How We Cut Through the Clutter to Focus on the Essence of NPS

How We Cut Through the Clutter to Focus on the Essence of NPS

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While there is no shortage of information online about the various elements of Net Promoter Score1(NPS), I’ve found that even experienced NPS practitioners can easily be lead astray from the fundamentals and forget what truly matters. Why? Because in the deluge of NPS material online that ranges from how to increase survey participation, to ways to benchmark your company’s score, to ways to activate promoters, we can miss the fundamentals of NPS, which is its essence — The Why.

I believe that most NPS initiatives miss 2 things, both of which are critical for anyone who hopes their company’s NPS program will be a conduit to accomplish the goal of truly becoming customer-obsessed. We’ll cover each of these in its own post:

  1. The Why—the fundamental reason why we run a Net Promoter System. Remembering The Why and executing the fundamentals well are the key to driving powerful experiences that customers love and value.
  2. The Specifics—tangible examples of how to execute, and what to learn from your customers’ feedback along with how to learn it. Another way to say this is that it’s cool to talk about how big your NPS is, but even cooler to share how you are learning from the valuable feedback customers provide and using those learnings to delight customers even more. We’ll cover this in the next post.

Background

First, some background. This year, SendGrid created a simple “strategy on a page” document to clearly communicate our core goals and the initiatives that support them to the entire company. One of our 4 enduring goals relates to customer satisfaction. This year our specific, measurable goal was to raise our NPS by 10%2.

We chose NPS because it’s a simple yet valuable and powerful metric.

  • NPS is simple because it is one number that everyone can intuitively understand and it’s easy to measure.
  • NPS is valuable because research shows NPS is an indicator of future growth—companies that lead their industry in NPS outgrow their competition by at least 2x3 and customers who are promoters typically have an average lifetime value that is 3-8x higher than that of detractors (they stay longer, buy more, cost less to serve, and tell their friends about your brand more often)4.
  • NPS is powerful because it can have a profound impact on the entire company and influence things like product roadmaps, service offerings, and how go-to-market teams speak to customers in the customer’s language.

So what did we do to work towards our 10% improvement goal? Why, we worked on The Why of course.

The Why

At SendGrid and other companies that focus on The Why, NPS is not just a number. It is a system, a way of doing things, and a part of our DNA. The Why behind NPS is simple: we really do care about making our customers happy. We’re a company full of humans who have a lot more fun at work when we are solving challenging problems with products and services our customers love and value.

And what do we all do with people we care about in everyday life? We listen to them. We learn from them. We say thank you. We say sorry. We ask them to help us to understand their perspective. We adapt when needed. We show empathy. This is the essence of NPS and the fundamentals of NPS, shared below, support The Why.

The Fundamentals

NPS is all about 3 things:

  1. Listening—we listen by surveying our customers.
  2. Learning—we learn by reading each and every NPS comment (called “verbatims”) and by analyzing themes in aggregated response data.
  3. Acting—we act by closing the loop with customers and taking actions based on what we learned.

The fundamentals may be simple, but they are rarely easy. This is true in many areas of life including business, sports and relationships. They must be mastered and part of your company’s NPS DNA before moving on to more advanced things. But, as we all have seen (I have never had anyone follow up with me after submitting an NPS score, ever), some companies skip the fundamentals which can lead to 1 of 2 primary mistakes:

1. The first is simply measuring the score and reporting it—without closing the loop with customers and without spending the time to learn more by analyzing the aggregate response data in detail. To be honest (one of our 4 core values at SendGrid), in the past, we didn’t always drive meaningful change with the our NPS process.

-A slight variation of this mistake is for a company to only contact their detractors (forgetting promoters and passives). These are mistakes because companies that do this forsake the opportunity to learn from the gift of feedback their customers have offered.

2. The other mistake is going overboard on analysis and reporting while forgetting that customers are humans who often simply want to hear from a brand that they genuinely care how their product or service impacts the customer. These companies may not invest in what’s required to really show customer empathy.

Staying true to these 3 fundamentals is much harder than just reporting the score or analyzing the score—it takes a lot of effort and a lot of people. But this is the key to a Net Promoter System that drives meaningful improvement. And it is really hard to do without strong C-level support of the essentials, which I’m fortunate to have at SendGrid.


In the next post, SendGrid’s Approach to NPS: Specific Things We Do While We Keep Our Sights on What Matters Mostwe talk more about how we actually bring listening, learning, and acting to life at SendGrid.


1 Also referred to as “Net Promoter System” or simply “NPS.” Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
2 As an aside, 10% may not sound like an aggressive goal but when you have a strong score and over 120,000 customers, that means delighting thousands of customers to move the needle.
3 http://www.netpromotersystem.com/about/how-is-nps-related-to-growth.aspx
4  http://www.bain.com/publications/articles/the-economics-of-loyalty.aspx


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Matt leads SendGrid's Strategy, Research, and Insights function including NPS, Competitive and Market Intelligence, Customer Insights, Analyst Relations, Custom Research efforts, and more. His focus is to help SendGrid be customer-obsessed, competitively-aware, and industry-informed.
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