As a customer success manager for a subscription-based SaaS company, I am all about customer feedback. When I started my role at GoSquared, the first thing I needed to have was a full understanding of the customer base, and how happy they were with our service.
I set about asking a few key questions: Who are our customers? How satisfied are they with our service? What do they like/dislike about our service? Who is currently a churn risk?
Having this understanding of your customers is vital in any retention or expansion strategy, and for tackling churn.
In this post, I’m going to share with you how I have found Net Promoter Score to be an essential tool, and how to use this feedback as a core component of an effective customer success strategy.
An NPS survey works best as a simple question – How likely are you to recommend GoSquared? Followed by an opportunity to write a comment.
When the results come in, your customer will be categorised as either a detractor, passive or promoter:
Detractor: 0-6 out of 10
Passive: 7-8 out of 10
Promoter: 9-10 out of 10
Then, your NPS is calculated using the percentages of detractors and promoters to give you a score between -100 and +100.
Formula: (Number of Promoters — Number of Detractors) / (Number of Respondents) x 100.
As you can imagine, you want to be somewhere above 0. According to a study carried out by surveymonkey, the average score for a technology company is +35. However, to be really performing in this space, you want to be hitting +72 or higher.
Why is the score important?
The scores can give you both a micro and macro indication of how your customers might behave. On a micro level; an individual score might tell you whether they are at risk of churning, or could be a potential customer to include in a case study. When we zoom out the numerical patterns that emerge from your scores (and the comments that come with this) can show the general health of your customer base and help you build your customer success strategy.
Detractors are more likely to churn and any revenue associated with these customers is MRR at risk. Not just this, but Detractors are much more likely to share their negative feelings with others.
Happy customers will share their views with around 9 customers, but unhappy customers – they’re telling an average of 22 others. You can see just how quickly this becomes bad news for your brand.
Your Passive Customers, while not in immediate danger of churning, still represent long-term revenue at risk.
On the other end, Promoters are your ambassadors. They love your service, and they represent an opportunity, not just for revenue expansion, but to promote your business for you.
Make sure your score is representative of your customer base
Your data is really only as good as your collection method. You need to be sure that you are sampling a wide and varied group of customers who represent the entire range of your network. Failing to do this will skew your information and could potentially set you off down the wrong path.
How can you improve your response rate?
- Make your subject line specific and straightforward: this isn’t the time for subtle subject lines. Be clear and keep it simple, so your customers know exactly what they are opening.
- Ask just one question: overwhelming your customers with too many boxes to check and forms to fill out will significantly lower your response rate. Keep it simple and only ask one question.
- Increase the frequency: one question sent out more regularly can bring you a bigger and broader range of responses.
- Use a range of channels: If email isn’t the main channel you use to communicate with your customers, don’t solely use it to collect feedback.
Follow up with your customers.
Once you’ve got responses from your customers, you need to respond. This is a two-way conversation, and your customers are doing you a favour by telling you what they think – even if it’s not what you want to hear.
So how should you respond?
Say thanks: Customers have taken the time to write you some feedback, they will appreciate the courtesy, and it will encourage them to reply to surveys again in the future.
Ask for more details: I find that if I follow up personally asking for more information, making sure I include a reason for why their feedback is valuable, this increases comment rates significantly as well as offering that personal touch.
Encourage Promoters to leave you a review: Promoters have given you a high score because they love using your service, why not use these customers to sell your business for you? Encourage them to leave you a review for your potential new customers to see.
Ask Detractors if you can help: Detractors are far more likely to churn. Use this opportunity to start up a conversation and ask how you can help them.
Ask Passives how your score could be improved: While 8/10 is ok, it’s not a 10. How can your service be improved to move that 8 to a 10? Your Passives are key for offering this feedback. Getting closer to your Passives also provides a great opportunity to inform them of parts of the service they may not be aware of or features they may not be utilising.
Save time by automating the whole process
You might be thinking this is all going to take up far too much time but luckily, there are tools out there you can use to automatically schedule and send out your surveys.
We use a service called Promoter.io, which uses an integration with Zapier to send all of our responses into GoSquared’s Customer Data Hub.
Once in the Customer Data Hub, we segment all our Detractors, Passives and Promoters into Smart Groups.
Using our email automation service, we can then quickly send an automated email that goes out immediately to follow up and ask for more details. This is fully customisable using the variables feature so that you can address the right person at the right time.
Analysing your feedback to help build your customer success strategy
Analysing your feedback is just as important as collecting it. Without this stage, the information you received from customers is fragmented and never as useful.
Think about these things:
- Who are your detractors, passives and promoters? Can you spot any themes in the data? Are they CEOs or developers? Do they specialise in Customer Success or Sales?
- What products or tools are they using? Are some product users more responsive than others? Are there any stronger correlations in responses when you organise them by product or tool?
- What plan are they using? Your free-tier customers will have different priorities and annoyances than your top plan customers. Make sure you have context for any comments on pricing or value.
Tagging your feedback helps to understand common themes and trends
We use a table in Notion to categorise and theme the feedback we receive. Notion is a great tool to do this in because of the tags feature. Adding tags in different colours makes it so easy to see, at a glance, what your most common themes and trends are. When you are comparing feedback, you want to find as much consistency as you can to enable you to identify patterns correctly. For example, comparing the responses from someone on their first day of your highest-tier plan with someone on the 5th year of your lowest tier plan isn’t going to give you the most reliable data.
Here are some suggestions for tags, remember to tailor these for your business and your goals:
- Business type: are they a SaaS business? Ecommerce? Retail?
- Respondent: Who is replying to your survey? The CEO? An engineer? Someone in the marketing team?
- Plan type: It’s worth noting down which plan your respondent is on as this will change their experience and help to narrow down which features or aspects they might be talking about in their feedback.
- Compliments: Are there any obviously connected compliments you could tag for ease of reading? Things like: easy to use, nice design, great customer service.
- Issues: Are there any correlations in the things your respondents don’t like? Things like: couldn’t understand the value, pricing too high, confusing to use.
Prioritise your strategy by identifying common themes
With your tags in place, it should be easy to identify common themes and make inferences as to how you should build out your strategy. Your own business goals will guide you on how much importance to place on each emerging theme.
You might pick sales or churn related themes if you are focusing on business growth. Or choose value-based themes if you are focusing on long-term customer relationships, and branding or communication-based themes if you are focused on marketing and brand awareness.
Connecting these goals to your themed responses will enable you to start building out a strategy to address aspects of the feedback.
A couple of examples could be:
- Your detractors are unhappy with their customer service experience: You may need to train your customer service team or Install a live chat service to address customer queries to improve your response times significantly.
- Customers had difficulty with their onboarding: Work with your product team to simplify the onboarding process in the product, or create an email onboarding sequence to assist all of your new customers better and set them up for success.
- Your Promoters have something in common: Work with your Sales team to target leads based on this criteria to bring in the right customers.
Sharing NPS feedback with the rest of your team
Customer success is a combined effort and requires buy-in and input from many different teams, such as marketing, product, engineering and Sales. It’s essential for everyone to understand common feedback from your customers and to be on board with your strategies. That’s why you should be sharing your NPS feedback, and how customers see your platform, regularly.
- Automatically send incoming survey responses to a dedicated Slack channel.
- Report on NPS feedback trends in team meetings, highlighting problematic areas and associated revenue at risk.
- Share insights with your Sales and Marketing team about your Promoters to target the right leads, or build a case study on your most successful customers.
After you have implemented a new strategy, for example, you have made changes to your customer service process, share the results with the rest of the team. Has it been successful? If not, what do you need to improve it still?