NPS Analysis: How To Collect Data and Conduct an Analysis [Best Tools Included]
How can NPS analysis help you improve customer experience and ultimately achieve customer success?
The Net Promoter Score (NPS) is a measure of user sentiment and loyalty. It tells you how likely users are to recommend your product to others. By analyzing NPS data, you will be able to determine how engaging and profitable your product is.
Without further ado, let’s talk about how to use NPS feedback effectively.
- The Net Promoter Score analysis is the process of looking at customers’ NPS scores, dividing them into segments, and finding ways to improve customer loyalty.
- Based on the responses, the users are divided into 3 groups: promoters (score = 9-10), passives (score = 7-8), and detractors (score = 6 or lower).
- According to the NICE Satmetrix 2021 benchmark, the average NPS for the SaaS industry is 41.
- Send NPS surveys at different stages of the user journey by setting triggers based on user behavior or in-app actions.
- Add a follow-up question to understand the root cause of the score.
- Analyze and tag open-ended answers.
- Segment NPS responses into groups and identify trends.
- Compare your NPS score with industry benchmarks.
- Send customer feedback on survey responses and close the loop.
- Don’t survey your entire customer base all at once.
- Don’t compare data from different geographies.
- Userpilot, Qualaroo, and Survicate are the top 3 NPS feedback tools.
What is an NPS analysis?
The Net Promoter Score analysis is the process of looking at customers’ NPS scores, dividing them into promoters, passives, and detractors, and finding ways to improve customer loyalty.
Why is conducting an NPS analysis important?
NPS is used by 55% of SaaS businesses to measure customer satisfaction and loyalty. But do they analyze NPS data together?
NPS analysis provides valuable insights that can be incorporated into your customer satisfaction and success strategies.
First of all, it gives you an overview of how your business is performing. Low average NPS scores suggest that most customers are at risk of churning, which puts your future revenue streams in jeopardy.
Moreover, you can identify friction points that help you make informed improvements in product design and onboarding experiences. This boosts engagement and reduces churn.
Additionally, it helps you learn about your customers on a deeper level. You are able to find out how they actually feel about your product. By doing so, you can come up with better tactics for increasing value and ensuring their loyalty.
How does the Net Promoter Score (NPS) work?
NPS surveys simply ask users to score how likely they are to recommend your product to friends on a scale of 1-10.
Based on the responses, the users are divided into 3 groups:
On the NPS survey, promoters are customers who give you a score of 9 or 10. They are users who are satisfied with your product because it gives them continuous value. It’s your loyal customers who have the highest probability of staying with you over the long run.
In fact, they might even become your power users, who not only engage with your product the most but also become brand advocates. As a result, they can increase revenue by attracting more users.
Passives are customers who give you a score of 7 or 8. Although they are generally satisfied with your product, they don’t find it particularly engaging. That’s why they are indifferent to your product and would switch to being either detractors or promoters, depending on future experiences. This gives you the opportunity to help them get the full value of your product and convert them to promoters.
Detractors are customers who give you a score of 6 or below. They are not seeing the value in your product or are facing issues that are going unresolved. This makes them disengaged and dissatisfied. Such customers are more likely to churn and leave behind negative reviews. However, you can prevent churn by addressing their problems and may even turn them into promoters down the road.
How to measure Net Promoter Score?
The NPS metric is equal to the difference between the percentage of promoters and detractors.
Suppose the NPS survey results are as follows:
- Promoters: 55%
- Passives: 30%
- Detractors: 15%
This would make your NPS score 55%-15% = 40.
NPS benchmarks in SaaS
The NPS scores can range between -100 and 100. They become negative only if you have a greater percentage of detractors than promoters.
The right NPS scores vary among the industries. Below is a list of average NPS benchmarks for different industries. In general, an NPS between 0 and 30 is considered a good one.
However, the benchmark for the SaaS industry is higher. According to the NICE Satmetrix 2021 benchmark, the average NPS for the SaaS industry is 41.
While it’s good to exceed the NPS of your competitors, it’s more crucial to consistently improve upon your past performances. Remember that you are your most vital competitor.
The SaaS industry average was 30 only three years ago. This shows how customer expectations never stop increasing and emphasize the importance of continuous improvement.
How to collect NPS survey data and conduct an analysis?
It’s not enough to just prepare a survey and send it out to customers. To determine the level of customer satisfaction effectively, you need to employ some tactics.
Use NPS surveys at different stages of the customer journey
The customer journey is critical in determining when to send out NPS surveys to users. And the best way to send them out is to set up triggers using specific user behavior, their actions, or in-app experiences.
Use important product milestones to decide when to trigger NPS surveys. Here are some examples.
- After reaching a ‘success’ milestone: You can define ‘success’ in multiple ways depending on the particular use case of your product. For a social media scheduling tool, it could be sending out the first post. In the case of CRM, it could be launching the first email campaign.
- When your users completely adopt your product: This happens when your users activate all the product features. They move on from the free trial and basic plan to the highest-tier subscription and become regular users.
