.png)
When buying from a brand for the first time, most people do the same thing: They'll phone a friend. Or a family member. Or search Amazon. Research shows that over 90% of people rely on recommendations from their closest connections, and 70% will consider online reviews about a product before making a purchase. This means no matter how good your marketing or savvy your sales team, you can't beat a glowing (or sour) review from a customer's BFF, sibling, or second cousin-in-law.
Fortunately, there is a simple way to collect these nuggets of feedback, distill them into a formula, and then use them to fuel your business goals: NPS (Net Promoter Score).
Net Promoter Score (NPS) is a method for measuring customer experience by asking one question, usually phrased like this: “On a scale of zero to ten, how likely are you to recommend us to a friend or colleague?”Based on your customers’ responses, you can place them into three categories: promoters, passives, and detractors (more on that in a moment).
The NPS framework was developed by Fred Reichheld of Bain Capital in the early 2000s, and over the last twenty years, extensive research has linked higher NPS with organic growth and long-term profitability. As brands like Apple, Amazon, and countless others have adopted the methodology, several NPS software solutions (like ours!) have been developed to help businesses (like yours!) collect, understand, and act on this invaluable customer feedback.
This guide will help you understand exactly what NPS software is—and what separates the good, the bad, and the great NPS software solutions.
NPS measures customer loyalty by asking what Bain refers to as the ultimate question (“How likely are you to recommend us/our product to a friend or colleague?”). Your customers will fall into one of three categories:
Once you’ve gathered this customer data, you can calculate your company’s overall score. It’s simple math: take the percentage of your customers that are promoters and subtract the percentage of detractors, giving you a score somewhere between -100 (yikes) to 100 (absolute perfection).
Discover the magic of adding a follow-up question to your NPS surveys like, "What is the primary reason for your rating?"This is where you get customer feedback gold. Their answers will give you concrete action items, as well as the chance to turn a poor experience into a great one.
While NPS can show you where you stand with your customers, it’s only the jumping-off point for honing your Customer Experience (CX) strategy. When aligned with other CX metrics like retention, repeat purchase history, and overall satisfaction, you can use NPS data to develop initiatives to save consumers from churning, increase customer referrals, and boost your bottom line.
Potential customers and investors pay attention to NPS because it speaks volumes about a company, far beyond its likelihood of referrals. While your Statistics 101 professor wants you to remember that correlation doesn’t equal causation, there are well-documented relationships between NPS and both organic growth and customer retention. Beyond the metric itself, fielding NPS surveys also gives businesses the opportunity to gather qualitative feedback from customers.
Promoters will share what they love about your business, passives will let you know what could be better, and detractors will share pain points. Identifying those common themes and trends should help inform your CX and product roadmaps.
As we've discussed, NPS is measured through a basic survey—a question where customers are asked to rate the likelihood of referral on a scale of zero to ten, and (ideally!) an open-ended follow-up question. Collecting that data is the first step, and most NPS software options use some combination of email, SMS text message, or through a targeted pop-up on a webpage.
Email and text NPS surveys are ideal for evaluating your customer's feelings at a specific touchpoint, like immediately following a purchase or appointment. Most NPS software solutions will integrate directly into your CRM (Customer Relationship Management), making the data collection much simpler.
A webpage NPS survey taps into a more general audience, but should be designed to fit smoothly into the brand experience so it doesn't feel spammy.
Check in with customers via an NPS survey a) every six months at a minimum, and/or b) when a new product, service, or experience is introduced. Good NPS software will help you achieve the right balance of getting frequent data without over-surveying individual customers.
It may seem like calculating NPS is fairly straightforward—straightforward enough to create and manage in-house. All it takes is an email list and a basic survey tool, right? Not quite. Collecting the data is only the first step, and calculating your score is far from the last. If you want NPS to actually make an impact on your business, you need to make sure your customer feedback is timely, accessible, and actionable.
Good NPS software is designed to give you robust capabilities to make the most of your feedback, including:
When shopping for your new NPS software system, use this checklist to make sure you’re getting the biggest bang for your buck. With a great NPS software provider, you should be able to:
Bottom line: NPS software should provide a great experience for your customers, deliver transformative insights to your business, and help you build an always-on customer culture.
Close the customer loop. There's nothing worse than taking a survey, giving feedback, and hearing crickets in response. NPS software makes it easy for your team to automatically engage customers directly from the platform—whether to send an automated thank you or have a conversation about how to make things right.
Understand your customer experience. What’s the biggest pain point in your customer journey? Are customers growing more loyal over time, or less? Are any of your products or locations failing to deliver on your brand promise? These are the insights you can get from great NPS software—information that will transform your CX strategy.
Transform your culture. The beautiful thing about NPS is how easy it is to understand. Companies that live and breathe NPS—that share real-time feedback on Slack, recognize employees who get rave reviews, and rally every team member around one simple metric—see an increasing obsession with customer experience.
Spoiler alert: AskNicely checks all the boxes on the list above! Our NPS software is the simplest way to gather, understand, and act on customer feedback. And you don’t have to take our word for it. Check out our 500+ G2 5-star reviews, or read some of the comments from our own NPS responses.
To learn even more about NPS, schedule a demo today. We’re always ready to answer your questions and geek out on customer experience!
