In a world where customer opinion can make or break your business, understanding and improving your Net Promoter Score (NPS) has never been more critical.
The metric is not just a number, but a reflection of customer satisfaction and a predictor of your company's growth potential. But how do you move the needle on your net promoter score? This article dives into proven strategies that can help you elevate your customer experiences, and ultimately your NPS.
Understanding NPS
What is NPS, and why does it matter?
Net Promoter Score, a key measure of customer satisfaction and loyalty, asks one simple question: "how likely are you to recommend our product or service to a friend or colleague?" The responses categorize customers into Promoters, Passives, and Detractors, offering a snapshot of your customer expectations and sentiment towards your company.
Impact of NPS on your business outcomes
A robust NPS score signifies customer retention, loyalty, and satisfaction are in a good place. While not to be used in a silo to make business decisions, it can be a helpful heuristic to quickly root out issues creating unhappy customers, and also signal areas working well.
Industry research shows that NPS has a potent correlation between revenue, in addition to customer customer satisfaction. For example, The London School of Economics found that an average NPS increase of 7% correlates with a 1% growth in revenue. This study highlights the direct impact of NPS on revenue growth and the importance of focusing on customer relationships through high NPS scores.
The fundamentals: setting the stage
If you're like many businesses relying on Net Promoter Score (NPS) as a key business metric, you need a roadmap to know how to optimize it. Achieving a consistently high NPS isn't easy. Fortunately, if your NPS isn't where you want it to be, there's a lot you can do to improve it.
Benchmark your NPS score
Before diving into strategies to improve your Net Promoter Score (NPS), you should aim to establish a baseline of current performance. Make sure you have consistent calculation methods across your business units, including how scores are being interpreted to gauge customer sentiment.
Relationship between NPS and CX
NPS is intricately linked to customer experience (CX). While positive scores indicate overall favorable customer experiences, NPS is no silver bullet. To get the most out of your NPS program, you'll need to have a system in place to dig deeper on scores.
Negative scores may signal underlying issues with products, services, or interactions, calling for a root cause analysis. But positive scores can also be misleading without proper context. Make sure you go into NPS optimization with an open mind to explore the intricacies between CX and NPS, to lay the groundwork for good communication across your team and make meaningful nps improvements.
7 steps for how to improve nps
Nobody wants a low net promoter score, but if your score is low you're probably feeling pressure to take quick action. As we outline steps you can implement below, keep in mind that while some changes may have a quick time to impact, taking a short-term view on improving your Net Promoter Score is a recipe for failure.
The key to achieving a high NPS and the business results you're after, is to take a consistent approach to improving CX with concerted effort across your business. As you create a better experience across the entire customer journey, your NPS will naturally improve over time.
Here are seven steps that businesses can take to start to improve NPS scores:
Develop a customer-centric company culture
Address friction points that lead to negatives scores
Understand the root cause
Close the loop with customers
Design effective NPS surveys
Enhance customer experience
Implement continuous improvement monitoring
1. Develop a customer-centric company culture
Your NPS score is impacted by every part of your company. Keep in mind that scores are influenced by multiple factors that are beyond your direct control.
For example, maybe the marketing team launches a campaign that doesn't resonate with customers. Or your product just doesn't perform the way your customers expect it to. Or your finance team's payment process is clunky and outdated.
Here's the point: improving your NPS score can't happen in a vacuum. A high NPS is a result of a great customer experience, and that requires buy-in from every department and every level of your organization.
In many ways, it's quite easy to invest in collecting and sharing information about your customers. Hiring an internal customer insights analyst or sharing high-level reports of your customer feedback across your company may feel like progress, but you can't affect change unless other teams treat these KPIs as important and take action based on that information.
Cultural values come from the top-down, so your executive team needs to be on board. They need to understand the importance of CX, and keep the customer at the centre of key business decisions. As individual departments and teams create plans and work out your company strategy, this customer-centricity needs to be lived out across every layer.
