We promise, by the end of this article, you will know NPS is not only a vanity metric and you will have learned enough NPS survey best practices to know how to use it for your business.
But first, picture this: it’s 2008 and two broke San Francisco roommates, Brian and Joe, are trying to make rent. They came up with the idea to rent air mattresses in their apartment during a design conference. And just like that, AirBnb was born.
Fast forward a few years and AirBnb is getting off but has yet to become a global phenomenon, offering travelers unique and affordable accommodation options all over the world.
So how did they get there?
A big part of their success can be attributed to the way they leveraged Net Promoter Score best practices in the early days, to measure customer satisfaction and turn feedback into revenue.
When Airbnb first started, they knew that their business model was centered around creating trust between hosts and guests.
But how could they measure that trust? By asking guests how likely they were to recommend Airbnb to a friend, they could get a clear idea of how well they were doing in terms of customer satisfaction.
Now, AirBnb didn’t stop at just measuring and surveying NPS. They also used it to improve their business.
When they received feedback that their website was difficult to navigate, they made changes to improve the user experience.
When guests complained about cleanliness issues, they implemented stricter standards for hosts to follow.
The result? AirBnb’s Net Promoter Score skyrocketed, going from 20 to 70 in just a few years. And that increase translated directly into revenue.
Because the company knew that customers who rated AirBnb as a 9 or 10 on the NPS scale were 2.6 times more likely to book again than those who rated them as a 6 or below.
And the company kept using this system to do to stay ahead of the competition in several other ways. Will talk more about that later in this article.
But enough stories for now.
Let’s take a step back for an instant to understand where NPS comes from!
What is Net Promoter Score in a few words?
NPS stands for Net Promoter Score, and it's a customer loyalty metric developed by Fred Reichheld, Bain & Company, and Satmetrix.
The idea behind NPS is that the more loyal a customer is, the more likely they are to recommend a company or product to others.
NPS is based on a simple question: "How likely are you to recommend this company/product to a friend or colleague?" Customers are asked to rate their likelihood of recommending on a scale from 0 to 10.
Now, here's where it gets interesting. Based on their responses, customers are classified into one of three categories.
The first category is promoters, who score the company or product a 9 or 10.
These customers are considered loyal and are likely to recommend the company to others.
The second category is passives, who score the company or product a 7 or 8.
These customers are satisfied but not necessarily loyal, and they may not go out of their way to recommend the company.
Finally, there are detractors, who score the company or product a 0 to 6.
These customers are unhappy and may even discourage others from doing business with the company.
To calculate the NPS score, you subtract the percentage of detractors from the percentage of promoters.
This gives you a score ranging from -100 to 100. A score of 100 means that every customer is a promoter, while a score of -100 means that every customer is a detractor.
Let's explore some examples by examining the best practices of three selected companies.
3 proven strategies of companies using NPS survey Best practices
Have you noticed how hard and costly it has become for businesses to attract new customers in today's highly competitive market?
And it's a real struggle to keep them hooked too. Solutions that won’t demonstrate great added value will be cut off in the current economical landscape.
That's why if you're planning to expand your business in 2023, it's crucial to prioritize customer satisfaction and loyalty.
One interesting way to achieve that is by using NPS (Net Promoter Score) measurement. It lets you assess how likely your customers are to recommend your product or service, giving you a clear idea of their satisfaction level.
Happy customers are more likely to stay, recommend your solution or buy more.
Moreover, social media and online reviews have made word-of-mouth marketing more critical than ever.
Positive feedback from satisfied customers can give your business a significant boost, while ignoring negative feedback can quickly hurt your reputation.
Especially in a world where bad news travels faster than good ones.
Ready to learn how successful companies have grown their business with NPS?
Check out these three examples!
NPS to identify your promoters: The AirBnB example
Have you ever recommended a product or service to a friend or family member?
Maybe it was a new restaurant you tried or a cool gadget you found online.
You probably did it because you had a positive experience and wanted to share it with someone else, right?
Well, companies can use this NPS survey to their advantage by identifying their most loyal customers, or "promoters," and leveraging their positive feedback to generate referrals and build brand loyalty.
And that's exactly what Airbnb did!
By using Net Promoter Score, Airbnb was able to identify its promoters and encourage them to spread the word about their platform.
They did this by offering referral incentives and running targeted marketing campaigns highlighting their positive reviews and customer satisfaction ratings.
