Don’t Underestimate the Power of Emotion to Drive Customer Loyalty

Emotion is coming to the forefront of Customer Experience (CX) management, not because it’s warm and fuzzy, and not because leveraging feelings is devilishly manipulative, but because when you use emotion to drive your CX efforts, it becomes a powerful differentiator.

More companies are getting better at the functional basics of customer experience, like responding in a timely manner to questions, streamlining the purchase process, and smoothing out onboarding (not to mention creating a decent product) – which means they need something unique to offer that separates them from their competition.  

What is the most unique, even unforgettable thing you can offer? The way you make your customers feel. It’s for this reason the bar for CX is inching up.

The fact that understanding and influencing emotion is a vital ingredient for business success is not surprising — it has been the heart and soul of brand efforts. It is also the foundation of the emotion-recognition techniques (measuring physiological responses) currently in pilot for some retailers and old-school ethnographic research. – Forrester 2017 Predictions: Dynamics That Will Shape The Future In The Age Of The Customer

Emotion not only carries the ability to define your company in a sea of competitors, it can also inspire viral word of mouth marketing from people who love you and want to express that to a large audience, whether because they’re influencers with their own followers, or reviewers.

Bad things are worse than good things are better

We are hardwired as human beings to be more sensitive to negative events than positive events. And this sensitivity only increases when we’re in a heightened emotional state – focusing on the negative becomes even easier.

As odd as it may sound, this is good news for those of us in the business of relieving pain points. You’ll get more appreciation from your customer by removing pain than creating delight. So, if a customer comes to you with a problem, you can expect them to be in a heightened emotional state, which means not only should you tread carefully, you’ll do well to relieve their most urgent pain points as soon as possible!

As a species, negative consequences take an enormous toll on us. In fact, we’ll go farther out of our way to avoid negative consequences than we’d go for positive results of equal measure (it’s called “Loss Aversion”). This behavior is predicated on the emotional truth that something bad feels worse than something good feels better. Losing $20 might wreck your day. Finding $20 may make you happier for an hour.

How does this translate to CX?

Vanguard, one of the world’s largest investment companies, was getting ready to redo its site, and rather than just considering customer acquisition, or lead-generating instruction, they studied how people felt about investing. They looked at whether their target audience was new to investing, had been investing for a while, and what their emotional baggage might be around the topic of investing in general. They discovered that, new or experienced, most people feel overwhelmed. Now, if you visit Vanguard’s site, their design is very simple, even sparse. They knew that visual clutter would only enhance the feeling of overwhelm. Their new design reduces it.

Delta airlines also makes a point to reduce customer pains. They set up their phone systems so that if you call in response to getting a text message saying your flight was canceled, their automated phone system will put you straight through to the appropriate person rather than route you through a dozen exhausting options.

United Airlines has been working diligently to improve its public image by tackling some of its thorniest customer experience pitfalls, like lost luggage. The airline recently introduced a service that lets fliers follow their luggage on the United smartphone app, and get text message alerts if their bags miss their destination. Instead of being angry and frustrated by lost bags, passengers are calling this “Amazing” customer service. As one passenger told the Huffington Post:

After I arrived, I received a text message alert that one of my two bags did not make it and would be delivered to my address within 24 hours,” she says. “I also received an email where I could track my bag, see who was delivering it and at what time. At no time did I have to wait in line or on hold for them to rectify their mistake. They simply took care of it and kept me informed every step of the way. To me, that was amazing customer service.

Amazon offers one of the most loved customer experiences, some argue, because it provides “an unparalleled sense of emotional satisfaction.” How do they do that? Not through being especially warm and fuzzy, but by reducing pain points with features like multiple wishlists, a save-for-later area, an easily accessible cart, and even more easily accessible price comparisons, along with shipping cost reduction and the nearly instant gratification of Prime. If and when a customer does have a problem, returns are easy and customer service gets top marks.

A lot of bad customer experiences are ‘death by a thousand cuts’ annoyances. Avoid exacerbating pain in an already painful situation, and the better the customer’s perception of their experience will be.

Emotions lead to loyalty – the key to growing SaaS businesses

Emotion is linked to loyalty (and CX is linked to emotion). In the hotel industry, which has the largest percentage of customers that reported feeling “valued” one study reported, 88% of the “valued” people will advocate for the hotel brand, and more than 75% will stay with the hotel brand.

The TV service provider industry, unsurprisingly, has the largest percentage of customers who report feeling annoyed. Only 8% of these annoyed people express willingness to advocate for the TV service provider, and just over 1 in 10 intend to keep their existing relationships with the provider.

For the SaaS industry, retention is a key metric for profit and growth – you can’t afford to annoy, disappoint, or frustrate your customers. Essentially, customers are 5 times more loyal when they feel valued, than when they feel annoyed.

The most important emotions for loyalty in the U.S. are, in fact, feeling valued, appreciated, and confident.

For example, there’s something about Slack that makes you feel confident (and a bit cool) that you’re part of something that’s on the leading edge. That’s not just because Slack is relatively new – they engender this feeling on purpose with Slack release notes (which are hilarious, self-deprecating, and charmingly relatable) that make updating the app a pleasure. Not only do they manage to keep everyone up-to-date, they remove the significant pain of updating an app and replace it with a positive emotion.

Note: Positive emotions that drive behavior like repurchases and advocacy differ by country and culture, even by customer base. In the UK, Germany and France, for example, the top three loyalty-inspiring emotions are slightly (yet significantly) different.

Positive Emotions that drive behavior
Source: Forrester

Loyalty weakening emotions differ by country and culture too. U.S. customers share their loyalty-weakening emotions with their U.K. friends.

Emotions that weaken customer loyalty
Source: Forrester

Be sure to understand the emotions of your specific customer base rather than make assumptions.

Interestingly, customer loyalty itself comes in multiple flavors. Loyalty can mean retention (the customer will maintain existing business), enrichment (a customer will buy additional products and services), advocacy (the customer will recommend the company).

Do you know how your customers feel about their experiences with your business?

How to Measure Emotion in Customer Experience

Most CX measurement programs don’t quantify customer emotions – they focus more on metrics that reflect a rational or cognitive evaluation of experiences. Maxie Schmidt-Subramanian, senior analyst at Forrester, says businesses can begin measuring emotion in CX by first defining metrics that measure critical emotions in influential experiences (the ones with the highest impact on customer relationships).

