NPS Best Practices: Drive Growth and Retention
Net Promoter Score (NPS) is one of the hottest topics in startups and tech right now. More and more startups are starting to implement an NPS system within their growth strategy to drive more user growth, retention, and engagement. So there’s never been a better time to discuss some NPS best practices so you can optimize your NPS surveys.
As we mentioned in our previous article, “User Retention Is More Than Just Collecting An Email“, growth is more than just acquisition. Too many growth hackers and founders spend all their time and resources on user acquisition instead user retention. The end result is a product that attracts customers in the short term but ultimately fails to keep them. This results in a higher churn and will slow down your company’s journey towards product market fit.
The best strategy for user growth is by improving user retention and referrals. Customer acquisition is more glamorous than user retention. Which is why it gets more hype from the growth community and people looking to get into the growth space. We’re surrounded by myths that all investors want to see growth or an uprise in user sign ups. But user retention needs to be a top priority if you wish to build a sustainable business.
There are a lot of strategies to increase your user retention and referral rate. But I’ll be focusing on how you can leverage NPS and turn it into a growth strategy that will drive you sustainable growth.
Using NPS To Create a Referral Engine
One of the most powerful things about NPS is that you can turn it into a referral growth engine. Just sending out a Net Promoter Score survey isn’t enough. You need to follow up and keep the momentum going. What’s the use of seeing a set of data with people who selected 9 and 10 if you’re not going to use it to your advantage? You have to mobilize your promoters by engaging with them. Your promoters are your advocates. They are the people who took the time to select an NPS response. They pretty much shouted that, yes, they are willing to recommend your product to their friends.
At this point, you can segment out all your promoters and then follow up with them asking them to refer your product to their friends. If you’re using YesInsights to create your NPS surveys, you can turn on our “auto follow up” feature and shoot all your promoters a discount or referral code. With this, you’ll be able to capture all your biggest fan boys and generate sales through referrals. Referrals and recommendations from customers will outperform any share button or social media campaign over the long term.
Using Net Promoter Score For Testimonials
Once a customer selects a response from the NPS survey, they will be prompted to a custom landing page where they can leave additional comments. Not everyone will leave a comment, but you will be surprised at how many people actually leave one. On average, we see that 5 out of 10 people that select a response from your survey will leave an additional comment. The ones that are promoters are more likely to leave a comment compared to the passive ones.
“One of the best ways to connect with prospects is by using stories from existing customers.” – Alex from Groovehq
It’s no secret: people tend to follow others like them. Marketers call it social proof. When we see lots of others doing something, we assume that it’s the correct behavior. Social proof isn’t everything, but it’s a good way to find a use case. For example, at YesInsights, we have use cases for marketers, customer success managers, founders, product managers and more. People might come across our site and think it’s a great and useful product, but they might not be able to find a use case immediately. This is where testimonials, blog post etc.
People might come across our site and think it’s a great and useful product, but they might not be able to find a use case immediately. This is where testimonials, blog posts, tutorial videos, and email mini-courses kick in. It helps when a potential customer visits your website and notices that another person in a similar role is using your product. You will see growth if you can help your leads brainstorm use cases.
Groove found that good testimonials increase conversions by up to 15%. As a founder myself, I’m more likely to try and use a product with a good testimonial from someone that I know or know of that’s an industry expert. Here’s a picture of a testimonial from Groove’s site.
Now that we know the importance of testimonials and how it can help drive user growth, let’s talk about how to get them with NPS. There are two ways you can approach this. You could analyze all the comments you get from the NPS survey and then personally email each one to ask for permission to use their comment as a testimonial. Here’s a testimonial that we have on our page that helps with driving e-commerce companies and marketers to our platform
The second way you can approach this is by simply sending a follow-up email to all your promoters (the ones that select 9 or 10) and asking for their use case and if it’s possible to use it as a testimonial. Remember, laying a solid foundation out as early as possible is a great way to drive long term sustainable growth.
Using NPS to create a stronger product roadmap
Everyone knows that the products with the fastest growth are the products that people love. The best products out there have a high user retention and engagement rate because users will keep coming back to it. Check out this slide by Kyle Wild of Keen.io. In the slide, he mentioned that “product is the ultimate growth hack”. I would argue that the customer experience is even more valuable as it is crucial for enhancing your product to your customers’ desires.
No amount of growth hacks will help your business develop if you’re losing customers because of poor product or service quality. Since user retention and growth is fueled by user engagement and product quality, making the best product over time is one of the best user retention and growth strategies.
A Net Promoter Score survey is a great way for you to dig into your customer’s brain and figure out what they really think of your product. It’s a quick and effective way to measure your customers’ thoughts.
NPS can help you build a better product roadmap, but you need to take action. One of the best ways to do this is by creating an NPS or one-click survey based on a new feature release. So for example, your company just released a new feature that you think your users will love. Now is the time for you to send out an NPS survey asking them for their feedback.
I would send out an NPS survey with something along the lines of, “How likely are you willing to recommend our new feature to your friends?” This allows you to gain actionable insights on how your customers are enjoying the feature specifically.
If the majority of the respondents are detractors (1-6), then you know immediately that this feature might not be the feature that your market wants. Instead of jumping to the conclusion of killing the feature, you can reach out to all the detractors and ask them what improvement would they like to see for that specific feature. Now you can plan accordingly and fix everything to build the ultimate product that everyone will love.
