What is Product NPS and Why Should Product Managers Care?
If you’ve been in the SaaS space for a bit, you must have heard about Product NPS, but what exactly is it? And how can product managers use it to develop great products?
These are the questions we’re exploring in the article. We’re also looking at alternative metrics and tools you can use to collect NPS data effectively.
Without much ado, let’s dive in!
- Product Net Promoter Score (NPS) is a metric of customer satisfaction. We can also say the NPS score is a number reflecting customer loyalty.
- Fred Reichheld developed NPS in 2003 to quickly measure customer sentiment.
- To obtain the result, you need to ask your users how likely they are to recommend the product. Based on their answers, you group them into Promoters, Passives, and Detractors.
- To collect reliable NPS data, you always need to collect it in the same way, for example, in-app only.
- Make sure to target the relevant user segments and trigger the surveys contextually to get more actionable results. Also, repeat the surveys regularly to observe trends.
- Contact your promoters to understand why the product is successful. They may also be happy to test new features and recommend the product to others.
- Detractors can tell you how to improve the product while tracking their behavior in-app can reveal friction points. Also, it will show how differently they use the product from promoters.
- Knowing how promoters engage with the product helps you teach detractors how to use the product effectively. This will improve product adoption and overall satisfaction.
- Apart from product quality, NPS is influenced by other factors, like marketing.
- Transactional NPS (tNPS) is more focused than regular NPS because it measures user sentiment after completing a specific action.
- Other customer satisfaction metrics include the product-market fit score, the customer effort score (CES), the customer satisfaction score (CSAT), the customer health score, and the actual number of referrals. Use them all to get a more complete picture.
- The market is full of dedicated NPS tools like SatisMeter, but these focus on collecting data only.
- With Userpilot, you can also analyze the data, use it to segment users and target them with bespoke in-app guidance to drive product adoption and improve customer retention.
- Want to see how it works in practice? Book the demo!
What is product NPS?
NPS stands for Net Promoter Score and it’s a popular metric used to track customer sentiment.
By sentiment, we mean how ready they are to promote the product to their mates. This is an indication of their overall satisfaction with the product.
To get the NPS score, you use a survey that how likely your customers are to recommend the product to others.
The metric is so appealing because of the simplicity of the survey and the fact that you only ask one question to obtain the data.
A brief history of the Net Promoter Score (NPS)
The NPS was developed by Fred Reichheld in 2003.
How do you calculate the Net Promoter Score (NPS)?
While the NPS survey is super straightforward, calculating net promoter scores is a bit more complex.
First, you need to group the answers.
Users who responded with 9 or 10 count as ‘Promoters’. 7 or 8 makes a user a ‘Passive’, while 0 through 6 – is a ‘Detractor‘.
Next, you add up the numbers to get the total number of users in each category.
To obtain the NPS score, simply subtract the percentage of detractors from the percentage of promoters.
If you don’t fancy doing all the calculations manually, why don’t you use our free NPS calculator?
Collecting product NPS data accurately
To reap the benefits of the NPS, there are some good practices to follow for product managers.
Collect data from the right user
It may sound obvious but you need to make sure you ask the opinions of the rights users.
To start with, decide if you are going to collect it at the user level or account level. The first option is likely to produce higher scores because users engage with the product regularly.
It doesn’t matter that it’s a better group to target, it just means you need to be consistent and stick to one to ensure the results are valid and reliable.
Generally, it is a good idea to target specific user groups with your NPS surveys. Different user segments have different needs and your product may be meeting them to a different degree.
Fortunately, tools like Userpilot allow you to easily select the target cohorts for your NPS surveys.
Trigger your NPS surveys contextually
In-app NPS surveys normally produce higher response rates and scores than email ones. Again, that’s because the answers come from engaged users who are closer to the product.
The moment the survey is triggered matters too. If the user is having a good experience using the product when the survey pops up, they will naturally provide a higher score.
Track NPS score regularly
For the NPS scores to be meaningful, you need to track them regularly. This is a must to pick up trends in customer satisfaction.
A one-off NPS survey is like a single frame taken from a film. It’s not enough to understand the bigger picture.
How smart product managers use the product NPS score to build better products
Collecting the data and calculating the NPS score is just the beginning of your customer feedback journey.
Let’s look into what you have to do next and how to use the calculated net promoter score to build products that delight users.
Look at a high NPS score as an opportunity
Getting a low score can naturally be a shock that will force you to act. However, high scores are a good opportunity to explore how you can make your product even better.
To start with, reach out to your promoters to see what exactly makes them rank your product so highly and what else you could do to improve it.
If they like your product, they should be happy to take part in follow-up interviews. You can also invite them to be beta testers of new features or complete a friction log.
If your users are likely to recommend your product, ask them to do just that. To increase their motivation to promote your product, build marketing and referral schemes that reward them for their effort.
Build NPS score segments and look at qualitative feedback and engagement
By dividing your users into segments based on their NPS scores, you improve your chances of satisfying their needs.