Yes, that means you’re making it up as you go along. You have to figure out for yourself which metrics effectively measure emotion for your customers, in your context. One way to do this is by tracking sentiment in Voice of Customer data – people convey a wide range of emotions with the words they use. Some companies, like Lenovo, use text analysis software to measure changes in sentiment scores, alerting when sentiment falls below a certain threshold.

Using a sentiment analysis tool, you can track positive or negative themes and dig into specific words most often used by your customers to describe how they feel. You can also mine customer feedback and questions, or any other written message from your customer to you. Of course, the most straightforward way to get Voice of Customer data is through surveys, and if you time your surveys right (and ask in the right channel), you can begin to tell what events trigger which emotions.  

Whichever method you choose to get your emotion metrics, the goal is the same: to define the emotional context customers have around your product, industry, and specific touch points in your sales funnel, onboarding process, and usage. From there, you can identify and alleviate pain points, gain loyalty, and win brand advocates.

Prove the value of emotion to yourself first

Emotion is a relatively ‘wooey’ topic. It’s still considered soft. It’s not taken seriously by many. So make it your mission to prove the value of emotion early on in your program by first targeting the highest-emotion touch points, and developing experiments for how to improve customers’ emotions around those experiences. Then track your success rates.

But remember, emotion is contextual, and you don’t have control over the entire context of a customer’s experience. That said, companies who value customer loyalty are willing to go to creative lengths to keep customers feeling good about their brand. Join them.

Win customers for life. Start getting Net Promoter feedback today with InMoment.

In-app, Email or SMS Surveys? How to Choose the Best Customer Feedback Channels for Your Business

Omni-Channel Customer Feedback

You know your business inside and out. You know that listening to customers and responding to their needs is the key to staying competitive. Still, you might be struggling with where and when to survey your customers. A pop-up survey in your web app? Send them an email? What about a text message on their mobile phone? Figuring out the most effective channel to ask for feedback can be confusing.

The good news is that you have more options than ever before.  We’d like to help by giving an overview of where companies are engaging their customers, and how multiple channels can work together. Then, you’ll be better equipped to develop a plan that best meets your company’s unique needs.

Why take advantage of multiple feedback channels

Start with a customer-focused approach: when, where and how do your customers want to give you feedback? This inquiry can quickly lead to a multi-channel approach.

Fight survey fatigue

An improved survey experience helps you maintain high response rates. Not every customer wants to fill out an in-app survey, not every customer opens email in their inbox. However, a lot of people do want to give feedback, and appreciate the opportunity to do so. So your goal is to get more and more sophisticated about the “where and when” over time.

Reach more stakeholders, in the right context

When you leverage more than one survey channel you can expand the pool of users you’re hearing from. You may have an email relationship with some customers, and in-product engagement with others. A multichannel approach also lets you choose the right channel for a given interaction, and to customize your Voice of the Customer program for your business model.

Which Customer Feedback Survey Channel is “Best”?

Is one survey channel more brand-oriented or more transaction-oriented?  Which is the best? This is a very common question. We think the most important factor here is when you survey, rather than which channel.

Here’s why. If you send an NPS survey right after purchase, you can expect that response to be more influenced by that last transaction. However, keep in mind, an NPS survey triggered by a transaction is still colored by the brand experience.

To help you think this through, here is some information about the different channels:

Email: Lower response rates, but higher rates of qualitative feedback. Think about it: How often do you take the time to open emails from businesses, let alone respond? However, those customers who do take the time to answer a customer feedback survey via email are more likely to be invested in your brand and take the time to write comments that provide more detail to the “why” behind their score.

In-app (Web or Mobile): Higher response rates, lower rates of qualitative feedback. In-app surveys can deliver contextual feedback, and we find that customers will answer the question they are asked. They are absolutely willing to provide higher level feedback when prompted in a web or mobile app. This is why customer experience management platforms offer feedback tagging, sentiment analysis, and other means of gleaning insight from the fire hose of data that many companies receive via in-app surveys. Nonetheless, fewer in-app respondents will take the time to give qualitative feedback.

The high response rate that in-app NPS surveys deliver can be a positive trade off, especially for SaaS businesses focused on reducing churn. You may prefer to get a gut impression that you can follow up on rather than radio silence from a passive or unhappy user that ignores an email survey.

SMS:  With transactions, deliveries, and services, sometimes texting is the most effective and immediate way for you to interact with customers. It also allows you to grab customers in the place they tend to spend more and more of their time – on their mobile phones.

So, really, it’s not about which is better. The question is, “Which channel or channels are the best fit for my business and my customers?”

Scenarios Where Using More than One Customer Feedback Channel Makes Sense

1. Targeting Distinct Stakeholder Groups with Different Survey Channels.

Consider the enterprise sales model as one that can benefit from both in-app and email surveys. Here we are talking about a SaaS company or other business with a very strong digital presence. In this example, your company is using the Net Promoter Score system to measure customer loyalty.

If your brand is an online product, we’ve seen huge success when you choose in-app surveys as your primary channel. This is because end users of a SaaS product relate to your company through your digital platform. They probably don’t open your marketing emails because they aren’t looking to be sold to. They just want to do their thing in your product everyday. For them, it makes sense to give NPS feedback in-app, and they are mostly likely to respond there.

Now consider some executive stakeholders or buyers of your platform. They don’t spend as much time in your product (if any), but you definitely want to know their opinion. For this group, delivering an NPS survey via email is likely the way to go, and email gives you a higher chance of getting qualitative feedback in their response.  

So, in this case, it’s the combination of in-app and email surveys that gets you the info you need. 

2. Reaching Customers Throughout their Journey

E-commerce is an interesting use case here. The e-commerce business often has a couple of different customer survey touchpoints: online and offline. Every customer needs to place an order–typically on a website or mobile app. It can be valuable to learn how a customer feels after the ordering process, and that survey can often happen in the web application.

Once the product is delivered, the customer may register delight or dissatisfaction. For e-commerce businesses, it really makes sense to capture that sentiment via email or SMS because, honestly, if the customer had a bad experience, they’re probably not going to come back to your site to give you feedback.

The power of those two surveys together—one in-app and one via email—can give you an insightful story of the customer journey, and it can only happen by tapping into multiple feedback channels.

