You’ve probably run into NPS surveys everywhere.
Maybe you’ve been approached in the street by a person armed with a clipboard and questions. Or perhaps you’ve been caught by a pop-up window demanding you to rate your experience of an online purchase? At times they even prompt you with a recommendation as soon as you land on the page – completely pointless.
You know what I’m talking about, right?
Net Promoter Score (NPS) isn’t some new metric. Back in 2003, Bain & Company developed the system to measure customer loyalty and satisfaction by how likely they are to recommend a company, product, or service to others. The NPS is based on this simple question: “On a scale of 0 to 10, how likely are you to recommend us?”
Respondents are put into three categories depending on how happy they are to recommend:
- Detractors (0-6)
- Passives (7-8)
- Promoters (9-10)
The NPS is then calculated by subtracting the percentage of Detractors from the percentage of Promoters, resulting in a score that ranges from -100 to +100.
For context, the average NPS score for B2B SaaS is somewhere between 31-50.
This single number is then supposed to provide organizations with valuable insights into their customers’ overall attitudes, and also act as a powerful indicator of business growth and customer retention.
Surely, a little too good to be true.
The Problems with Net Promoter Score
You ask a single question, “How likely are you to recommend us?” and expect your customers to encapsulate their entire experience with you in a single number. Things are more complex than that. Try asking someone to describe a twelve-course dinner they had with a single color. It just doesn’t work like that.
People Play Games
Many companies have resorted to gaming their NPS to inflate their scores. The tactics range from selective surveying of only happy customers to offering incentives in exchange for some positive feedback. Practices like this undermine the integrity of the NPS system and distort their customer satisfaction. Gaming the NPS leads to a misrepresentation of customer happiness, restricting any accurate data analysis, and prevents companies from addressing the real issues that are affecting their customers.
Three Categories to Fit Everyone
NPS classifies your customers into either Promoters, Passives, or Detractors, depending on how they score. Great. But does that tell you anything about the respondents themselves? All you know now is how they feel about recommending a product or service, and nothing about why they feel that way. It makes it impossible to draw conclusions or get any real insights.
Likelihood to Recommend – That’s It?
NPS focuses solely on the likelihood of a recommendation, but something as intricate as customer satisfaction is not a one-size-fits-all situation. It’s like judging a movie solely based on the popcorn you eat while watching. What about the plot, the acting, or even the soundtrack? NPS can only give you one thing, and you’re often left with just a popcorn score.
Your users can be both Promoters and Detractors at the same time, depending on who they’re recommending your product or service to. Think of it like this: are you likely to recommend a holiday destination to all your friends equally? If it’s a lively destination with foam parties and all-night clubbing, then sure, some might love your recommendation. But those looking for a peaceful and family-friendly place probably won’t. This clearly impacts the NPS your user is giving, and your score might be off because of it.
Just a Score in a Vacuum
Now you’ve got your NPS from your survey – let’s say it’s 41. What does that mean? Is that a good score? Mediocre? Or even worryingly bad? How did your competitors score? Did they even use the same methodology? This exercise has now turned into a game where you’re unsure if you’re winning or losing. The limitations of working with arbitrary numbers only bring more questions, confusion, and problems. In the end, you won’t get any qualitative insights that help you make real improvements.
A Starting Point, Not the Finish Line
Analyzing your NPS is a bit like trying to read a book by only going off the back of it. It might give you an idea of what the book is about, but to truly get the full story you need to properly dive in. NPS is just the tip of the customer feedback iceberg, and you need to combine NPS with other mechanisms to get the answers you were hoping for.
Actions Speak Louder than NPS Numbers
Knowing your NPS alone won’t magically fix any of your problems either. You need to make something useful with it. You need to get involved when looking for answers, and you need to look with purpose.
Do you want to measure and drive word of mouth, or is it retention that you’re after? They mean different things for NPS.
You need to take the feedback and try to find patterns. Look deeper, find the issues, and make actionable plans for them. That’s how you can start to make real improvements – how Detractors become Promoters.
So, NPS Is Not That Good – Now What?
Talk to People, People
Pick up a phone. Send an email. Go for an overpriced coffee. And ask questions.
Talk to your customers at key moments. Why do they buy your service? What are they hoping to get out of their investment? Why did they opt out of your subscription?
Ask your active users what made them buy into your solution in the first place. Where were they when they decided to go with you? Where did the customers hesitate, and when were they convinced?
Every opinion matters – especially those coming from the rage quitters. Exit interviews can be incredibly valuable, as the ones that left you are usually the ones with the most important insights. Since they’re already out the door, they have little to lose and will let loose with brutal honesty.
This isn’t something to be scared of. Take their feedback for what it is and put it in the context of what you set out to find out.
Maybe their annoyances are something as small as the size of the buttons they had to click. Or the software might have been too unintuitive and slow for them to work with. They might have some strange system integrations pet peeve. Or perhaps they simply couldn’t stand that irritating notification sound your product makes?
There are tons of things to learn from just asking. The insights are valuable for your entire business and everyone in the organization should care. From your AEs and CSMs to UX designers and CFOs.
You should always look deeper and understand. You will learn something, and what you find are usually insights you can bring to the board and investors.
Get Your Referrals On
Finding your Promoters can be valuable, as these customers are most likely to refer your business to others. Now you can leverage their positive sentiment by nudging them for a referral of your business. You can do this through personalized programs, discounts, incentives, or exclusive offers. By reaching out to promoters and tapping into their willingness to recommend your business, you can significantly increase the number of referrals you receive.
You also need to make it easy for people to talk about your product. Let your users know what your product does, make your message easy to understand, and then teach them to pitch it for you. PLG expert Leah Tharin touched on this in a previous podcast of ours: “If you cannot explain to me what your product does, how can I explain it to someone else?”
Make your product shareable. Happy users want to share their progress and the work they’re achieving. Let them. They are great ambassadors for you. Prompt users to share their progress and your product within the application itself by connecting it to relevant platforms. You can even have a “Share this with a friend” message pop up at opportune moments.
You can always put the acquisition cost of a new customer in a referral context. Look at your MQL costs from LinkedIn, for example. Once broken down, what you’re paying for a qualified lead on LI is then also your budget for referrals. Your targeting will likely even be more precise than when you pay for the ad.
What’s the Total Score Here?
There’s no way around it – Net Promoter Score has its drawbacks. It oversimplifies the customer experience, it’s easily gamed, and it lacks context and actionable insights.
But, there’s hope. When you combine it with other feedback mechanisms, NPS can provide a starting point for understanding customer perception. Engaging in meaningful conversations, gathering feedback at key moments, and encouraging referrals can lead to improvements.
Did you like this blog post? On a scale of 1 to 10, how likely are you to recommend it?
Our founder Toni talked to Mikkel about NPS and more on this week’s Revenue Formula. Check it out here: