Growing and scaling a business is hard. While some businesses hit the nail on the head right away, many businesses take time and change to fit into the market and grow.
In Peter Thiel's new bestselling book Zero to One, he says that most businesses are lucky to get even just one distribution channel right. If you feel like you have tried everything to find the right distribution channel to grow your business and have had no success yet, then it might be time to try the Net Promoter Score (or NPS). I chatted with Lucas Carlson, an investor and advisor to Promoter.io, an NPS platform that makes it easy to track and follow up on customer feedback.
I know what you might be thinking: "Isn't NPS that email survey from Apple or AT&T that asks from 0 to 10, how likely I am to recommend the company to a friend or college? How's a single question supposed to grow my business?"
NPS insiders know that Net Promoter is about more than just a score. It is a system that when properly implemented will not only spur your customers to action, but can fundamentally change the growth trajectory of your business. In fact, companies with the highest Net Promoter Score in their respective industry have been shown to outgrow their competition by over 2x and create defensible differentiation.
The biggest untapped secret to using NPS to grow your company is in how you follow up to and engage the customers that respond to your survey. There are many ways to go wrong doing this, so we will explore a few insider ways to turn a simple survey into active and measurable growth in your business.
The Net Promoter Score, a one-question survey sent out via bulk email (or through an end-to-end NPS SaaS service like Promoter.io) to all your customers, groups the responses into three categories: Promoters (9-10), Passives (7-8), Detractors (0-6). Let's explore each of these three segments and see how you can turn any of these into vehicles for growth.
1) Use Promoters to Kick-Start Viral Growth
Let's start with the easiest group: promoters. NPS can be used to turn passive promoters into active ones if used correctly. What's a passive promoter? Someone who is willing to promote you but just hasn't done it yet.
Many businesses don't have the built-in viral components like Facebook or Twitter. In response, they try to force viral features into their products. Usually this just doesn't work. Using NPS is better way to turn your most actively engaged users into promoters by naturally calling them to action.
How? Simple. After someone gives you a score of 9 or a 10, you quickly respond with an email thanking them for their high score and feedback. In the same email, offer that person some pre-written content to put into Twitter of Facebook or directly ask for a referral. Make it as easy as copy and paste for these people to take action promoting your business. They did, after all, tell you they were excited to promote you, so you are doing them a favor by making it easier to do so.
2) Turn Passives Into Promoters to Reduce Churn and Make More Money
What about "passive" customers, those who respond with a 7 or an 8? These people are really close to being promoters who are your most profitable customer segment (spend more, stay longer, willing to recommend and refer). But they are also close to being detractors. Passives are often highly susceptible to competition so it is critical you use this opportunity to engage.
Since passive customers are on the fence, the technique here is to go above and beyond the call of duty and show exceptional service. If you have free swag (stickers, t-shirt, etc.), passives are the ones who you want to give it to. If you can comp a free upgrade or give them a free up-sell, that will often be the kind of thing that will turn a passive into a promoter. Alexis Ohanian, founder of Reddit and Hipmunk, for example sent out luggage tags and handwritten notes to people and created a lot of fans and goodwill this way.
Just like promoters, write an email response thanking them for their time responding to the survey. But instead of outright asking them to promote your service, offer to give them something for their time. This will separate you from your others and create a reputation for going above and beyond your competitors. Next time they take the survey, if they respond with a 9 or a 10, respond by asking them how they enjoyed their freebie and see if they would be willing to send out a tweet with a picture of them holding it.
3) Use Detractors to Scientifically Build Viral Features
Finally let's explore the scariest group of responders: the detractors. What if the customer responds with a 3 or a 5 or even the most dreaded 0? After all, it's easy to make passive promoters active because they are already enthusiastic about your product or service. But what can you do to grow your business if people aren't over-the-moon about your service yet?
The Heisenberg Uncertainty Principle teaches us that the simple act of measuring can change what you measure. This absolutely applies to measuring a customer's willingness to recommend your service to others.
You can do this by creating a constructive criticism feedback loop from your "detractors" (those who give you low scores). When someone tells you they would not recommend your product or service, it is the perfect opportunity to find out why. How you craft this kind of followup is very important.
First you must thank them for their time responding to the survey. Even though you may not be happy with their score, you must remain grateful for their honesty. Then ask them for the single biggest thing you could do to change their score to a 9 or 10 next time. The way that question is phrased leads customers to tell you exactly what features or aspects of your service will be most viral, because if they would tell others about you, then those others will also likely tell even more people.
Make Surveys The Beginning Of a Conversation
NPS is a great way to grow your business because it allows you to create an authentic long-term relationship with your customers. At the same time, you are gathering highly actionable feedback that can make your product more viral. And finally, whether or not they are a promoter today, you are creating a mindset that they could be a promoter in the future.
Many typical surveys are long-winded and convoluted. They focus more on fitting people into boxes that generate bar graphs than taking the opportunity to deepen a direct relationship with your customers. When you grow your relationship with your customers, you reduce churn, increase spend, and are more likely to have your customers talk about you to create a viral hit.
Who knew one little question could be so powerful?
Now it's your turn. Have you used Net Promoter Score before? Which of these concepts will help you scale your business? Tell me in the comments section below.