Another thing you could do is actually survey your customers prior to building the feature. You can do this by simply creating a one-click survey to ask your customers what features they would like to see being released next. This will help with the brainstorming process.
Using NPS as a way to find unhappy customers
Sustainable user growth comes with good user retention. According to Helpscout, a typical business only hears from 4% of its dissatisfied customers. That means that most of your customers that are unhappy with your product won’t ever speak up. Unless….you engage with them.
Sujan Patel, an experienced marketer and entrepreneur told us,
“NPS is one of my favorite growth tactics. I use it two ways. First to fix detractors & passive (unhappy customers) problems by reaching out and offering help immediately after someone gives us 1-8 score. I found that 10-15% of people who answered 1-8 have small issues or user error that can be instantly fixed. It’s a very easy & quick win. “
One of the best ways to retain a user is to provide an excellent customer experience.
3 in 5 Americans (59%) would try a new brand or company for a better service experience.
You can improve the customer experience by reaching out to them in a timely manner with a solution. You’ll be surprised at how many unhappy customers will be delighted and feel happy about your product when you provide excellent and quick support.
Conversely, a bad customer experience will push them out of your doors and onto the steps of the nearest competitor.
NPS surveys can help you locate these unhappy customers and then you can take action immediately and fix any problems that they may be experiencing. As soon as the customer feels appreciated, they’ll be more than happy to continue providing valuable feedback which can lead to a stronger user growth strategy.
Using NPS to Drive Employee Engagement and Happiness
The best companies tend to have the best talent. Talent retention is just as difficult as user retention in the startup world. It’s rare to see someone stick with a company for more than 3 years nowadays.
The best companies, like WPEngine, are known for being able to recruit talented people early. A stronger growth team emerged as time passed. An employee is more likely to stick with a company that they are proud of. They are more willing to hustle for a company that is growing. Check out this article on, “How Pandora’s Founder Convinced 50 Early Employees to Work 2 Years Without Pay”. Pandora’s staff believed in the vision of the company. They believed that there will be a bright future, which is why they stuck with the company.
Help your employees embrace the NPS spirit by tying their actions and performances to it to gain the maximum benefit. Keep everyone in the loop and constantly remind them that a rise in your NPS score means that customers are appreciating their work.
Using NPS To Turn Promoters Into Advocates
After all, these customers are ready to promote you they just need to be told how or a small nudge. What I like to do is offer these customers swag (free t-shirts, mugs, etc). Then ask if they mind to share on social media, write a review online, or tell a friend.
Adding giveaways to your NPS strategy is another way to boost user retention and growth virally. Customers love feeling appreciated. Actually, humans in general love feeling appreciated. You can create a win-win situation with your NPS Surveys by asking the customer for a favor in exchange for a free gift. In this case, the favor that you’re asking from the customer would be for them to fill out the NPS survey.
The lifespan of an individual being employed at a startup is decreasing over time. If that individual is a fan of your product, they will bring your product to another company and spread the word for you. An individual is also more likely to use your product for a longer duration of time if their friends are using it. Remember all those videos that we use to or still play with our friends? We play it because our friends are playing it. People use products for the same reason. They use it when they see that it solves a problem and that they see other people using it.
Using NPS for Data Analysis And Predicting Growth
Data is the bread and butter to growth. Cohort analysis, churn rate, life time value, repurchase rate etc…is super vital to every company. Data allows us to analyze the results from our test and to figure out what’s working and what isn’t.
Let’s take a look at Airbnb for example. Data scientists at Airbnb collect and use data to optimize products, identify problem areas, and inform business decisions. For most guests, however, the defining moments of the “Airbnb experience” happen in the real world. When they are traveling to their listing, being greeted by their host, settling into the listing, and exploring the destination.
So how does Airbnb’s team measure their experience? Using NPS.
“Currently, the best information we can gather about the offline experience is from the review that guests complete on Airbnb.com after their trip ends. The review, which is optional, asks for textual feedback and rating scores from 1-5 for the overall experience as well as subcategories: Accuracy, Cleanliness, Checkin, Communication, Location, and Value. Starting at the end of 2013, we added one more question to our review form, the NPS question.” – Lisa Qian (Airbnb)
The Airbnb team believes this is a more effective metric to determine the likelihood that a customer will return or recommend the company to their friends. They found that higher NPS scores generally correspond to more referrals and re-bookings.
Airbnb team can accurately predict if their guests will rebook again in the next 12 months 56% of the time. By adding the basic information about the guest, host, and trip, the predictive accuracy is improved to 63.5%. Then adding the review categories (not including LTR), they add an additional 0.1% improvement.
Net Promoter Score is an excellent way for you to create a sustainable growth strategy for your company. Sustainable growth is created through user retention and customer happiness. Is Net Promoter Score enough to delight your customers? Absolutely not. You can run an NPS survey and it won’t be enough to tell you everything. NPS is a great start, but it’s what you use along with it that counts. Make sure you’re following up and mobilizing your respondents. Get creative with the tricks that you can use to get the most result out of NPS. Combine NPS with one-click surveys and user research tools to get the most out of it.