3. Surveying Customers Across All Lines of Business

As companies evolve and develop new forms of business for growth, customers of those different products might require distinct feedback channels. A good example is a technology company that hasn’t fully migrated to the cloud and still has legacy software offerings. These types of businesses in transition have a software user base “on premise,” where the only option is to do an email survey. Newer, cloud-based offerings from the same company can opt instead for in-app surveys.

Here is another example. A media company might get in-app survey feedback from subscribers or readers who visit their website. However, the same company may find that email surveys are a better channel to reach customers that receive subscription services via home delivery.

4. Improving Response Rates among Low Engagement Customers

Supplementing one channel with another may help you get a higher response rate.  For example, if you start your feedback program with in-app surveys and you find that certain customers just aren’t using your application that frequently, or aren’t receptive to an in-app survey, then you have the flexibility to try another channel. See what those customers prefer to respond to–try an email survey, try SMS, or try surveying in a mobile app if you have one. That way, every customer’s voice is being heard on their terms.

5. Evolve to Reach Your Customers Where They Are

There are times when companies communicate with customers primarily through SMS. Think about your mobile provider, bank, airline, or ride share service. You expect to hear from them through that channel and count on the immediacy that texting provides. This is when it makes good sense to survey through SMS in addition to other channels, particularly for transaction-related feedback.

You’ve Got Choices

There are times when “it just depends.”  Multi-channel customer feedback gives you the flexibility to survey customers based on the way they prefer to communication with your business. It lets you engage a broader segment of users across multiple touch points and lines of business. You can get the big picture, each step in your customer’s journey.

And, it lets you meet your customers on their terms. Don’t risk filling your customer’s devices with unwanted messages. The sensitivity that multi-channel feedback offers can help you avoid survey fatigue. That means higher quality feedback to help you grow your company.

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Net Promoter Score for Startups: Saastr’s Jason Lemkin and Wootric CEO Deepa Subramanian on NPS as a KPI

Jason Lemkin, the founder of SaaStr, interviewed Wootric CEO and cofounder Deepa Subramanian at Dreamforce 2016, getting her thoughts on best practices for Net Promoter Score for startups and learning how – in two short years – she grew the NPS platform she built herself into a runaway success with users in 75 countries around the world. Here are highlights from the interview!

How Deepa built Wootric from code to customers

Jason: Deepa, tell us about what Wootric does, how big you are, and any other core metrics.

Deepa: Well, to give you some context, I was a very early engineer at Salesforce, starting in 2003, and it’s been kind of a wild ride since. I went to law school. I practiced law for a bit. I ran Schmendricks bagels, my first foray into entrepreneurship.

But my true passion is technology so this is where we are. Wootric is a Net Promoter Score tracking platform that helps companies boost customer happiness. This is what we are today. But what we really want to bring to businesses is intelligent turn-key customer feedback management that helps them align the entire company around the customer and customer experience metrics. Like NPS.

Jason: Let’s talk a lot about that. But first, just because of your background, let’s go back in time. How is building software today different than it was when you were at Salesforce? And what surprised you about building software today?

Deepa: That I could do it. I mean, I built Wootric, just me.

Jason: Just you?

Deepa: In this universe, with AWS and Heroku, my first six months of MVP cost me nothing. I was able to manage the entire stack — whereas when I joined Salesforce, I think we were over a 100-person company. You needed 11 developers and a whole infrastructure team.

Jason: So you built the prototype, or even version one, all by yourself in six months?

Deepa: It had actually been about 10 years since I coded, so what I did was work for two weeks with a consulting company called Thoughtbot, where we peer programmed the MVP, and then I took it on.

Jason: So that de-rustified you. And then you brought on the rest of the founding team?

Deepa: Jessica Pfeifer is actually a very old friend of mine. She is a brand marketer, most recently at Clorox. But I knew that before Harvard Business School she had been a marketing consultant in China running what were basically customer experience survey programs.

I did a user interview with Jess at her kitchen table, and it was so productive and so exciting that I said, “Jess — you need to come work with me. How do I convince you?” She’s one of those people who goes by her gut, and she said, “I’m going to do this with you.”

Jason: When did you decide to expand the team? Was it when you got your first paying customers?

Deepa: I think it was after we raised our first round of financing.

Jason: Well that certainly helps, to pay their salaries. And how much did you raise?

Deepa: Jessica and I raised $2.5M from Cloud Apps Capital and others.

Jason:  Just the two of  you? That’s pretty badass. It’s certainly a testament to you. Did you have paying customers yet?

Deepa: We had in the range of 10 or 15 customers at the time who could be referenced. This was in April, 2015.

Jason: What did they say they loved about Wootric that helped convince your investors?

Deepa: Two things. First, the end-user survey experience. I think they thought this was so unique, since NPS products tended to focus on the experience of the person giving the survey.  The other thing was that it took them just a few minutes to install. Which for the enterprises we were talking to – they had never seen anything like that.

Jason: This makes me curious, and I’d like to back up for just a moment. How did you get the first 10 customers? Where did they come from?

Deepa: Hustle. The very first few important customers were basically my network, talking to CMOs, customer success. 

Jason:  If the first 10 customers were hustle, where did customers 11-100 come from?

Deepa: All inbound.  We have this viral component–people saw the survey. They loved it, and they were, like, “Who is this?” And they clicked on the “powered by Wootric” in the survey. So, the next big five customers came in virally. Today, we have over 100 paying customers. It’s been a third virality, a third content marketing, and a third partnerships.

Basically, what I’ve learned is if you want a repeatable, scalable outbound sales model you need to have sales professionals come in. We’ve now brought on two AE’s and these are very unique individuals. They’re good at what they do, but they’re very creative. They know that this is not something that’s been figured out already and they’re ready to listen, give me feedback, work on this model. One of them has a strong B2C Rolodex, and he understands brands really well. The other is much more experienced selling to SaaS companies, B2B organizations.

Net Promoter Score from vanity metric to KPI

Jason: Okay, let’s shift the conversation to talk a little bit about NPS. Let me start with the transformation in my thinking. I used to hate NPS, and here’s why. My experience working with NPS at a Fortune 500 company was that it was an excuse for mediocrity. You could have a stale product that was no longer competitive in the market, but your existing customers loved it because they were used to it. Thus, you could see very high scores in very mediocre products. That turned me off.

