Systems stands out among them with its comprehensiveness and universality.  It can be used in both B2C and B2B settings, but it also comes in handy for HR and OD professionals to improve the employee experience — even the candidate selection and recruitment process.

Net Promoter System has another important advantage as it engages the whole organization — from frontline to senior executives. It recommends processes to promote the individual learning based on feedbacks received after interactions with customers, and it also helps prioritize cross-functional initiatives aimed at improving the customer experience.  Last but not least, it’s a dynamic, constantly evolving framework. Its authors (who have generously “open-sourced” it) and tens of thousands of practitioners are in a dialogue through research, podcasts, and informal online communities.”

Bill Macaitis

Advisor & Board Member, former CMO of Slack and Zendesk

Why? “I am a huge fan of NPS. NPS gives you so many incredible benefits, like the simplicity or the base for your incentive system. With that, you can fundamentally change your company’s direction. If you’re a customer-driven company, and you’re not measuring NPS yet, that is one of the best things you can do to finally transform your company.”

The post We Asked 30 CX Influencers if They Would Recommend the Net Promoter System appeared first on Lumoa.

How do you make important or day-to-day consumer decisions in your life? Whom would you consult if you were choosing a hairdresser’s salon or a new car to buy?

83% of customers would trust recommendations from the people they know: colleagues, family, friends, etc. Often, we believe that people close to us can give us better advice when choosing a product or service.

According to the same research, at least 66% of customers trust other consumer opinions posted online and according to another research, 58% of consumers said they have recently (within the past five years) been leaving more and more online reviews based upon customer service.

That proves that referral marketing plays a more and more important role in business strategy.

The question is, how can you measure it?

The Net Promoter Score: what is it?

The Net Promoter Score (or NPS) was designed by Fred Reichheld in 2003 to measure loyalty. At that time customer experience management was still unknown to most businesses.

Gradually NPS gained popularity and was implemented everywhere: from customer service interactions to every individual customer touchpoint. People have been obsessed with “the only number you need to know” since it was developed, and according to our net promoter score statistics research, around 64% of companies use NPS to measure the customer experience. This is not a surprise, because NPS gives a very simple and easy-to-track system to allow you to follow your most and least loyal customers.

It is likely that you have already seen it on a regular basis:

NPS consists of two questions: a scoring system (typically asked with “How likely are you to recommend (brand) to a friend or colleague?“) and the “why” question. The scoring system divides all respondents into 3 groups:

• Promoters (answered 9-10): typically loyal and enthusiastic customers likely to recommend you

• Passives (answered 7-8): currently satisfied but easily tempted by your competition

• Detractors (answered 0-6): unhappy customers, a high likelihood of negative word of mouth, a high churn rate

You can calculate the Net Promoter Score by identifying the difference between the percentage of promoters and the percentage of detractors. For example, if 65% of your customers are promoters and 12% are detractors, NPS is 53.

Note: NPS can also be negative if the percentage of detractors is higher.

Many companies are focused on following NPS as a number. It’s no surprise that they do, as according to this research of the London School of Economics an average NPS increase of 7% correlates on average with a 1% growth in revenue. Isn’t that a solid reason to think about how to increase your NPS?

Don’t fall into this trap.

If your company focuses on following the score only, you will very happy if the NPS goes up. But what will you do if the score starts to fall? Many companies panic: customer research is commissioned, task forces established, and people start to read the feedback just to understand what is going on.

Keep in mind that NPS only becomes a truly valuable metric, if its “why” question is properly collected, analyzed and heard.

The “why” question is the golden source for your customer experience management. It shows you why a customer gave this or that score, opens up a dialogue, and, in a way, lets you dive into your customer’s head.

To summarise, NPS can be very efficient as it provides both a quantitative metric to set targets against and follow, and also free text feedback for insight generation. At the same time, an NPS survey is simple and short enough for consumers to respond to regularly.

How to collect NPS: Best Practices

Here we’ve collected the best practices, tips, and most common problems our customers come across when implementing and, later, using NPS.

1. First things first: Get that wording right!

The more popular NPS got, the more misused the metric became. The Net Promoter System is an open source system, which means you can change and customize the questions for your own purpose. Unfortunately, this sometimes leads to a misunderstanding of customer feedback, and the voice of the customer can be ignored as a whole.

“How likely are you to recommend (brand/product name) to a friend or colleague?”

Net Promoter Score allows you to switch between your “brand” to “product”, if that follows the reason for your survey. If you ask about your brand, you will receive measurements of brand loyalty, and if you ask about a particular product or service, you should receive more product-specific feedback.

NPS doesn’t tie you to “a friend or colleague” wording. You can easily reference any individual or role that is suitable for your business. The options include “a family member”, “a manager” or “a classmate.”

“Why did you give that score?”

The “why” question that brings you closer to understanding your promoters, detractors, and passives is sometimes changed to “tell us how we can improve” or “let us know what you liked most about us“. We do not recommend this change as it leaves out all the negative reasoning, and brings you further away from understanding the real Voice of Customer.

The scaling system

Last, but not least, some of our customers asked us if they could change the response scale to 1-5, 0-7, etc. Is there a reason to do so? If you change the response scale, all the analysis and published literature would still be based on the 0-10 scale. You may lose some of the value of your data. For more than 10 years, the 0-10 scale has been proven to work.

In the end, however, the one thing that matters most is consistency.

If you insist on changing the wording or scaling system of NPS, please do that with all your NPS activities. Don’t mix different types of questions or scaling systems, as it’s not only hard to compare, but also costs much more to maintain.

2. How to collect NPS

Collecting Net Promoter Score in the right way ensures that you reach your goals. It can also nicely increase your response rates if you know when and where you need to ask for feedback. That being said, let’s think about…

When to ask for feedback?

Many companies often start measuring NPS at the one touchpoint (which is often customer service, as it is the most obvious option) that they think is the most important. Then they fix the issues for that touchpoint and sometimes wonder why it doesn’t bring any results or brings results different from what they expected.

In order to avoid this mistake, the first must-do is to measure the holistic experience of your customers. Don’t go into measuring the success of your customer service or any other touchpoint before you have actually identified what your customers love and hate about your products or services overall. You can then use that data as a starting point when deciding what areas you need to focus on for improvement.

Identify the best time to get feedback on the overall experience and relationship. This could be a month after onboarding, and then annually or bi-annually at the onboarding anniversary for example.

Once you have your baseline of customer feedback, you can then ask about the most critical touchpoints identified, requesting very specific feedback (e.g. about your new mobile app, your website, customer service interactions).

NPS should be part of your ongoing customer experience management process where you collect feedback, analyze it and use the insights to help you make decisions and improvements so you can close the loop with your customers.

Where to ask for feedback?

The answer to the question “Where should I ask for feedback from my customers?” largely depends on what you want to track with the feedback. Do you want to measure the overall experience? Do you want to measure the performance of one particular touchpoint? Do you want to measure the performance of an app, a product, or the brand reputation of the whole company?

Here are some ideas you could use:

The general rule is to always use the most natural channel available to ask for feedback from your customers. If you want to measure how satisfied your customers are with your app, it makes sense to ask for feedback in the app itself.

3. How to analyze Net Promoter Score feedback

Don’t end your feedback analysis by calculating the score. Understanding why your customers are happy or unhappy is the main reason you should ask for feedback in the first place.

We know that analyzing tens of thousands of individual feedback comments can be tiring, inefficient, and costly from a resource perspective. That’s where NPS software platforms and text analytics come into play.

Simple sentiment analysis of the text can divide a feedback comment into three buckets: positive, neutral or negative. Machine learning technologies can detect the degree of sentiment as well: if someone hates your product, the negative sentiment is stronger than if he or she just dislikes it. Similarly, if someone loves your customer service personnel, the positive sentiment is stronger than if they simply like them.

Let’s take a look at this comment:

The machine would likely give you the following results:

Topic                                  Sentiment

Camera software                 Strongly negative

Product general                   Strongly positive

Performance                  Somewhat negative

Design                            Somewhat positive

These results give you a better understanding of what the user was saying, and together with the other thousands of comments, the data becomes more significant so that you could use it in your product and business development in the future.

That’s just one example of how the why question of NPS helps you to understand the reasons behind the score.

Here are a couple of our findings when it comes to text feedback:

• Customers typically mention the most important things on their minds in the feedback.

• Free text form is great in surfacing topics that matter most to consumers – asking about all topics using closed questions would require an extremely lengthy questionnaire which can result in lower response rates.

• Free text analysis typically includes categorizing the feedback to better understand which topics are talked about and assessing the sentiment of the sentences. This basic analysis can then be expanded on e.g. by calculating the impact of each topic on the NPS.

Recommended reading: 
15 Tips on how to send NPS email surveys you can implement right away
7 Ways to increase response rates on your NPS surveys
7 Most common Net Promoter Score mistakes and how to avoid them

Learn from the best, or NPS case studies

Often businesses pose the question: “How can we improve NPS?“. That is the wrong question. What those businesses often forget is that a higher NPS won’t necessarily bring you any business results if you don’t understand or act on your customer feedback.

We asked Diane Magers, CEO of CXPA, how to tie NPS and customer experience to business value:

“You can correlate NPS to better business results such as revenue and retention. Focusing on customer behavior and measures can help you tell a more detailed business story. Here’s one example: imagine that you want your customers to go online and self-serve instead of going to the call center. Here you could measure the number of people who self-serve vs. call in and it has value. The online interaction might cost you 10 cents and a call might cost you 12 dollars (in the US). In this case, the better online experience is tied to the business value.“

In addition, the NPS segments: promoters, passives, and detractors, can quite accurately predict how these customers will maintain their relationships with the brand. To analyze the connection between loyalty and the Net Promoter Score, the Temkin Group conducted the research “Economics of the Net Promoter Score”  in 2016.

According to the research, promoters are more than five times as likely to repurchase from companies, more than seven times as likely to forgive companies if they make a mistake, and almost nine times as likely to try new offerings from companies. The same research also shows that promoters recommend a company to an average of 3.5 people.

Then we checked how the top performing companies do NPS and we found some surprising results.

Slack

Slack has set up records for growth and was one of the fastest companies to receive validation of $ 1 billion. All this time, NPS has been one of their core metrics. The company not only has aimed at high scores but followed up every single customer interaction and worked hard on making it just perfect.

Slack not only aimed for positive feedback, but they also worked hard on turning every single user into a promoter. By doing this, together with fast and quality, positive word-of-mouth marketing, Slack has achieved its amazing results.

We talked with Bill Macaitis, the man behind Slack’s NPS. Find 7 new tips from Bill for your NPS survey here.

Mention

Mention App was proud to share that with the help of NPS they managed cut churn by half in only 2 months. In addition, they have been individually following up with every promoter, passive, and detractor.

 

 

Airbnb

Airbnb completed research on “How well does NPS predict rebooking?”. The results were quite interesting, they found that customers with an NPS score of 10 were 13% more likely to rebook and 4% more likely to refer a friend than detractors.

Net Promoter Score Benchmarks

Although the subtitle says “benchmark”, don’t rush into comparing your scores with top-performing companies. Let’s find your targets step-by-step. Although I have repeatedly noted that you should never chase the NPS number, I don’t mean that you shouldn’t think about it at all. The Net Promoter Score is a great way to follow trends, and check up on how you’re doing, and the “why” question helps you to understand the drivers behind the trends.

So, how to take control of your Net Promoter Score?

1. Make sure your Net Promoter Score is positive

Having NPS > 0 is already a reason to celebrate. That literally means you have more promoters than detractors and that’s a good thing.

2. Aim higher every month/quarter

Compare your current NPS to your past NPS. Is it higher? You’re doing a great job. Is it lower? Find out why and how you can make it better next time. Building quality relationships with your customers is your business, make sure you get it right.

3. Now you can check the industry and regional standards.

Ideally, you should search for companies in the same industry and in the same region. Comparing your results across regions or industries might be a close-to-impossible thing to do, as the standards vary a lot.

For example, the US scores have been always higher than European scores because of the culture and mentality. If you want to compare European and American NPS scores across the same industry, CheckMarket suggests counting 8 as a promoter score and 6 as a passive in Europe. The scores in Australia are typically even lower because of higher consumer expectations.

To learn more about NPS benchmarks, check out this article: 
What is a good Net Promoter Score? – NPS benchmarks

Now that you know what score your company should aim for, let’s take a look at the top-performing companies from around the world.

Although the Tesla score of 97 seems to be unrealistic (yes high scores are a standard among electric automobile industry), the score of Amazon has been improved along the way. In another very interesting piece of research, Amazon was chosen as the most trusted brand among SMB vendors (there’re also quite a few surprising industry benchmarks in the same research).

To sum it up, the main idea is to benchmark NPS against your own past performance in the first instance, and then try to find trustworthy and relevant NPS benchmarks in your industry and your region.

The post How to Improve Net Promoter Score: The Complete Guide appeared first on Lumoa.

It’s not that easy.

Now, consumers are overloaded with surveys and content from businesses more than ever.  The typical customer survey response rate is often below 2%. How can you make sure that your response rates are actually higher than that?

Beware of timing

Timing is crucial. Often companies send out NPS surveys right after a customer has ordered a product. And… they get results on how good their online store is designed, not how good the product is. To evaluate feedback on your product properly, send an NPS survey after 1-2 weeks since the product has been delivered. Although there are no standards, the usual timing for NPS initial survey is 30 days after the start of the use of software or an app. Otherwise, timing largely depends on your business model, onboarding setup, engagement, and relationship with your customers.

