Charting a Path for Success - The Best NPS Methodology - Part 2

In the first part of this 3-part-blog-post, we presented the case for using NPS as a key tool to assess your customers’ sentiment towards your company and come up with clear action items to turn those insights into enhanced performance. We also shared the results we have generated when deploying this specific methodology to support our claim.

In this second part, we will deep-dive into the methodology we developed including very specific suggestions for the different elements needed to maximize NPS impact. In the third post, we will expand on the methodology with a practical set of playbooks and actions you can deploy in your organization after launching your NPS program. We will also share some of the feedback we’ve received from the community along the way extracted from comments and the short survey linked here.

Let’s recap.

1. NPS in a Nutshell

NPS is a survey methodology for assessing customers’ sentiment. It uses a single, very specifically worded question and a rigid scale to collect responses.

What Makes NPS So Powerful

• High Response Rate: The use of a single question minimizes effort for customers, and when distributed correctly, yields a higher response rate than traditional surveys. This, in turn, enables statistical significance in our analyses and high confidence in the representative nature of the data for all customers.  
• Benchmarkability: The rigidity of the question used for NPS enables easy benchmarking of the results in a number of facets: against other products, against other competitors, against other companies in general, and so on.

The Key Drawbacks of NPS

• Ability to Take Action: The use of a single question increases the number of responses, but reduces the amount of data in each response. This makes it harder for companies to make good use of the data since it is hard to identify what drives the responses and how to attribute them to specific teams or tasks.  
• Correlation with Company KPIs: There is a weak correlation between company-level performance (mainly Revenue Growth or Net Retention) and NPS. Short of such correlation, there is a risk that NPS becomes nothing more than a vanity metric.

2. How to Make NPS Work: Our Suggested Methodology 

The Key Tenets of a Great NPS Program

1. Trend Over Score: The actual NPS score (the "number") is not as important as tracking the trend and the impact of your actions on that score. You should design your program to enable that trend analysis.
2. Response Rate is King: A high volume of responses is key to not only ensuring it is representative of your customer base but, also enabling deep analytics that yields statistical significance in the results. Leverage the power of the single NPS question to drive as high a response rate as possible and avoid the temptation to add more questions.
3. Target the Right Persona: Different roles within your customers have different experiences with your solutions. When you design who and how you send your feedback form, make sure to target the ones you care the most about, or better: be able to identify the persona so you can slice the data based on those differences. This point is different from #5 below as it is about the placement and distribution of the feedback form, vs the back-end analysis of the received data in the latter.
4. Timing is Everything: The customer experience changes along their lifecycle with you. It is important to segment the feedback based on this facet, collect data at different times along the lifecycle, and compare them to one another.
5. Comments are Gold: Comments add an invaluable dimension to the feedback from customers. You should promote receiving them and then think carefully about how to best capture and analyze them.
6. NPS vs. VoC: NPS implemented right is a most powerful, but only one component of a well-structured Voice of Customers (VoC) program. You should assess what other components are needed for a comprehensive and actionable program.
7. Collect-Analyze-Act: An effective program starts with collecting the data, continues with careful analysis of it to generate insights, and ends with actions - both outward with the customers and inward with the different teams at the company. It goes without saying, but the more data you have about the customers who provide you feedback, the better you can understand their sentiments and their reasons, which are key to turning the insights into actions. Invest in collecting as much data (the customer metadata from your CRM and/or back-end product) as possible - but without subjecting them to lengthy questionnaires that damage your response rate. Be sure you can finish the swing if you move forward with NPS or you will be doing your customers and your teams an injustice.

The Best-in-Class NPS Methodology Explained

A) 1 Question: Use the standard single NPS question and standard NPS response scale: “On a scale of 0-10 where 0 is least and 10 is most, how likely are you to recommend our company to a colleague or a friend?”. As stated previously, keeping this standard leaves no room for bias, and provides you with the ability to benchmark internally as well as with competitors. 

B) 1 Optional Text Box: Add an open-text box to capture potential additional customer feedback. Make sure to capture the first question response (the score) BEFORE enabling the text box to ensure you don’t suffer from the reduced response rate if the text box is perceived by the customer to be a second question. Customize this question based on the initial score. For example, Detractors (scores: 0-6) may get: “We’re sorry you’re not having a great experience. What is the main reason for that?” or for Promoters: “Thank you for your feedback. What is the main reason contributing to your positive experience?”  We will talk about how to best analyze these comments later.