Once you have your users in segments, try to get qualitative feedback for more ideas.
Just like promoters, detractors can give you valuable insights into how you can improve the product.
Apart from asking them directly for more in-depth feedback, track their interactions with the product features and look for areas that cause particular friction and don’t let them achieve their objectives.
Userpilot allows you to track not only individual actions but also sequences of action needed to reach an activation point, which you can later group into Custom Events and track as one.
Improve product adoption and increase customer satisfaction
This step involves using data to improve the user experience to drive adoption and increase satisfaction.
If you can see that your promoters are getting lots of value from certain features but the detractors don’t use them at all, develop your in-app adoption strategy accordingly.
Look at more customer loyalty data, not just the NPS score
What is great about NPS is also its biggest downside. It is a very general metric.
There are a lot of various factors that could affect customer satisfaction, and the NPS doesn’t take them into account.
Your product may be great but other parts of the customer experience could be letting it down. This could be too many marketing communications or long waiting times for customer support.
That’s why you need to use other customer loyalty data to find the areas that bring the score up or down.
Use tNPS scores instead of regular NPS
Transactional NPS (tNPS) is more intentional than regular NPS.
Instead of collecting the data every 2-4 weeks, you do it immediately after an interaction with your business. This allows you to measure how specific interactions affect user sentiment.
Such an approach helps you pinpoint friction points better. Thanks to that you can optimize the user journey and improve user satisfaction.
What other metrics are relevant for tracking customer sentiment?
While the NPS is a recognized way of measuring how happy the customers are, it doesn’t give you a full picture.
That’s why every product manager should use a range of metrics and analytics tools to track customer satisfaction.
Product-market fit score
Product-market fit surveys are another popular tool.
To get the score, you ask your user how disappointed they would be if they couldn’t use the product or feature again. The more customers choose ‘very disappointed, the higher the satisfaction is.
Is it a more accurate way of measuring user satisfaction than NPS? That’s an open question.
Some argue that the NPS score has strong psychological foundations which may make it more accurate. Liking a product is one thing but recommending it is another. Our reputation is at stake, so we will think twice before we do it.
However, it’s not an ‘either or’ situation and product managers should use a combination of metrics to triangulate results.
Customer effort score
Customer Effort Score (CES) is a more granular metric.
Just like tNPS, you can collect it after specific interactions. For example, you can trigger it after a user engages with a feature to understand where they’re struggling.
New referral customers
The fact that users say they would be happy to recommend a product to their pals doesn’t mean that they actually do that.
To get a more accurate idea, track how many of your users make a referral and how many referrals each customer makes.
In fact, they are believed to be the most effective marketing approaches. That’s why keeping track of your customer referrals will also allow you to predict growth rates.
Customer satisfaction score (CSAT)
Customer satisfaction score (CSAT) survey is another tool you can use to measure customer sentiment.
In the survey, you ask customers how satisfied they are with their experience. These are triggered contextually, for example, immediately when the user completes a task.
The survey is very quick to complete. However, the question is how much thought the users give when they answer the question, especially when they don’t elaborate on their choice in the follow-up question.
Customer health score
Customer health score is an indication of whether the customer is likely to grow, stay consistent, or churn.
This is probably the most nuanced metric here and as a result, the most complicated one to calculate. That’s because you need to choose the right criteria. These depend on the user segments and your objectives.
Best tools for collecting Net Promoter Score (NPS) survey in-app
What alternatives do product managers have when it comes to tools for collecting and analyzing NPS data? Let’s look at a couple of examples.
Userpilot is a product adoption and user onboarding platform. As a result, it allows you to collect the NPS data and design interventions to improve it.
The product NPS surveys are easy to design without any coding skills. Thanks to the advanced user segmentation functionality, you can target specific user groups and trigger the surveys in the most relevant places.
You can also follow up on the NPS survey with additional questions to get qualitative feedback.
After that, you can tag the responses to group them into different categories. Cross-referencing the answers with other data subsets allows you to see patterns that may have an impact on the NPS score.
Finally, you can design in-app experiences and trigger them based on NPS scores or responses to address the issues your customers are facing.
For example, you could use interactive walkthroughs to guide your users down the best paths to experience value, whereas tooltips could show them the features that they need to complete their jobs more efficiently.
SatisMeter is a dedicated tool for collecting user sentiment data.
Its UI is very user-friendly, and you can use it on mobile and web apps as well as email.
One of the downsides is that it allows only a minimal level of customization and you can’t target users with other in-app experiences afterwards. For example, you can’t customize the questions their surveys are built around. Still, most of the time, the questions are all you need.
Product NPS surveys could help product managers measure their customer happiness and satisfaction.
When followed up by open-question surveys and interviews, it can give you new ideas on how to improve your product. It’s also very useful for identifying the user groups that need extra support to experience product value.
Would you like to find out how to use Userpilot to collect and analyze the NPS data and use it to optimize customer touchpoints? Book the demo!