Then I started to work with a few dozen SaaS companies and they all tracked NPS early. At that point, I saw the magic, and now I am a big proponent. So, what’s changed NPS? Maybe I’m viewing it wrongly, but I think there’s almost been a revolution how people think about it.

Deepa: NPS used to be looked at a vanity metric, but now people have realized the power of using this as a period-to-period key performance indicator (KPI). That’s when it becomes really powerful. Companies have also come to realize that NPS is not a program that you run once a year, or once every six months. You want to incorporate it into your ongoing reporting. Also, people have realized that the data is applicable across the organization, beyond just Insights or Marketing. 

Setting up an NPS program? Get the ebook, The Modern Guide to Winning Customers with Net Promoter Score. Leverage customer feedback to drive growth with a real-time approach to NPS.

Jason: Should NPS be one of the top 5 or 6 metrics for the whole company?

Deepa: Absolutely. It should be a board metric. 

Jason: Everyone in the company should be responsible for NPS.

Don’t be spammy about NPS surveys

Jason: Some folks get worried, especially if they haven’t done NPS before, that they’ll annoy their customers if they ask them for too much too often. And I know if you use something like Wootric, the bar is very low. It only takes 60 seconds or 30 seconds. But should I be worried about asking for too much feedback from customers?

Deepa: Absolutely, you can’t be spammy about surveys. Wootric’s so end-user focused–very careful about right question, right time, right customer, right device. And all of this needs to be coordinated. If you have the resources to do it yourself by all means do it. But Wootric can do all that for you.

Jason: How often can I survey my customers, at least for NPS, without asking too often? What’s the right cadence?

Deepa: It really depends on the business. Let’s take a SaaS company for example. If your customers are engaging pretty frequently in your products, I would say once every three months. But what you want to do with that is get a statistical sample. You want to smooth out the collection so that you’re talking to everyone over the course of that three-six month period.

What about segmenting NPS by user group?

Jason: How much should I segment my NPS by customer base?

Deepa: It kind of depends on the size of your user base. That said, segmentation is really useful. If we’re talking about SaaS companies, you want to know how your enterprise base is doing, versus your plus level customers, and so on.

Jason: If you segment between small, medium and large you’re often going to see very different data in those segments, right?

Deepa: Absolutely. But if you don’t have statistical numbers in each of those groups, then your score is just going to be noise [focus instead on the qualitative feedback you are getting.] So you need to think about how big is each user base and whether the numbers are actually significant.

What if I have a low Net Promoter Score?

Jason: Here’s another high level NPS question. What if my NPS is low, say ten or worse?

Deepa: Do not fixate on a low score number. Just worry about moving it and worry about the trend. Your customers are giving you feedback. Take that input, and do everything you can to drive up your score.

Jason: Do you think there are certain industries or verticals that inherently have lower NPS than others?

Deepa: Providing a good user experience is definitely more challenging in some industries. Airlines come to mind. But I don’t want to demotivate any company at the outset. You have to start somewhere. If you don’t measure it, you can’t improve it.

Jason: If my NPS is lower than I like, how much can I change it in one period of time? What’s a reasonable expectation? Let’s say I’m at 20, and I want to be at 40. What’s the right goal, and how quickly can I expect results?

Deepa: I think the right goal is a couple of percentage points every period. You know, maybe one period is one quarter, maybe a period is six months.

But what you actually want to see more is different signifiers, not just the score moving up. For instance, how many passives, which are basically low hanging fruit, have I moved over to promoters. Or how many detractors have I gotten to be passives? How many have I rescued from churning? You do want to move the score a couple of points up, but you really want to dig in a little bit more and have tangible shifts that will lead to score increases.

Jason: Let me ask you one more tough question. What should my NPS goal be for the end of next year? For example, if I’m 20, should I aim for 50 percent improvement next year? If I’m already high – if I’m 60 or 70 – should I aim to maintain it, or go even higher?

Deepa: The goal is the same regardless of the number, to get those promoters to give you the referrals. Get those passives to love you. Get those detractors not to churn. That said, if you trust your program, a concrete goal to strive for would be to get it up every single period by a couple percentage points.

How can startups implement Net Promoter Score early?

Jason: Okay, here’s my last question. I want to implement NPS today. I’m busy, I’m tired, I have a lot going on, but I’m excited, and I want to get started. How do I do this with Wootric?

Deepa: If you’re a web application, you need to install one piece of Java Script, just like Google Analytics. If you have a mobile app, it’s a SDK. If you want to use email, you can do that with us as well.

Jason: Okay, so one line of code or some email addresses, and I can get started…Wootric helps me select the right cadence and the right amount of times to hit everybody?

Deepa: We come out with defaults and you can just go with that. But if you want, our customer success team will step in and advise you.

This interview was edited for space and clarity.  Special thanks to the team at Salesforce for Startups.

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The Real Pros & Cons of Net Promoter Score

I’m biased – I like the Net Promoter Score system, and I’m going to tell you why (in a minute). But, I also think we need an unbiased perspective on NPS, one that airs the dirty laundry, so to speak. Net Promoter Score is both a customer loyalty metric and a system for improving loyalty over time. NPS isn’t a perfect metric. It’s also not a complete system. But, most of the people talking about NPS are the ones touting it, which means you’ll rarely find a genuine report of its pros and cons.

Well, that’s exactly what I’m doing here.

In the interests of transparency, I have to say that Wootric, an NPS SaaS platform, suggested I write this piece and requested that I don’t pull any punches. No punches have been pulled.  This is my take.

Net Promoter Score: Pros 

It’s fiercely honest feedback, identifies promoters, and boards love it

As I said, I like Net Promoter Score. In a world of marketing gray areas, biased Yelp reviews, and silent customers reticent to criticize, the NPS question itself is phrased to get the most honest possible response:

“On a scale of 0-10, how likely are you to recommend this product?”

NPS Survey

Or, as I like to think of it “On a scale of 0-10, would you tell your best friend they should get this product?”

Because that’s what it’s really asking – are you willing to stake your name and reputation by recommending this product?

You’re not asking whether they like the product. That’s subjective, and they’ll just say “yes” to be nice anyway. You are asking whether they would subject their nearest and dearest to this product. And that brings out a whole other side of human character: Selflessness.