C) 3 Times: Ask the (exact same!) question at different moments along the customer lifecycle. We suggest 3 milestones: 

• Immediately after Customer Go-Live: Most likely, upon the completion of the initial implementation, but can also be after the completion of the buying process - if there is no implementation required, 
• 90 days after the Go-Live, and 
• Annually thereafter. This last one can be done on the anniversary of either the purchasing or the go-live of the customer, depending on your business. 

Such cadence provides a more complete picture of the overall customer experience vs a snapshot or point in time and is key to isolating root causes and associating actionable playbooks to address them.

D) In-App: If at all possible, use an in-app mechanism (we used Pendo.io) to distribute the feedback form to the customers. The values are multifold, but the three most critical ones are: 

• More Data with Fewer Questions: you capture a lot of immensely useful data about the customer this way without the need to ask/bother them for it, 
• Target the Right Persona: you can time and direct the questionnaire/feedback form to the right person you want the response from (specific executive, owner, end user, admin, etc.), and
• Higher Response Rate: you can structure the feedback form to appear in such a way that dramatically increases the likelihood of the customer responding. For example, pop it up to cover their entire screen, block their ability to interact with the app until they respond, time it to precede or follow a critical task, etc. Think of Uber or Lyft for example. They show the feedback form immediately upon a customer completing a ride and require the feedback before any other task (including ordering the next ride) can be taken.

E) Explain Why: Preface the standard NPS question with an (extremely short!) explanation of why you are asking it. We did this to establish the right expectations with customers on the frequency of questioning. You see, most of us generally don’t like wasting time responding to questions. Furthermore, “survey fatigue” (customers getting annoyed at responding to too many surveys) is a huge concern - for all the right reasons - for companies. By clarifying to the customer why we ask and indicating the frequency of that question, we establish the right expectations and increase the response rate. Specifically, we established a “theme” for all three questions focused on celebrating the customer across the milestones we established in bullet c. As an example, our post onboarding question read: “Congratulations on completing your onboarding! Based on your experience to-date…”.

F) Act on the Data: Before you launch your program, have a plan to act on it. The third (and final…) part of this blog post series is dedicated to this point, but in short: 

• Customer Communications: Customers will appreciate you more if you acknowledge and act on their feedback. Conversely, they will appreciate you less - and stop providing feedback - if you don’t. Make sure to develop automated responses, but also other mechanisms to capture and respond to specific feedback.
• Plan the Analysis: Develop a plan for the analysis. Quite often, you will need to lobby resources from or work in partnership with data teams to pass data from your CRM to BI tool you use for the analysis.
• Share the Insights: Develop a mechanism to share the insights of your analysis. Consider the different audiences (execs, the whole company, Product teams, Sales teams, etc.), different cadences (daily, monthly, quarterly…), and different formats: slack channels, presentations, open discussions, etc. 
• Actions Plans: develop specific actions with the relevant impacted teams: changes to the Product roadmap, to sales offerings, to implementation processes, to the service team’s knowledge, and so forth. Then track the decisions and progress against them when you present further results.

3 are Better than 1: Gaining Deep Insights From The Comparison

Why is this the best methodology we have seen? Because it not only incorporates the benefits of NPS and avoids its drawbacks, but also focuses on analyzing the trends and differences among data points and NOT just the actual score.

The customer experience changes along their journey. Not only do they have different levels of knowledge about our solutions (from high-level theoretical to more specific, often more technical and much more practical based on actual usage), but they also interact with different people often from completely different teams. Using the exact same question provided in the exact same format enables us to isolate the feedback we get from the customer and benchmark the score not only against competitors but also against each stage of the lifecycle.   

Keep in mind that we landed on these three “moments” based on data we were collecting or wanted to collect to know more about the overall customer experience. We wanted to know more about the sales and implementation cycle, hence the timing of the NPS feedback form post-implementation. We experienced high churn at 60-120 days post-implementation and wanted to gain better insight into what customers were seeing/experiencing in our product at that time that could help us adjust. And lastly, we wanted to see if the experience deteriorated at all for those who reached their year and then the second anniversary with us. 