Takeaway
Make it a point to achieve buy-in from across the organization that customer experience is everyone's responsibility, and use shared customer-focused KPIs across teams.
2. Address friction points that lead to negative customer feedback
NPS is a lagging measure of how customers perceive their experience with your business. Every part of their experience plays into their likelihood to recommend you, meaning you've got to keep an eye on every part of customer interactions.
If you include an open-ended question in your NPS survey (you should!), you'll notice quickly that customers often use it to share feedback about everything they experience. Some of those experiences might lead to good metrics in one area of your business, but end up damaging your reputation and your customers' loyalty further down the road.
Here's an example. Let's say you have a very effective sales team. Your account executives often meet their personal and team goals, so your perception is that the team is as successful as it needs to be. Sales goals are being met and life is good.
But when you run NPS surveys a few months later, you might find that detractors make comments about your sales team making exaggerated claims and being a little too pushy about selling.
The feedback only comes up later in the customer journey, long after your sales team has handed those customers off to your customer success and support teams. In fact, your sales team may not even be considering NPS as important, because they're incentivized to focus on net new customers (not existing customers).
That's just one example. You can probably think of others relevant to your own organization. Maybe you're experiencing product quality issues that result in frequent bugs, and your customers are frustrated because of repeated technical issues. Or maybe your accounting team's invoicing process isn't as seamless as it could be.
Takeaway
Start by mapping the customer journey and charting out where each of these issues crops up. Once you've got visibility, then you can mobilize your teams to address these friction points individually.
3. Understand the root cause
Customer feedback often follows what's known as a J-distribution.
This is because people are much more likely to respond to surveys or share feedback if their experience was on either end of the extremes: very positive or very negative. If you plot the numbers on a graph, you'll usually see more volume at the ends rather than in the middle (unlike a typical bell curve, where the highest volume is in the middle).
This reality means that NPS feedback can sometimes feel misleading, since the majority of your customers' experiences are probably somewhere in the middle. They're simply underrepresented in your feedback because they have little to say.
That's why understanding the reasons behind NPS ratings is so important. You can understand the root cause by:
Asking an open-ended 'why' question as part of your survey.
Analyzing your customers' responses to this to categorize their issues.
Finding recurring themes and patterns to identify areas for improvement.
Another way to dig deeper into understanding your NPS score is to do some user segmentation. For instance, if you offer a free trial and the distribution of NPS in that group is tilted towards detractors or passives, you can separate out the issues that they experience and deal with them. This won't only increase your NPS score, but will also (probably) increase your conversion rate from free trials to paid customers.
Understanding the key drivers of both positive and negative scores is essential in improving your NPS. It'll help you know what's going well, so you can build on those areas and leverage them further. Of course, knowing the drivers of low scores will also show you where you need to focus on improving.
Takeaway
Analyze your NPS data over a longer period of time, and take note of any underlying issues that keep appearing over and over. This also makes it easier to build a business case around prioritizing to fix those problems.
4. Close the loop with customers
Whether your customers give you positive or negative feedback, following up with them is extremely valuable.
Detractors are most likely to churn. So when these customers take the time to reach out to you by completing your NPS survey, you have a huge opportunity to potentially retain them by providing a better experience now.
How you approach this is up to you. Some options to close the loop with detractors might be:
Reaching out in response to their rating, let them know they provided valuable feedback, and ask for clarifying details.
If they raise an issue you're already working on, follow up with an explanation of what you're doing to address it and get their feedback on the solution.
Owning up and admitting to your mistakes, explaining how you want to avoid creating the same experience in the future.
Offering them a goodwill gesture, such as a short-term discount or a bonus.
Every opportunity to connect with your customers as individuals can build a deeper relationship with your brand, and foster customer loyalty.
When you're following up with passives, try asking open-ended questions like, 'How could we have done better?' Maybe you'll uncover that last small thing that would push them from being neutral towards your company into becoming advocates.