- Unique dates: You can trigger NPS surveys using the amount of time a customer spends on your product. For instance, you can schedule it to be sent out 2 days before a trial run is over or 10 days after a user signs up for a subscription plan.
Add a follow-up question to understand the root cause of the score
It is impossible to know what precisely disappointed your detractors by just looking at a number. You’ll need to add a follow-up question to get some qualitative feedback.
By doing this, you will know what your customers are looking for and what they are not getting from your product. You can also identify friction points or learn what existing features customers are not using.
Also, the insights of promoters are not in vain. Identify what they find most engaging about your product, and capitalize on that to retain them and convert passives into promoters.
Analyze and tag open-ended answers
Follow-up questions lead to open-ended answers, which you need to tag for carrying out analysis.
A tag is a label you can create and optionally assign to individual responses. This allows you to filter the responses, share, and perform trend analysis.
Userpilot lets you group the NPS survey responses into separate themes so that you can learn what makes your customers loyal and what does not.
Segment NPS responses into groups and identify trends
You can further analyze the open-ended answers by quantifying them. Segmenting the responses lets you quantify the results and give context to the NPS numbers.
For instance, you may find that 90% of the promoters love your product’s usability, or that 80% of the detractors have issues with your customer support.
Userpilot not only allows you to create and launch NPS surveys but also segment customers according to their responses. This gives you actionable feedback.
These results make it possible to make data-driven decisions. You can modify your sales and marketing strategies to address all complaints and optimize user experiences.
For example, you can boost your customer referral program by motivating promoters to spread word-of-mouth and give positive reviews.
Compare your NPS score with industry benchmarks
Now you can compare your NPS score against your industry’s standard figure. This helps you to:
- Know how your business is performing relative to its competitors.
- Find gaps in experience that you can mitigate.
- Get an idea of how much effort you need to give to beat your competitors.
Send customer feedback on survey responses and close the loop
You should not leave any customer feedback open. It’s essential to follow up on both positive and negative customer responses.
Closing the loop means implementing an action plan in response to the NPS feedback and letting your customers know.
Get your entire team on board with the NPS program to include them in the feedback process. And always have a plan on how to deal with responses before they arrive. Let’s look at some examples:
- Scores 0 to 6: The senior manager would call the users within 4 hours to apologize and promise to resolve their problem as quickly as possible.
- Scores 7 and 8: Share the customers’ responses with the team members, and discussion sessions are held on how to boost customer satisfaction.
- Scores 9 and 10: Thank the customers and offer incentives to the team members responsible for the score. Note down the actions that led to a boost in engagement and replicate them.
NPS analysis best practices
Now let’s see two ways you can improve the quality of the NPS survey findings.
Don’t survey your entire customer base all at once
Involving the whole customer base in a single survey will create a bottleneck of data that would be difficult to process and act on.
You can either survey all your users but spread the surveys out over a few weeks or months. Or, you can survey each user at a predetermined time from their starting date.
It’s better to concentrate on the customers who have recently interacted with a touchpoint. For instance, they may have logged into your website in the past week or reached a milestone in the past month. There’s a greater chance of getting feedback from such users while their experiences are still fresh in their memories.
Don’t compare data from different geographies
It’s useless to compare scores from different geographical locations.
Several research studies have shown that culture has an impact on NPS results so the scores are bound to vary.
An American organization got to know that the Dutch subsidiary it acquired had a lower NPS score than the parent company. This was not because of any differences in the service quality.
Instead, it found that the NPS score was lower simply because Europeans were more conservative and Americans more extreme with their responses.
We would advise you to take note of the culture in different regions so that you can figure out what matters to different communities of people.
Best tools for NPS analysis
An NPS analysis cannot be completed without the right tool to accomplish your goal. Here are the three best NPS tools available.
Userpilot lets you create NPS surveys without any need for coding. It’s a three-step process whereby you:
- Open the survey page.
- Create a simple survey.
- Customize the survey to suit your visual style and brand guidelines, such as adding your own font and logo.
Moreover, you can add a qualitative follow-up question to the survey and customize the frequency at which the survey appears to customers who click on “Ask me later”.
The “Targeting” menu tab allows you to choose the specific recipients of the survey based on domain, page, and audience.
Use the NPS analytics feature to easily segment users into promoters, passives, and detractors. You can further group the feedback into separate themes to understand what inspires customer satisfaction.
Qualaroo is a SaaS business platform that lets companies get valuable insights from their prospects and customers in real-time while they are using the app or website.
It uses AI to analyze customer feedback by using keyword analysis, thus turning qualitative feedback into actionable insights. The tool is mainly used by large organizations due to its price and complexity.
Survicate is a powerful survey, NPS, and feedback management tool that helps companies gain more user feedback and deliver improved customer experiences.
But it offers limited service when it comes to targeting a specific audience.
The NPS score is a mere number unless you break it down and assess the parts. You can use NPS analysis to identify gaps in your product and customer service and take steps to fill them. You can also identify the most valuable attributes of your product and ensure they are maintained.
Want to get started with NPS analysis? Get a Userpilot demo and see how you can improve user sentiment about your product.