Satisfied customers are the key to success for any business. But it’s not always easy to tell just how happy customers are.
When it comes to gauging customers’ happiness levels, the Net Promoter Score has become the standard — especially in the software industry.
The NPS method became popular in part because it’s extremely simple and easy to calculate. In case you’re new to the system, it simply asks users to answer a single question on a ten-point scale: “How likely would you be to recommend this service to others?” The system classifies scores as “detractors,” “passives,” or “promoters.” Users calculate NPS scores with the following formula: (Number of Promoters – Number of Detractors) / (Number of Respondents) x 100.
Your NPS can be useful if you administer and follow up correctly. However, the NPS is even more useful when combined with metrics that can give more insights into customers’ feelings.
Here are a few best practices that will help you get the most out of your Net Promoter Score.
The net promoter scores you receive can vary a lot based on when you send the survey to customers.
You don’t want to ask for customers’ thoughts too early in their relationship with your company, because they haven’t experienced enough of your product yet. But if you wait too long, you won’t capture their initial impressions.
At The Receptionist, we administer the NPS at the 3- to 4-month mark in the customer lifecycle and then at least once annually per customer.
The annual score is better at measuring happiness over the lifespan of the account, but the introductory NPS gives us more short-term info about their onboarding experience and their initial implementation.
Whatever NPS interval you choose, make it consistent. This will help you get results that are a little more reliable. You’ll have to strike a balance between annoying your users and collecting scores so infrequently that the results fluctuate too much to be helpful.
Of course, the NPS is valued for its simplicity. But without a little more information about who is filling out the surveys, you won’t be able to analyze what influenced the scores.
Some companies choose to add another question to the NPS process. After the initial question, they ask another question about the reason behind their response. However, you don’t necessarily have to ask more questions to get valuable qualifying information.
For example, you might track who is actually filling out the survey at each company that receives it. An administrator might have much more helpful insights into your software than someone at a higher level — or the opposite might be true depending on how your software works.
You should also be able to segment the NPS results by things like user industry, pricing level / plan type, account creation date, and physical location (cultural differences may affect the way people fill out the NPS).
Segmenting your scores this way can help you isolate trends and factors that may be specific to a certain group.
Supplement the NPS With Other Long-Term Metrics
Like many other SaaS companies, we at the Receptionist keep a close eye on metrics that also are key for customer health, but also indirectly indicate customer happiness. Here are a few of those key metrics:
Customer Churn Rate – Understanding what percentage of your customers have left the company over any given time period is crucial for your finances, but it’s also a barometer of customer satisfaction. Obviously if you’re keeping customers happy, they tend to stick around for longer periods of time.
Customer Lifetime Value – This is another metric that measures how happy customers are by indicating how long they stick around (and how much money they spend during that time). To find Customer Lifetime Value, calculate the average number of months your SaaS clients stay with you. SaaS companies like ours can multiply that average length by their average monthly recurring revenue. Companies with more complex pricing structures can multiply it by the average revenue per user per month.
The Net Promoter Score only measures feelings and intentions, not actions. Your churn rate and customer lifetime value, on the other hand, measure the actual actions customers take over the long term.
When you combine info from these crucial metrics with the NPS over time, you can start to get a better idea of how happy your customers actually are.
Supplement with Interactional Data
At any given moment, your customers’ willingness to recommend your product can change. In fact, their feelings can change after every interaction with your company.
So, to round out the long-term views on happiness provided by metrics like the NPS, churn rate, and customer lifetime value, it’s smart to keep a finger on the pulse of customers’ feelings in other, more short-term ways.
There are lots of tools available that allow you to check in with customers after every customer service interaction.
At The Receptionist, our customer service chat app performs these check-ins automatically. It also uses emojis instead of words to make things as simple as possible for customers. (A simple, one-click emoji selection is all that’s required for them to give feedback.)
At The Receptionist, we use Intercom to gather interactional feedback. This is an example of what the back end can look like.
Don’t Forget About Online Reviews
Of course, there’s another metric tracking customer satisfaction that happens online constantly and is independent of our oversight: online reviews.
By monitoring review sites and encouraging customers to leave reviews, you can get another dimension into how customers feel about your company. Reviews on Capterra and G2 provide information about customer satisfaction that’s somewhere in between the short-term interactional feedback you can collect from your chat program and the metrics that attempt to measure longer periods of time.
However, that doesn’t mean you should just wait for the reviews to roll in. As we wrote in our post on keeping facility visitors from leaving bad reviews online, it’s important to take a proactive approach.
People are generally more likely to post online about negative experiences than positive ones. Encouraging satisfied customers to post reviews makes for a more accurate representation of your product.
Make sure someone on your staff responds personally to each review, both positive and negative. This helps you keep tabs on how customers are feeling, but it also ensures that your team can address any problems mentioned in the review in a timely manner.
Consider Qualitative Measures, Too
Metrics and measurements are important. But even before you crunch the numbers, your customer support staff can probably give you a pretty good idea of how happy your customers are.
After all, they deal with customers personally all day. Their insights are crucial when it comes to understanding whether or not your customers are willing to promote your brand.
In fact, if you’re wondering just how satisfied your customers are, there’s another, easy place to look for answers: The satisfaction levels of your own customer support staff.
As Receptionist co-founder and Director of Customer Experience Jessica Marshall mentions in our FABRIC podcast, it’s hard to spread joy if you aren’t feeling joyful yourself. And the happiness of your own staff, especially your customer support staff, tends to directly mirror the happiness of your customers.The happiness of your customer support staff tends to directly mirror the happiness of your customers. Click To Tweet
To hear more about how we measure customer happiness at The Receptionist, click here to listen to the entire podcast episode.
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