Finally, rewarding your promoters (or loyal customers in general) through messages of appreciation or special offers can keep them on board for a long time. It's important not to focus so much on the negative scores that you neglect your relationship with promoters, or you'll risk losing them too.
Takeaway
Make it a priority to follow-up with all detractors immediately – you may be able to turn them into an advocate over time with genuine attention and care.
5. Design effective NPS surveys
If your survey questions aren't clear and easy for customers to understand, or the timing of when you hit send doesn't match the level of customer interaction, you risk getting a lower score than you would otherwise.
Consider the timing and frequency of your NPS surveys to make sure they are best positioned to capture feedback at critical touch points in the customer journey. For significant interactions, like major purchases or customer support interactions, send surveys immediately. For one-time transactions online, you'll want to keep your survey ask very light.
In addition to the standard NPS rating question, include open-ended questions to encourage respondents to provide qualitative feedback. These questions should prompt customers to elaborate on their ratings, and offer suggestions for improvement. This can be as simple as, "tell us your story about your experience with us today." Too many teams overlook the power of a simple open-ended question, and miss out on a ton of deeper insights from customers in the process.
Another consideration is the amount of personalization you put into your surveys. If you hit every customer with the exact same NPS survey that doesn't align with their interaction with you, or simply asks too many questions, you'll be actively degrading the overall customer experience with the survey itself.
Takeaway
Do an audit of the major points in your customer life cycle and determine whether the touch points with your NPS survey are appropriate in timing, length, and level of personalization.
6. Enhance customer experience
Once you root out any points causing friction for customers, turn your attention to how you can enhance the experience for your customer base.
A great way to create more happy customers is to provide personalized service, products, and experiences. Where possible, tailor your interactions with customers to their individual preferences and history with your brand.
You can do this by personalizing communications, recommending relevant products, services or features, and generally anticipating customer expectations. For example, a subscription-based streaming service would use viewing history data to curate personalized content recommendations for each user, driving up overall engagement levels.
If you service customers across multiple channels, evaluate whether your touch points are communicating in a consistent and seamless way. Between your online presence, in-store experience, or a mobile app, you want to deliver a unified experience.
As a bank for example, starting a loan application online should feel like a seamless process as you ask customers to continue the process in a branch, or through their mobile banking app. Looking at points where you can unify these experiences is a great start.
Takeaway
Identify ways you could delight customers through personalized interactions across their omni-channel experiences with your brand.
7. Implement continuous improvement monitoring
Finally, continuous monitoring of your net promoter scores is key for any improvement strategy.
Lean into iterative improvement initiatives, based on insights gathered across the organization. Test implementing targeted improvements to address pain points or areas of dissatisfaction. By testing strategies through pilot programs, you can begin to assess effectiveness before committing to full-scale implementation of a service or product change.
For example, a hospitality company may want to pilot a new guest loyalty program based on feedback from NPS feedback, and adjust program features based on early results and customer feedback.
Another powerful input into your continuous improvement approach will be your frontline employees working across the organization. Your customer service team and customer success teams have valuable firsthand knowledge of customer behavior and interactions that will never show up in a formal survey process. Encourage employees to share feedback and offer suggestions for enhancing customer experience, from any corner of the organization.
Takeaway
How could you reward and recognize employees for contributing their perspectives to the customer insights collection efforts across your organization?
In summary: improve NPS with powerful insights
Focusing on NPS can be a great way to kickstart important conversations and to create a customer-centric culture. But if you're serious about improving your net promoter score, you need good customer feedback analytics.
Feedback analysis provides you with insights that tell you what matters most to your customer base, positioning you to take the right strategic actions. At Kapiche, we've developed a platform that can take your nps data and process it alongside all of your other customer data, for a comprehensive view of the ‘why’ behind metrics your organization cares most about.
Ready to take your NPS improvement efforts to the next level?
Schedule a demo with Kapiche today and discover how our advanced text analytics platform can help you uncover actionable insights, drive meaningful improvements to your net promoter score, and drive sustainable growth for your organization.