This strategy not only helped Airbnb acquire new customers at a lower cost, but it also helped them build a loyal community of users who were more likely to book with them again in the future.
And it all started with simply identifying their most satisfied customers and leveraging their positive feedback to build brand loyalty.
So, if you're a business owner, a product manager, or a marketer, you should know that NPS is a great way of identifying your promoters and leveraging their positive feedback.
NPS to listen to detractors: The DropBox Example
In the early 2000s, a startup called Dropbox was revolutionizing the way people stored and shared files online.
However, as the company grew, the team started to notice that their customer retention rates were dropping.
Dropbox's leadership team was baffled.
They had built a great product that was easy to use and affordable, so why were customers leaving?
That's when they decided to implement the Net Promoter Score (NPS) survey.
They sent out a simple email asking customers, "How likely are you to recommend Dropbox to a friend or colleague?"
The response was overwhelming, and not in a good way.
Dropbox discovered that a significant portion of its customer base were detractors, meaning they were unlikely to recommend the product to others.
By diving deeper into the feedback provided by detractors, Dropbox identified several pain points.
Customers were frustrated with the limited storage space, slow syncing speeds, and lack of features like file versioning.
The Dropbox team took this feedback seriously and implemented changes to address these concerns. They increased the amount of free storage available to users, optimized their syncing technology, and added new features like file versioning and collaboration tools.
As a result, Dropbox saw a significant improvement in its NPS score and customer retention rates.
By listening to their detractors and taking action to address their concerns, Dropbox was able to turn things around and build a loyal customer base that continues to use the service to this day.
NPS to track client’s sentiments variations: The Zappos example
Let me tell you more about the online shoe and clothing retailer, Zappos next. They're not your average e-commerce site - they're known for their exceptional customer service.
And guess what? NPS played a major role in helping them achieve this reputation.
After Zappos was acquired by Amazon in 2008, they were able to utilize Amazon's resources to improve their customer experience initiatives.
And one of the first things they did was create a team dedicated solely to tracking NPS and other customer satisfaction metrics.
By keeping a close eye on their Net Promoter Score over time, Zappos could pinpoint areas that needed improvement.
For example, they noticed that customers who had to wait longer on the phone for support gave them lower NPS scores.
With this insight, Zappos decided to invest in more customer service resources, like additional staff and training programs.
And the results speak for themselves. Today, Zappos is known for exceptional customer service and has one of the highest NPS in the industry.
All because they consistently tracked NPS and made data-driven decisions to improve their overall customer experience.
This just goes to show how powerful NPS can be in measuring customer satisfaction and loyalty, and helping companies take the necessary steps to improve their customer experience.
By keeping track of NPS over time, companies like Zappos managed to identify areas for improvement, take action to address customer concerns, and ultimately build stronger customer loyalty and retention.
How else can you use the NPS survey?
Still not convinced? Let me go one step further then.
Because Net Promoter Score is a powerful tool for turning user feedback into revenue and improving customer satisfaction.
It isn't just a one-trick pony or a vanity metric.
Aside from the benefits we already talked about, there are several other ways companies can use them to their advantage.
Like using NPS as benchmarking. By comparing their NPS score to industry benchmarks and their competitors' scores, companies can get a better understanding of how they stack up in terms of customer satisfaction and loyalty. This can help them identify areas where they need to improve to stay competitive in the market.
The promoter score can also help companies prioritize areas of improvement by identifying which aspects of the customer experience are most important to their customers. For example, a company with a high NPS score may still have room for improvement in areas that are particularly important to their customers, such as the ease of use of their products or personalized support.
In addition, an NPS tool can be used to track the impact of marketing campaigns and product launches on customer sentiment. By measuring it before and after these initiatives, companies can determine how effective they are in driving customer satisfaction and loyalty.
Overall, Net Promoter Score is a metric that provides companies with valuable insights into customer sentiment. It can help them make data-driven decisions to improve the customer experience, increase customer loyalty and retention, and ultimately drive revenue growth.
By identifying promoters and detractors, digital companies can leverage positive feedback to generate referrals and address concerns to improve their products and customer experience.
ProdCamp offers a Net Promoter Score survey module to help companies capture client sentiments. With Prodcamp's NPS module, businesses can easily create customizable surveys and analyze results in real time.
The module integrates with other ProdCamp features, such as the feedback management tool, to provide a comprehensive view of customer sentiment and help you inform your product roadmap and prioritize your work.
Keeping your users informed of the changes you make automatically along the way.