Make it a habit

Ideally, you would be sending NPS surveys daily, checking up with both new and loyal customers. Although the timing for the first initial survey depends on what kind of business you have, later the surveys could be sent every 90 days or would depend on your customer lifecycle. The reasoning behind sending the surveys quarterly is that on average a detractor needs at least 90 days to leave for good and you need to follow up if you want to prevent this from happening. Plus, you’re not intrusive with everyday surveys and leave space for your customer to think about his experience.

Use a multi-channel approach

It might be confusing to figure out the most effective channel to ask for feedback. Should you send out e-mails? Or make a pop-up notification inside your software?

The truth is that reaching out to your customers by e-mail might lower the response rate, but stands out for more qualitative responses, and vice versa when it comes to the in-app surveys. However, an in-app survey would help you to find detractors better and will give you a chance to follow up and improve the experience of a user. After all, the customer comes first –  keep your relationship with them in mind when deciding which channels would be the best. Most often the best channel for feedback is the one your customer is used to when being in contact with you: in-app if they use your app, SMS if you ask for feedback about the phone customer service, etc.

What about copywriting?

Find a creative approach to market your surveys and get higher response rates. You could ask or hand it over to your marketing team. After all, the success of your surveys sometimes lies in such small details as head titles and subject lines of e-mails, as these are the first words to capture attention and are the only words a user sees on the mobile device. Still, don’t get too creative when wording the NPS question itself. Net Promoter Score is always asked in a standard way.

No additional questions

Adding more questions to NPS could cut the response rate in half. Consumers will tell you what drives their behavior and what is truly important. Make it easy to share opinions. Remember, that with each added click or question, your chances of someone finishing a survey drop by 50%.

If the additional questions are a “must”, do it outside your NPS survey. Target specific customer segments who might be impacted by the topic.

Be careful with incentives

As much as it might be tempting to offer an incentive to receive more responses, consider it carefully. Incentives can cause some bias in the results because some consumers would not think about the responses but just click through in order to get the prize. However, it is more important to get some feedback with a small bias than to get no feedback or very little feedback with no bias. So if you have a hard time convincing your customers to provide you feedback in a timely manner, a small prize can help. Luckily incentives are not normally needed in NPS surveys. This is because NPS surveys are short and easy to answer. Companies doing long customer research surveys are more typically forced to use prizes to get their response rates to a reasonable level.

And finally…

Golden rule #1: Make it personal & follow-up

If you send surveys by e-mail, make them personal. Starting with the e-mail design, insert the name of the person you are going to ask. Then, send an e-mail from an individual instead of a “no-reply” e-mail. The chance that you’ll get an e-mail reply is still low, but it makes a psychological difference.

After you have received a reply, do a follow-up. Ideally, you would respond to every single customer manually, but in order to save time, you could write automatic replies for each category of customers, depending on their scores and feedback. Building personal relationships with your customers will both raise the response rates in the future and the scores themselves.

The post 7 Ways to Increase Response Rate of NPS Surveys appeared first on Lumoa.

Best implemented, NPS starts with employee training and ends with follow-up actions taken by the company. The common NPS mistakes will make sure you skip NPS problems and ensure the future success of your company to improve customer experience.

1.    Chasing the score

Once you have gathered the information, calculating the Net Promoter Score is easy.

The problem is that NPS is never about the score itself. It’s the system that matters.

You might track the trend, but what will you do if it drops or goes up? Knowing why your promoters love you or why detractors are unhappy is equally important if not more, than the trends. NPS is vulnerable to change and for you, it is beneficial to keep track of what drives it up or down.

Taking control over NPS by focusing on the follow-up responses will give you the most results out of NPS.

2.   Asking too soon/late

Don’t be that company that sends out NPS surveys right after the purchase. That could likely result in rating your website or visual designs, but not brand loyalty or customer satisfaction.

Let your customer use the product and form an opinion about it. Perfect timing depends on the nature of the product or service, however, in general, you should send an NPS survey 10 days after the customer purchase/use/delivery or 30 days after downloading the app.

At the same time, don’t ask too late either. For example, if you sell service or experience, it might be a good idea to actually ask for customer feedback right after the session. Otherwise, your customer might forget their initial thoughts of your brand.

3. Spamming with surveys

Asking too much much also be an issue. The practice of sending frequent surveys to the same customers is an absolute “no-no”. It is important not to flood the same customers with the surveys.

Solution?