I might use a chipped teacup without thinking twice about it, but if I have a friend over, they get the teacup that’s in pristine condition. When it comes to our friends, we want nothing but the best.

Which is why, when you need a completely honest, unbiased report on how your audience perceives your company, an NPS survey is the single best way to get those answers.

Of course, the obvious reason to use NPS is to identify your promoters so you can encourage and amplify their loud, enthusiastic voices that are the real ambassadors of your brand. The less obvious reason is that it’s one of those board-level metrics everyone can easily understand and rally around.

It’s easy on your customers

But here’s the thing about NPS: It’s one question and an open-ended follow-up. The follow-up “Care to tell us why?” question lets customers elaborate on their score.

NPS Survey FeedbackThey get to cut to the chase and tell you what is important to them in their own words.  As surveys go, this is a great user experience. That’s why response rates are so much higher than the old school “This will only take 5 minutes of your time…” multi-question surveys. And, you get rich qualitative feedback out of it. So, really, the beauty of NPS is in its simplicity. Both for your customers and for you.  It does one thing, and does it very well.

The trouble starts when you expect it to do too much…

The Cons: What are disadvantages of Net Promoter Score?

It’s not a miracle solution

“Anytime anyone presents NPS as the “be all and end all,” they’re wrong.” – Jessica Pfeifer, Chief Customer Officer, Wootric

Thanks to being ubiquitous — after all, Net Promoter Score is a metric measured by most of the Fortune 100 — many people expect NPS to do more than is realistic. This is often why “Net Promoter Score doesn’t work.” 

NPS works best within the context of a robust customer feedback & listening program.

For example, Melinda Gonzalez implemented salesforce.com’s first ever NPS program, and her process included:

  • Using the entire customer journey as a framework against which to measure customer experience.
  • Designing a feedback collection strategy with audience segmentation, market segmentation, and customer maturity.
  • Taking action on feedback  – because feedback is only as useful as its follow-through.
  • Responding to customers, so they know their feedback is valued.
  • Measuring improvement targets and adjusting as needed.

I might also add incorporating a brand advocacy program to encourage and leverage promoters, as well as tracking other established metrics like the CSAT that lets customers give feedback on their interaction with your support representatives.

But whatever your recipe for creating and counting happy customers, you’ll need to do more than just send out a single survey.

When companies start paying bonuses on NPS

At Sprint, 20% of employee bonuses are tied to Net Promoter Score. On the surface, that doesn’t seem like the worst idea ever. But think of it this way: Is your goal to improve a score, or to improve your customers’ experiences? They are not one and the same. Telstra, Australia’s largest telecommunications company, also uses NPS, but has focused its call centers to give customers more efficient, more helpful service (and follow-up calls and personalized emails). After implementing these efforts, Telstra saw a 3 point rise in their NPS score, and reduced customer churn.

Harvard Business Review’s Rob Markey puts the issue succinctly: “With incentive compensation, you get exactly – and only – what you pay for. Once compensation depends on improving a particular score, people tend to focus on the metric rather than on what it tells you about what customers want or need.”

Another, related pitfall is that employees who receive compensation based on NPS scores tend to coach customers on how to respond, asking for top scores.

In short, use NPS as a compass to guide you to creating better customer service. Don’t treat the number as the end goal, or you’ll find people gaming the system.

When customers answer The Question, but don’t see follow-through

Aside from the best practice of acknowledging any survey response, whether they be good or bad, what customers really need to see is the company acting on their feedback. With NPS, you’re learning what customers struggle with – but without a process in place to use that feedback to inform your product roadmap, customer success efforts, customer service, etc., that feedback too often comes to nothing.

And your customers can tell.

It’s precisely because NPS is so “easy” that it gets abused in this way. But when you don’t take action based on results, NPS won’t magically move the needle for you. The key is to listen, and then proactively deliver what customers need to achieve their desired outcomes. This requires a Net Promoter cycle.

When you put Baby in a corner (ie. NPS isn’t just a one-department thing)

Don’t put Baby in the corner – if it’s one thing we learned from Patrick Swayze, it’s this. And, like Baby, NPS can’t do what it does best when confined. For example, it’s very useful for customer success, especially with identifying promoters and alerting customer service to potential problems, but it’s not just a customer success thing. NPS does its best work as a company-wide metric that has implications and value for just about every customer-facing department.

  • Product Development uses NPS feedback to prioritize dev resources.
  • Marketing uses NPS to find and ask happy clients to join their advocacy programs (or get valuable metrics to use for case studies).
  • Customer Service/Support uses NPS as a signal for when clients need outreach and support.
  • Sales uses NPS to identify accounts primed for upsells and referrals (NPS is a strong business intelligence tool).

Contending with a firehose of feedback

We’ve all gotten the survey that gives us one box to check, and offers no way for us to explain what has gone horribly wrong with the product, service or company. It’s so frustrating. If you could only explain it, maybe they could fix it, but the fact that they don’t give you a way to communicate just shows they clearly don’t care.

The beauty of an NPS survey is that it does include an open-ended response section, however, another problem can occur.

The open-ended response section of the NPS survey can become a repository for everything from venting, to how-to questions. This can create chaos for the poor chap trying to analyze NPS feedback, and even if the queries are passed on to appropriate customer service representatives, it’s not a system that scales easily. And if you fail to close the loop with these customers, they’ll be even more frustrated.

The beauty of NPS is that it has one job – don’t make it pull triple-duty as the primary communication outlet.

If people are asking questions via NPS survey, it might indicate that they don’t feel able to elsewhere. Do you have a strong FAQ or Knowledge Base available? Is it easy to contact Support?

Hearing from more customers is a good problem to have, but it can be a challenge. But even if you have multiple channels for communication, you’ll still need a good way to categorize the qualitative data you do get via the survey.  In fact, that is why NPS companies like Wootric offer sentiment and keyword analysis of the qualitative data that their customers receive.  Start by creating categories and tagging responses so you can see where most of the issues are.

So, let’s sum it up…

What are Net Promoter Score Pros and Cons?

