Net promoter scores are hotly debated in the SaaS World.

On the one hand, a saas company may determine that NPS is not strongly correlated with retention rates, and therefore shouldn’t be a key metric for SaaS businesses to track.

On the other hand, you have SaaS professionals that swear by the NPS metric and say that it helps your SaaS business grow through viral word of mouth second order revenue.

In today’s post, we’re not here to debate whether or not you should be tracking NPS. Short story?

You should.

In this post, instead, we’ll demystify net promoter scores and provide you with the Do’s and Don’ts of NPS. How to leverage this data in your customer success team and how to ensure it’s a valuable listening post incorporated into your broader CS analytics strategy.

Let’s dive in.

✅ Do: Track NPS

Tracking NPS allows you to gather valuable qualitative data about how customers feel about using your product. This qualitative data can embellish the usage (quantitative) data you’re already tracking from customers — metrics like MAUs, DAUs, etc. This qualitative + quantitative approach brings together the whole picture of your customer’s experience with your brand and shouldn't be overlooked as a valuable listening post of how your customers feel about using your software.

❌ Don’t: Use NPS for variable compensation

I've seen a few CS teams that goal monetary compensation on NPS. Goaling on NPS typically doesn't go over well. Goals for variable compensation should be metrics that the CSM can directly impact. In the case of NPS, the metric is purely qualitative and is dependent on the respondent's mood. Let's say you have a responder who had a rubbish morning, spilled coffee on his shirt, was late to his big meeting, and then was asked to fill out an NPS survey. Because he's in a poor mood, he marks down 1 / 10. However, the actual value the service is providing him, and his company is quite strong. Now as a CSM, I’m getting paid based on this particular user who I have very little ability to impact their actual score. This story highlights how NPS is out of the CSM's control and shouldn't be tied to variable compensation.

✅ Do: Follow-up with all NPS comments

When a user takes time out of their day to provide you and your company with feedback, it's magic. You should treat it as such! For every comment response you get, aim to follow-up with 100% of the comments. Consider having different responses based on the responder's score:

One response for promoters (asking them to fill out a public review of your service on G2 Crowds)
One for passives (asking what would make their experience even better than it is today)
One for detractors (thanking them for their feedback which helps you learn and grow).

When a customer provides your company / service with feedback, be sure to have a human touch to thank the users who felt compelled enough to share feedback with your company. This is absolutely a moment of truth along their customer journey.

❌ Don’t: Silo NPS data

When you receive this incredible feedback from users, this qualitative goldmine should be shared across the company. Do you have a slack channel stood up that highlights each of the comments from your users? How about sharing this user feedback with the PMs in your organization? How are you surfacing these qualitative dashboards to the rest of the business and your CSMs? One of the biggest mistakes I see CS teams make with NPS is silo-ing that information. Aim to make these critical qualitative data points part of your data democratization efforts.

✅ Do: make NPS part of your broader “sentiment analysis”

NPS is an excellent way for users to describe how they feel about using your product or service; coupled with other qualitative data points, you can start to build comprehensive sentiment Health. Components of sentiment include (but not be limited to):

Support Interaction CSAT: What’s the score your users give their support experience.
Onboarding / Implementation NPS: How did your customers feel about the onboarding experience they received?
CSM CSAT/NPS: What’s the NPS on the CSM that’s assigned to that customer account?

Each of these data points tells you how a customer feels about interacting with your brand. Collectively they paint a compelling picture of how a customer perceived onboarding (onboarding NPS), their support interaction (Support CSAT), their assigned CSM (CSM CSAT/NPS), and the product itself (product NPS). Collectively looking at all data points can provide you with the qualitative information you need to understand a customer's feelings about their interactions with your company.

❌ Don’t: Focus on the number. Focus on the trend

Your actual NPS score doesn't tell you all that much. NPS of 28. What does that tell you? NPS alone can be a vanity metric. What's more powerful is measuring the trend of your NPS over time across your entire customer base, as well as specific customers. Is your overarching customer experience improving, declining, or holding steady over time? Zooming in one-level deeper, what is the trend of NPS of a specific strategic account? Are the changes you're implementing for these customers landing with end-users and improving NPS? These are the more powerful ways to leverage your NPS data.

✅ Do: The analysis to see if NPS is correlated with higher retention or expansion

This important step requires you have enough renewal and churn data (1+ years assuming 12-month contracts) to understand whether customers that are promoters, passives, or detractors renew and expand at higher rates. You may be surprised what you find as there's debate in the CS community about just how much NPS can impact retention or expansion rates. This analysis is critical to understanding how important moving the needle on NPS is for your business financially.

❌ Don’t: Start an NPS program without the proper buy-in or support

When you start collecting this valuable qualitative data, it's essential to explain the value of this insight directly to your company. Is your CEO preaching the importance of NPS & listening to your users? If not, he/she needs to be. As a natural next step, do you have the appropriate sponsorship to review this data with Sales? Product? Marketing? You can prevent NPS from getting lost in the dozens of SaaS metrics by establishing partnership with the leaders in your respective organization.

✅ Do: Share qualitative insights with customers

Sharing insights directly back to customers is one step that is often overlooked but immensely powerful. Gathering NPS data from users at a customer's company and summarizing the trends and insight into a slide serves as a core value-driver to highlight successes and challenges the customer's users are experiencing. By being transparent with your qualitative data, you demonstrate how you're vested in the customer's success and highlight critical ways to improve the customer experience.

Tip: Create a standardized template slide that your CSMs can leverage in QBRs with customers that highlight the trend of NPS, the customer's NPS relative to your customer base, and the comments you've received from individual users.

✅ Bonus: Pay attention to non-responders

Too frequently when analyzing NPS data, we can get caught up in what the responses are telling us. However, in our research, it’s the non-responders of that can’t go unnoticed. Those are the customers that don’t even bother to fill in a survey form at all. Be weary of those customers, and consider an action plan to work with non-responders to see if they’re truly receiving the value they’d expect from your service. The longer your customer doesn’t engage with your brand in any way, the bigger the chance that customer is not using the software to its potential, meaning future ARR risk.

That’s it — these are some of the tips ‘n tricks when it comes to NPS. NPS can be a valuable listening post into how your users feel at certain times throughout their journey. Use this powerful qualitative data to improve your product, support, and CS experience.

We hope this helps you on your NPS journey with your own CS program. If you have thoughts or ideas as to what we could be added to this article, we’d love to hear from you.

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