Ask a small portion of your customers, then repeat the survey in some period of time by sending the NPS questionnaire to the other group of customers, repeat the process regularly.

4.   Focusing too much on detractors

Understanding detractors is important, but knowing why your loyal customers love you will drive your business to the top. You should spend at least as much time analyzing the reasoning behind promoters, as behind your detractors.

Promoters are the people who spread word-of-mouth advertising and literally will bring your business to the top. Learn how to analyze and communicate the strengths of your business, your competitive advantages that will attract more customers with the insights from NPS surveys.

5.   No follow up

Show that you care about your customer by following-up every response you receive. Ideally, this could be personalized message according to the score or the problem that your customer faced. In practice, create structured paths that customers follow depending on the feedback they give.

If the feedback is critical, then solve the problem and ensure your customer that you are listening. Following up your customer can influence your brand a lot, as the customer, who was heard, wants to give more feedback in the future and continue the relationship with your company.

The success of your NPS tracking largely depends on how you take actions based on customer feedback.

6.   Not training your employees

In order to take action, your employees must be aware of the Net Promoter System and implement it into their work routine. Educated employees, that deal with following up your customers, will produce higher results.

Organize customer experience workshops and training at your company. Although the training might be a high-cost investment, you will immediately see the results in higher morale and productivity of the employees engaged in the process.

7.   Keeping results within the survey team

Some companies keep the NPS results … within the team responsible for NPS.

The truth is that all the departments of the company influence customer experience. Both NPS and customer experience development should be visible and not be left out from the meetings.

The post 7 Common Net Promoter Score Problems & Mistakes appeared first on Lumoa.

In addition to these widely-used metrics, some companies prefer to use metrics specifically built and tailored for them. Unfortunately, unique metrics easily lead to unique and expensive tools and the impossibility to get any benchmark data without expensive tailored studies. Therefore, the choice of metric needs to be a compromise: it should support your unique business but not at the expense of practicality.

Some companies also feel that they need half a dozen customer experience metrics to really measure the customer experience in detail required. The problem is that, if you have several equally important customer experience metrics, none of them is likely important enough to really drive changes in your business. Complexity is often endorsed by the customer insights function. The rest of the organization would be happier with something simple and actionable.

Finally, there is a group of companies that just choose something that a random survey or rating tool they use happens to support. This can lead to anything and everything: five-star rating, smileys etc.

Why use NPS as your customer experience metric?

1. NPS provides a single, powerful, metric for target setting. It gives that one customer experience related number your leadership needs for target setting and bonuses. Don’t waste time trying to argue for five different meaningful metrics. By adding complexity, you most probably gain very little but lose the simplicity any organization needs to be able to cooperate and really focus on making the improvements needed.

2. NPS is short and simple for the customers to answer. With only two questions (recommendation score and the why-question) you should get most of the insights you need. When more and more people don’t have time or energy to answer any long questionnaires, two questions is a smart way to start.

3. NPS is an industry-standard metric. It is extremely widely used especially in companies that have tied some of the employee compensation to a customer experience metric. The standard nature of NPS ensures that there are benchmarks available. (Although be always careful with benchmarks, as the culture and context of survey impact the absolute level of the metric.)

4. The free text feedback is a great source for insights. If you have read any of my earlier blog posts, you have probably noticed that I consider the free text to be the most important part of NPS. When people are asked, why they gave the score they did, they typically highlight the key things on their minds. Both positive and negative. Analyzing the text helps significantly in understanding the drivers for the current customer experience.

If you read through my four criteria, you probably noticed that I didn’t say anything specific about the wording of the NPS question (How likely are you to recommend…). Over the years there has been a lot of arguing and controversy over whether that particular question is more powerful than some other question in predicting growth.

Since Frederick Reichheld introduced the metric and claimed it to be the one number you need to grow in 2003, a lot of effort has been put to criticize the wording of the question, the complexity of the score calculation and even the eleven-point scale it uses. Many people have also tried to find a metric with a better predictive power than NPS, but their success has been questionable. (If you are interested in the topic, check for instance this list. It includes studies both for and against NPS.)

I don’t mind. And unless you are a scholar, aiming to find the perfect metric, neither should you. For any company who cares about its customer experience, the key is to just choose a metric that works and stick to it. And by “works” I mean it should fulfill the criteria above: provide a number to follow, include text feedback for insights, enable some level of benchmarking, be simple for customers to respond and simple enough for your employees to understand.

The systematic follow up of the number and actions done based on the insights will bring in the value for you and your customers. The improvements you make driven by the metric are far more important than the metric itself.

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