Pros:

  • Quantifies customer loyalty
  • Rich qualitative feedback
  • Identifies brand advocates
  • Higher response rates than multi-question surveys

Cons:

  • Not comprehensive. Complement NPS with other metrics, like CSAT
  • Tying compensation to NPS may skew results
  • Requires analysis of qualitative feedback

What limitations have you experienced with NPS?  How have you used NPS to create real positive change? Tell me in the comments below or share your thoughts @NikkiElizDemere on Twitter.

NikkiElizabethDemereNichole Elizabeth DeMeré is a SaaS consultant & Customer Success evangelist. She is the founder of Authentic Curation, and serves as a moderator at @ProductHunt@GrowthHackers.

Start measuring Net Promoter Score for free with InMoment

The Future of Net Promoter Score is Here: from Lagging Indicator to Crystal Ball

Revenue growth and profitability – are the two metrics the C-Suite cares about the most. They tell you exactly how you did this month or quarter. But do strong sales predict next quarter’s results? Hardly.  

What if the C-Suite had a crystal ball that could not only predict their growth and profitability, but give  glimpses into the minds of their customers in time to save accounts that might otherwise go under?

We haven’t really had that capability, until now.

Traditionally, Net Promoter Score has been a “lagging indicator.” NPS surveys were typically sent out once a year, or once a quarter at most. There would be a big push to get the survey out, another push to respond, and then a mad dash of trying to piece together what happened during that time to result in the scores received.

But modern NPS programs are different. They can be that crystal ball.

Customer Experience Predicts Growth & Profit

More studies and reports are coming out by the day proving that Customer Experience is a key predictor of growth and revenue – for every type of company, business, product and service. It’s not just a “SaaS thing.” Brick-and-mortar businesses are optimizing for it too, and seeing results.

One of these reports, The Economist Intelligence Unit’s, The Value of Experience: How the C-suite values customer experience in the digital age, found that companies that prioritize investment in customer experience (CX) have better revenue growth (59% vs. 40%) and higher profits (64% vs. 47%) than companies that don’t prioritize customer experience.

McKinsey & Co. found that  “Optimizing the Customer Experience typically achieve[s] revenue growth of 5-10% … in just two to three years.”

And, there’s no better way to optimize for customer experience than by using the NPS metric.

NPS = Customer Experience

There are so many ways to ask about customer experience. You can send lengthy surveys and open-ended questions; you can ask customers in person or over the phone. But there is no question – or list of questions – that reveals the unvarnished truth like the NPS question:

How likely are you, on a scale of 1-10, to recommend this product?

In-app NPS Survey- Wootric

Customers don’t have to worry about hurting your feelings or protecting the job of the “very nice customer service rep” who didn’t help them at all. They just have to choose a number. And, by framing the question as whether they would recommend the product, you tap into a very honest desire to help other people (help them by sharing great products, or help them by warning them away from bad ones).

With one question, NPS gets to the core of whether customer experience efforts are working, or not. This is what makes it the ideal tool to help teams optimize for customer experience. Budge this one, simple number, and you’ve got real progress.

In Fred Reichheld’s The Ultimate Question 2.0, he includes a revealing, real-world example of NPS in action:

Phillips electronics tracked NPS for a sample of accounts over time and found that where NPS increased, revenue grew by 69%. Where it remained steady, revenue grew only by six percent. And where NPS declined, revenues actually decreased by 24%.

Modern NPS = Crystal Ball

What is the difference between NPS and a modern NPS program? Part of the difference is in how the surveys and tracking are managed. A modern NPS program has an easily navigable dashboard that shows you your current scores and compares them to previous ones, lets you see trends clearly, displays qualitative feedback with the quantitative score, and records all of these results in one, central location.

But convenience isn’t the most important difference between the old ways of conducting NPS surveys and cutting edge NPS.

The most important difference is the ability to get NPS results in real-time.

This capability is what gives modern NPS programs the ability to act as leading indicators of customer experience, and by extension, growth and profit.

By polling different customers every day, your customers don’t get over-surveyed (so their response rates improve), and you can see the results of your customer experience efforts immediately, and pivot accordingly.

No more wasting time on customer experience strategies that don’t work. No more wasting resources on measures that don’t actually delight your customer base. If something works, you’ll know it. And, if something doesn’t work, you’ll know that too.

But the crystal ball of modern NPS can do one more thing: Let you catch a glimpse into the minds and hearts of your customers. Along with the basic NPS question, the survey offers a qualitative response screen that lets survey respondents tell you why they scored the way they did. Then, it lets you read those responses, tag them by theme (like “Feature Request“), and send them on to the appropriate department, like “Product Team” or “Marketing.”

Wootric NPS Survey - Feedback Screen

The customer receives an appropriate response, improving their experience as a result of taking the customer experience survey.

Not even crystal balls can do that.

A modern NPS program is an incredibly powerful tool that lets you track customer experience in real-time and easily identify actionable insights.

Get our ebook, The Modern Guide to Winning Customers with Net Promoter Score. We’ll show you how to modernize your NPS program for the most successful year ever.

Start measuring Net Promoter Score today with InMoment.

How to Get Higher Response Rates in the Age of Survey Fatigue

Fred Reichheld invented the Net Promoter Score (NPS) survey 14 years ago to better gauge customer desires and loyalty, and the practice quickly caught on. But when Fred himself announces that he’s sick of customer feedback surveys, you know we have a problem.

There’s no question there is a tsunami of surveys that’s just overwhelming. I think of it as a little bit of a pollution effect that we have to find a way to overcome. – Fred Reichheld

Customer surveys are everywhere. After you hang up from a customer support call, you are almost guaranteed to receive a request to complete one. There are probably at least a handful in your inbox right now.

Surveys are critical to any voice of customer (VOC) program, but they require thoughtfulness, and intentionality.  Don’t just send another email with the subject line, Your feedback is important to us, with content like this:

Please take 3-4 minutes to complete a short survey about your phone call to us on Jun 15 2016 10:23AM. Your feedback will be used to make future improvements to the customer experience. To take the survey, please click on the link below.

Or even worse, a survey email we received that actually ended with this:

Unfortunate Survey language

Nothing makes a customer feel more valuable than a request to write a letter (what is this the 80s?), or a caveat that their feedback will not receive a response. There are much better ways to solicit customer feedback  — ways that avoid the “pollution effect” and get more customers engaged. Below are tips for getting a higher level of response when reaching out to your valued customers. 