For you, these markers or milestones may be slightly different, but our advice is to let the data in combination with customer behavior guide you on the best cadence. 

Immediately Post Go-Live:

When we ask for feedback after the completion of their initial implementation, we receive feedback on the customer’s buying process as well as their implementation project/process (assuming there is one). We contemplated splitting the question and asking for feedback at the completion of the buying process but, decided it sent the wrong message to the customer. Further, we find that quite often the tension between the customer and us, the vendor, manifests in differences in knowledge and expectations by the customer that they only discover during the implementation. After all, the customer does not know what they don’t know. They find out some of those differences between info they received (and interpreted) during the sales cycle and that during the implementation phase. Forcing the feedback to a single data point forces us to treat the process of buying and implementing as one, which was powerful. 

Further, our business enabled customers with a choice to either self-implement or use our professional services team for assistance. Having the same question asked at the same milestone across these service options helped us understand the experience more deeply. We were able to use the NPS data from this point in the journey to help evolve both the product and the service levels to ensure no matter what product or service option a customer chose to buy from us, the onboarding experience created as little friction as possible. 

90 Days Post Go-Live:

We applied this same logic when we asked for feedback 90 days after the customer started using the product. At that point, customers have had experience using the solution on an ongoing basis on their own, allowing us to understand the product impact and our service value to them in their business reality. Comparing the data (score) here with the data from the post-implementation phase enabled us to identify challenges with the product usage that the customers were not aware of at the completion of the initial implementation.

As previously mentioned, we landed on this milestone because we experienced high churn in the 60-120-day period after onboarding. This feedback coupled with back-end product analytics, enabled us to isolate feature function mismatches, educational gaps, product gaps, and missed service level expectations. 

Again, back-end data on the customer (with heavy insights from in-app product analytics) enabled us to compare and contrast customers who self-implemented with those we assisted via professional services. Differences helped us isolate the value of the Professional Services implementation team as well as hone in on areas of the product needing CX enhancements. 

Annually:

Lastly, when we ask the customer for the third time, after a year of usage, we round out the entire first year of product and service experience. This data point provides insights into the longer-term relations between the customer and us, how our support team serves them, and how our product evolves to address their needs. This is when we get a deeper perspective into customer expectations from us over time and assess our alignment with those expectations surrounding availability, stability, feature enhancement, and service levels. 

So, in the first year, a customer receives feedback forms at 3 points in their lifecycle. After that, they only receive one on their anniversary which serves as a way for us to continually monitor our ongoing product and service models. No matter what business you’re in, the first year is arguably the hardest to get through. 

It's worth noting that if you are in a high-touch model with hundreds, maybe even thousands of customers, you can start tracking these scores account-wide, so you can assess at the account level if the customer's experience has changed. If you’re working in a low-touch / tech-touch environment tracking these touchpoints at the cohort level can help you articulate if a change in servicing or product enhancements has had an impact on your customer base. 

3. Conclusion: NPS Deployed Well is a Powerful Tool!

We developed, launched, tweaked, and enhanced the above methodology to address the challenges we all encountered with NPS in particular and customer-sentiment surveys in general.

And it worked!

• Our response rates were consistently 22-25% and more than 20% of customers added comments too.
• Our insights were specific to different Product, Sales, and Services teams and enabled them to act on the feedback, which in turn, resulted in increased NPS scores.
• Our monthly review meetings (we changed to quarterly after a while) were packed with people from a multitude of disciplines who were interested in the rich data, deep discussion, and actionable outcomes.

And yet, as we all know, collecting feedback and analyzing are only steps 1 and 2 of a full program. Taking action is the third and where the rubber hits the road. In our next post, we will expand on the NPS methodology sharing a set of practical playbooks you can use to optimize the data coming out of your NPS feedback form as well as educate your teammates with this information in a digestible manner.

Lastly - Before you leave - we would be most grateful if you could take 2 minutes to provide us with some information on your experience with NPS. We plan to analyze this data and share insights from it with the community in our next post. Please take this short survey here.  

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Sara Bochino and Boaz Maor are veterans in the Customer Success world and have worked at a number of companies, leading customer-facing teams in different formats.