How happy are your customers with your product or service? The Net Promoter Score can help you find out!
High customer satisfaction is one of the main pillars companies strive for, as your company stands or falls with how much your customers value or - let's hope not - detest your product. Your aim in this matter should be to assess how your customers feel about your products in order to respond proactively to potential stumbling blocks. But how do you tackle this issue?
We gladly share one of our best practices with you: the Net Promoter Score (NPS). For the third year in a row, we asked our clients the same question:
"How likely are you to recommend Teamleader to a friend or colleague?"
What is NPS?
NPS stands for Net Promoter Score, a metric that helps you measure customer satisfaction based on this one simple question. Make sure this question always remains the same, so you can mutually compare all results. Clients can answer this question with a rating of 1 to 10. The results of this poll can then be divided into 3 categories:
• Score of 1 to 6: detractors
Customers who rate your product 6 or lower, are called 'detractors'. Detractors can be considered as dissatisfied customers who harm your brand and obstruct growth through adverse publicity. However, these could also be users that requested a certain feature who, by providing a low score, hope for a quick fix.
• Score of 7 to 8: passives
Passives are a group of clients who are happy in general, but who won't necessarily recommend your product to others. They are often perceived as competition-sensitive and will tend to make the switch whenever a better opportunity presents itself.
• Score of 9 to 10: promoters
Promoters are your most enthusiastic clients. They would enjoy nothing better than to recommend your product and by doing so, stimulate your growth thanks to their positive attitude. More often than not, these are also your most active clients.
It goes without saying that you would like to see most responses end up in this range.
Calculating your score
You can calculate your Net Promoter Score as follows:
A small example:
Suppose that you have twenty customers at present. Ten of those give a score of 9 out of 10. Four clients respond with a score lower than 6, the remaining eight give a score of 7 or 8. Ten clients out of twenty equals 50% promoters, four detractors amounts to 25%. The passives are excluded from the Net Promoter Score. According to our calculation, your NPS would then amount to 50% - 25% = 25%.
Do note that the NPS is never shown as a percentage, but as a real number between -100 and +100. In this case, your Net Promoter Score would equal 25.
In general, a positive score (higher than 0) is perceived as a good result. If you score above 50, your clients are head over heels about your product.
Closing the loop
When sending out the NPS survey, your aim is to have as many clients as possible provide you with high evaluations. But the idea is to also provide a platform where clients can comment on their score. This will in turn allow you to gain an idea of where the bottlenecks are, and take appropriate action. Proper follow-up is just as important: you want to give back to the people who went through the effort of filling out your survey.
This process is called closing the loop. Afterwards, you contact all clients who've given you a score, regardless of the outcome. This creates the ideal opportunity to convert negative perceptions into positive ones, and turn detractors into promoters.
To provide a proper response to every client, we chose not to send out our mailing to all our clients at once, but rather to spread it out over a period of 30 days. As a result, our Customer Success team was able to process each response individually.
Our target audience
We always opt to send out the NPS to all Teamleader users. Not just the decision makers, because we feel that each opinion counts. Scores could very well vary within one and the same organization. We learn from this as well, and it helps us make our software as accessible and easy-to-use as we possibly can.
For the past three years Teamleader has sent out the NPS to its entire customer base at a fixed time. However, you could just as well choose to send out the NPS at a certain time to each new customer, for instance after using your product for 3 months.
There's a number of remarks to be made with regard to the question and the responses it generates. For instance, cultural differences could lower your score, as people might tend to score lower than 9 or 10, even when they are perfectly happy with your product. That is why a less strict version of the NPS was introduced: the NPS-EU. For NPS-EU, the target audience of promoters is slightly bigger: scores of 8 to 10 are perceived as very positive.
In addition, one should note that there is no causal link with your company's growth, NPS only measures the quality of your relationship with customers. And although a healthy customer relationship is an important step in the right direction, no direct links have yet been proven between a high Net Promoter Score and a higher growth rate.
Nonetheless, NPS is and remains a valid and objective criterion, which allows you to compare scores with those of previous years and those of other companies.
Of course, we do not want to deny you the results of our own survey. We sent this year's NPS survey to all Dutch-speaking Teamleader users, with a total response rate of 33%. These users provided us with a total NPS score of 20. A result that is highly similar to the one we obtained in 2014. This is a very positive outcome if we take our exponentially growing customer base into account.
The responses to our survey indicate that we still score high in terms of usability and support. Our strategy with Customer Success and Customer Service at its core, is definitely producing results.
Another minor side note: we used the more 'stringent' version of NPS, which only counts scores of 9 and 10 as promoters. This means that the vast majority of our target audience is considered passive. We know from experience and client responses that these don’t have to be indifferent about Teamleader, and that this is in fact a cultural phenomenon. A similar situation occurs with detractors: many of these users enter low scores because they would like a certain feature to be implemented. This is why we pay particular attention to this target group.
How do we follow up on the survey?
We consider all promoters and passives as being satisfied customers. Each and every one of them receives a thank-you mail in which we tell them how great they are. For actual promoters we take it one step further, as we will invite them to special customer events in the future. This is an important step: if a customer says he’s 90 to 100 percent sure he would recommend Teamleader, you shouldn’t let this opportunity go to waste. That's why we will also ask our promoters to bring people who may be interested in our product with them to this event.
We make sure our Customer Success team helps all detractors quickly. They went through the effort to provide their feedback, so proper follow-up is the least we could do. A personal approach in this case is mandatory: depending on the feedback, we give them a call to determine how we could work with their remarks in the future. These one-on-one interactions also strengthen the relationship between customer and supplier.
Try for yourself?
We encourage everyone to apply the NPS to their customer base. We're always willing to share/compare/discuss our results and exchange tips and best practices.