The Key is to Put Yourself in Your Customer’s Shoes

A solid place to start is to ask if your survey process is adding or detracting from your customer’s experience of your brand. You may be surveying customers in order to gather feedback that you can use to make them happier, but is your survey strategy part of the problem? To answer that, think through these five aspects:

1) Resist the dreaded “3-4 minute survey”
Unless absolutely necessary, only ask one question. The
NPS question:

How likely are you to recommend this product (or service) to a friend or colleague?

Why? NPS let’s you metricize customer loyalty, and the open-ended feedback question allows customers to get specific about what’s important to them. Instead of surprising your customers with more than they bargained for, consider NPS as a method for receiving actionable feedback in a way that is low impact on customers.

In stark contrast, the “3-4 minute survey” referenced above was actually comprised of 30(!) questions mainly in the following format: “How satisfied are you with _______________ on a scale from 1 to 10?”

 How tedious is that? And by extension, how accurate? Nobody is going to fill this out unless maybe they want to share about a negative experience or have plenty of time on their hands. That means that the “randomly selected” cohort is not going to be that random.

Excessive questions contribute heavily to survey fatigue. According to SurveyMonkey, data suggests that if a respondent begins answering a survey, there is a sharp increase in drop-off rate that occurs with each additional question up to 15 questions.

2) Reduce friction

Our inboxes are ground-zero for survey fatigue. For example, the last time you returned from vacation, how long did it take to return to inbox zero? Did you even bother to read half of the mountain of emails you faced?

The trend is for communication apps to replace email whenever possible, and NPS is no exception. Consider an in-app solution for an experience that doesn’t require the user to remember every specific detail of their encounter, and can give you real-time contextual feedback from customers.  It isn’t unusual for in-app response rates to exceed 40%. At the same time, in-app is less intrusive because customers can easily dismiss or ignore the survey if they are busy.

Two-Step-in-app-NPS-Survey

And for businesses who still choose to interact via email, embed survey questions for higher response rates and less friction. A great example of this (and one you have likely seen) is gathering feedback on your support. Here is a way to integrate feedback without asking the customer to open yet another email.

Feedback survey embedded in email

3) Don’t pester

How often should you survey? Well, how often is your product changing? Are you introducing a new feature set all at once? Making significant UI tweaks every week? If you aren’t changing that rapidly, then maybe asking for feedback quarterly is ok. If not much has changed, then check-in less frequently.

If you want to gain insight into your customer journey, ask for feedback from customers at each milestone along the way. Just don’t ask the same customer at every point in her journey.

If you are asking customers to fill out a survey after every transaction, know that can be a major contributor to fatigue. An example of this is when dining at a restaurant, and the waiter appears constantly to check if “everything is ok.” It won’t be long before what is intended to be great service has the outcome of you being pestered. (Not to mention that the word “ok” is off-putting, because it suggests a mediocre experience.) 

A skilled waiter, like anyone who services customers, will be invisible and will only interrupt the experience to guide it along. They may offer only one specific question at a natural time in order to rate your main experience – “How are you enjoying your salmon (or other main course)?”

No matter what service you provide, you never want to overwhelm your customers. Instead you want to be sparingly curious. If your intention is to provide a vehicle for feedback after each transaction, consider framing it as “is there something we should know?” Sending a “Please complete this survey” is akin to over-serving a table.

By simply shifting the language, people no longer feel pestered. They know that they have a conduit for feedback, framed as a subtle request in case they ever feel inspired to share. They know that representatives of your company are always standing by to listen.

4) Don’t over sample

Many app users switch between desktop and mobile, so you don’t want to double-dip with your requests. Make sure your survey mechanism can see your user’s activity across platforms and take this into account.  

Over-sampling can also happen when multiple departments are surveying customers. Product or Marketing may ask a customer for feedback on your SaaS product or service, and then the customer initiates an unrelated interaction with support, only to get asked again by Customer Support.

The net impact for the customer is, “Hey the right hand doesn’t know what the left hand is doing at this company. I just answered a survey!”  Being clear about the purpose of each survey can help. The best way to handle this is to have one Voice of the Customer (VOC) champion that has the big picture of what customers are being asked and can coordinate NPS (and all survey) efforts, and avoid the faux pas.

5) Be sure to close the loop

If a customer takes precious time to fill out your survey, be sure to thank them.  Better yet, get back to them about the results of the survey and what you are planning to do as a result.  

That kind of transparency is refreshing and demonstrates that you take feedback seriously.   And guess what? That customer will be more likely to open and respond to a future survey.

Always Consider the Customer Experience

The basic principles of customer experience are the same whether you are offering SaaS or grass-fed steak. When it comes to gathering feedback, empathize with your customer’s survey fatigue and err on the side of less is more.  Your customers will be more likely to respond to your surveys.

Get higher response rates today. Signup for free in-app NPS with InMoment.

A 4-Step Process for Aligning Every Employee Around Improving Customer Experience

The name of the game is collaboration. You may have an engineer delivering excellent code, or a business development associate pursuing opportunities for long term growth. If they aren’t working collaboratively with others on the goal of providing a fantastic customer experience, they are holding the company back. Read More…

Eight Principles for Improving Customer Experience with NPS

In my last piece I shared my thoughts on the why Net Promoter Score is so popular. I’ll now share the NPS program model I recommend. It’s intended for the novice NPS program owner, as well as the veteran NPS program owner who isn’t getting the expected traction or results. This model has evolved since the four years when I implemented salesforce.com’s first ever NPS program across 15,000 employees. I’ve since modified it to make it more agile to fit the needs of small and mid-size clients. Read More…

How to Segment NPS Data to Understand the “Why” Behind Your Score

Net Promoter Score (NPS) is the popular metric that shows you how well your company is doing at the job of keeping customers happy. A high score means that the folks who really love your service or product vastly outnumber those who’ve had a negative experience.

That’s valuable information, but a single number doesn’t tell the whole story. In fact, just relying on your company’s NPS could be limiting your ability to attract and retain customers. We’ll explain how segmenting NPS data can be easy, and why it is important to a successful Net Promoter Score program.

What Is NPS Segmentation?

Even if your company provides only one service or product, your customers are not the same. Categories of users have different needs and are bound to experience your company in a slightly different way.

Segmentation lets you slice and dice and see the NPS for particular user groups of your business and determine how you’re faring quantitatively. You’re able to figure out whether everyone feels equally or if the big number is being driven up by one segment and down by another. You then have the ability to make your product or service better for users in those precise segments that lag behind the curve. Thus, it is a very efficient tool for improving customer satisfaction.

Historically, NPS segmentation has required the laborious process of sorting NPS data and qualitative responses in Excel spreadsheets. Using a modern NPS platform like Wootric automates this process, providing segmented customer data in real-time on a dashboard.

Segment NPS Data by Business Drivers - Wootric Dashboard

Need a Place to Start with Segmenting your NPS?

You can segment by any property that you have on your users – if you’ve dreamed it up as a segment, you’re probably already capturing that data somewhere in your system. (Note: Segment.com users can capture and segment NPS data automatically with this integration.)

Typical customer properties you may already be collecting include:

  • Account creation or purchase date.
  • The type of product or service that your customers use or pay for.
  • Revenue associated with the customer.
  • Size or type of business, such as Small Business or Enterprise.
  • Customer Persona or other profile info such as Role/Title, Age, etc.
  • Location

Setting up an NPS program? Download the free ebook, The Modern Guide to Winning Customers with Net Promoter Score.

Take Into Account Your Business Model

The Wootric platform doesn’t have any default segments set up for our customers; we know that every company is going to define for themselves the segments that will provide the best insight into their business. That said, in the course of coaching our customers to set up successful NPS programs, we have seen that various business models tend to want to analyze their data in similar ways. For deeper insight into your overall NPS, use these ways of segmenting users as a starting point:

Software as Service (SaaS)

  • Pricing plans, product plans, and cohorts (customer longevity). Does customer satisfaction grow the longer users are with the company? Is there a difference in the NPS of an enterprise customer versus a pro plan user?
  • Account-level NPS is particularly useful for Customer Success and Sales Teams that need to monitor the health of large accounts with multiple users. Problems can be quickly identified and proactively addressed to prevent churn.

Marketplace

  • User Personas. It makes sense to segment marketplace customers into different “buyer/seller” user personas. For instance, you might have both employers and employees using a recruiting platform and want to isolate the NPS of each group to find out their level of user satisfaction.

E-commerce

  • Stage of Engagement. For our e-commerce customers, segmenting feedback from the time of purchase to the moment of delivery produces useful results.
  • Purchasing patterns are another valuable way to segment customers in this industry. For example, what is your NPS for customers who spend more than $1000 a year as opposed to those who spend less than $200? Are you drawing in people who purchase shoes than purchase apparel?

Website Visitors

  • Device, Geographic Location, Browser. While you don’t have personal information for your NPS survey respondents, you still have information that may be useful to you. For example, what is your NPS for site visitors on mobile versus those that experience your site on their desktop?

Try an Innovative Way to Segment Your NPS: A/B Happiness Testing

Another valuable use of segmentation is to perform A/B testing on different versions of your product or website to see which one yields a higher level of customer happiness. Likewise, you can test a new product or feature on a small subset of customers, using the tool to track their satisfaction until you’ve achieved a high enough level to warrant the product’s general release.

What are the Benefits of Segmenting NPS Data?

When you isolate NPS score by segment, you get a far more meaningful measure of customer satisfaction than you do by looking at a single number — it’s unlikely, after all, that promoters and detractors will be evenly dispersed among all the segments, or that they will have the same desires or delights. This approach lets you know which group of users are your happiest. It also helps you to prioritize your challenge areas so that you know how to take meaningful action to remedy the situation.

The analytical ability to drill down and answer the “why” is much easier with segmentation. It gives you demonstrable evidence of where the key drivers of your business are, which is something that the CEO will want to know off the top.

Segmenting your NPS score also helps you deploy your resources efficiently. Ideally, you can make all user segments happier. But since most businesses need to make trade-offs, segmentation lets you prioritize improvements that boost NPS among user groups that drive the most revenue.

Escape from Excel: How to Automate NPS Segmentation

An NPS survey platform can automate data segmentation, maximizing efficiency. Here are the three steps to do this in Wootric:

  1. Determine which segments are the most valuable measures of your business’s customers.
  2. Include customer properties in your Wootric installation (instructions here). Note: If you use Segment.io to collect customer data, you may not need to involve a developer. Marketers, customer success, or other non-technical employees can pass user properties to Wootric themselves with a few clicks.
  3. Log into your Wootric dashboard to view:
    • NPS by user segment – daily, monthly and by custom period and trends overtime.
    • See Promoters, Detractors and Passives by segment.
    • Sort and respond to user feedback by segment.

Once set up, all NPS survey responses will include your customer properties. It’s a fully automated survey process that gives you NPS data and qualitative feedback you can view through filters you control on your Wootric dashboard. No more excel sheets, no more number crunching after the fact.

And of course, Wootric is always available to consult with our customers. We’re happy to provide extra guidance to help you get set up with segments that are optimal for your business. Everyday, we see how well-executed NPS programs are helping businesses to grow, and we want yours to be successful too!

4 Interesting Ways Slack & Other Brands Use Net Promoter Score Data

The most successful companies are those that take NPS data and use it to fuel and direct their marketing methods and even product development.

But while obtaining your NPS is easy, knowing how best to use the information is anything but. Ask any rocket scientist. Many of the highest-tech rockets don’t make it to orbit; they fall ‘clunk’ on the launch mat.

To help provide some clarity, we’d like to introduce you to four companies using NPS data in very interesting ways. Check them out below. Read More…

Why the Customer Success Manager is the Product Manager’s New BFF

In 1853, U.S. Commodore Matthew Perry (no, not the Friends actor) sailed to the shores of Japan to strongly suggest (with several gun-laden vessels) that the ruling shogunate open Japan’s ports to outside trade. For 200 years, Japan had embraced a policy of near total isolation from the West, but with the Industrial Revolution fresh out of the oven, even isolationist Japan couldn’t ignore the benefits of trade. What does this history lesson have to do with Product Managers and Customer Success?

Read More…

Case Study: How Entelo uses In-app Customer Feedback to Prevent Churn

  • 2x response rate versus email provides a more complete picture of the Entelo customer base
  • Real-time feedback helps Entelo jump on customer issues quickly, rather than letting problems go unaddressed for months at a time

Read More…

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