The Complete Guide to NPS Software: What It Is and Why It Matters
When buying from a brand for the first time, most people do the same thing: They'll phone a friend. Or a family member. Or search Amazon. Research shows that over 90% of people rely on recommendations from their closest connections, and 70% will consider online reviews about a product before making a purchase. This means no matter how good your marketing or savvy your sales team, you can't beat a glowing (or sour) review from a customer's BFF, sibling, or second cousin-in-law.
Fortunately, there is a simple way to collect these nuggets of feedback, distill them into a formula, and then use them to fuel your business goals: NPS (Net Promoter Score).
What is NPS?
NPS is a method for measuring customer experience by asking one question, usually phrased like this: “On a scale of zero to ten, how likely are you to recommend us to a friend or colleague?”Based on your customers’ responses, you can place them into three categories: promoters, passives, and detractors (more on that in a moment).
The NPS framework was developed by Fred Reichheld of Bain Capital in the early 2000s, and over the last twenty years, extensive research has linked higher NPS with organic growth and long-term profitability. As brands like Apple, Amazon, and countless others have adopted the methodology, several NPS software solutions (like ours!) have been developed to help businesses (like yours!) collect, understand, and act on this invaluable customer feedback.
This guide will help you understand exactly what NPS software is—and what separates the good, the bad, and the great NPS software solutions.
What NPS Measures
NPS measures customer loyalty by asking what Bain refers to as the ultimate question (“How likely are you to recommend us/our product to a friend or colleague?”). Your customers will fall into one of three categories:
- Promoters respond with a nine or ten: they are your brand champions, usually making repeat purchases, spending more money, and talking up their great experience with your company.
- Passives respond with a seven or eight: they’re satisfied but unenthusiastic, and are vulnerable to being wooed away by your competitors.
- Detractors respond with a six or below: these unhappy campers are likely to churn and even bad-mouth your brand.
Once you’ve gathered this customer data, you can calculate your company’s overall score. It’s simple math: take the percentage of your customers that are promoters and subtract the percentage of detractors, giving you a score somewhere between -100 (yikes) to 100 (absolute perfection).
Best Practice: Ask a Follow-up Question
Discover the magic of adding a follow-up question to your NPS surveys like, "What is the primary reason for your rating?"This is where you get customer feedback gold. Their answers will give you concrete action items, as well as the chance to turn a poor experience into a great one.
Why NPS Matters
While NPS can show you where you stand with your customers, it’s only the jumping-off point for honing your Customer Experience (CX) strategy. When aligned with other CX metrics like retention, repeat purchase history, and overall satisfaction, you can use NPS data to develop initiatives to save consumers from churning, increase customer referrals, and boost your bottom line.
Potential customers and investors pay attention to NPS because it speaks volumes about a company, far beyond its likelihood of referrals. While your Statistics 101 professor wants you to remember that correlation doesn’t equal causation, there are well-documented relationships between NPS and both organic growth and customer retention. Beyond the metric itself, fielding NPS surveys also gives businesses the opportunity to gather qualitative feedback from customers.
Promoters will share what they love about your business, passives will let you know what could be better, and detractors will share pain points. Identifying those common themes and trends should help inform your CX and product roadmaps.
How Do Companies Measure NPS?
Gathering NPS Data
As we've discussed, NPS is measured through a basic survey—a question where customers are asked to rate the likelihood of referral on a scale of zero to ten, and (ideally!) an open-ended follow-up question. Collecting that data is the first step, and most NPS software options use some combination of email, SMS text message, or through a targeted pop-up on a webpage.
Email and text NPS surveys are ideal for evaluating your customer's feelings at a specific touchpoint, like immediately following a purchase or appointment. Most NPS software solutions will integrate directly into your CRM (Customer Relationship Management), making the data collection much simpler.
A webpage NPS survey taps into a more general audience, but should be designed to fit smoothly into the brand experience so it doesn't feel spammy.
Best Practice: Measure Regularly
Check in with customers via an NPS survey a) every six months at a minimum, and/or b) when a new product, service, or experience is introduced. Good NPS software will help you achieve the right balance of getting frequent data without over-surveying individual customers.
What is NPS Software?
It may seem like calculating NPS is fairly straightforward—straightforward enough to create and manage in-house. All it takes is an email list and a basic survey tool, right? Not quite. Collecting the data is only the first step, and calculating your score is far from the last. If you want NPS to actually make an impact on your business, you need to make sure your customer feedback is timely, accessible, and actionable.
Good NPS software is designed to give you robust capabilities to make the most of your feedback, including:
- Gathering data. Your software should collect real-time responses at a significant rate (our own average response rate is 25-30%, and we’re quite proud of it).
- Enabling understanding. Good NPS software analyzes data, identifies trends, and provides clean visualizations.
- Acting on insights. Automate response workflows, recognize top performers, prioritize and measure business initiatives—this is where NPS software becomes transformative, not just informative.
NPS Software Features
When shopping for your new NPS software system, use this checklist to make sure you’re getting the biggest bang for your buck. With a great NPS software provider, you should be able to:
- Create a positive experience. Your survey should be a positive brand interaction with your customers: easy, pleasant, and personalized with your company’s logo and messaging.
- Ask at the right moment. You should be able to control the frequency and triggers of every survey request, and smart NPS software will automatically put your surveys in front of your customers at a time when they’re most likely to respond (without spamming them to high heaven).
- Ask the right questions. You should be able to segment your audience and customize your follow-up questions based on your customers’ responses (often referred to as intelligent branching logic).
- Meet your customers where they are. Email will only get you so far. Your NPS software should include text and web-based options (at a minimum).
- Respond at scale. You should be able to create workflows with follow-up communications or case management actions tailored to your customer’s rating and comments, recent touchpoints, location, and/or preferences.
- Analyze and adjust. Your NPS software should scrape and analyze the data for you, packaging it into a visually appealing dashboard, including real-time reporting and historical trends.
- Share beyond the C-suite. Customer feedback is most powerful when every employee can see and understand it. TV dashboards, real-time notifications, and recognition tools help you build a customer-first culture.
- Integrate, integrate, integrate. From Slack to Salesforce, your company will adopt NPS much more readily if it fits in with the tools they already use every day.
- Power your growth engine. Good NPS software lets you target your promoters with automated requests for referrals, testimonials, or third-party reviews.
NPS Software Benefits
Bottom line: NPS software should provide a great experience for your customers, deliver transformative insights to your business, and help you build an always-on customer culture.
- Close the customer loop. There's nothing worse than taking a survey, giving feedback, and hearing crickets in response. NPS software makes it easy for your team to automatically engage customers directly from the platform—whether to send an automated thank you or have a conversation about how to make things right.
- Understand your customer experience. What’s the biggest pain point in your customer journey? Are customers growing more loyal over time, or less? Are any of your products or locations failing to deliver on your brand promise? These are the insights you can get from great NPS software—information that will transform your CX strategy.
- Transform your culture. The beautiful thing about NPS is how easy it is to understand. Companies that live and breathe NPS—that share real-time feedback on Slack, recognize employees who get rave reviews, and rally every team member around one simple metric—see an increasing obsession with customer experience.
Finding the Right Partner for NPS and Beyond
Spoiler alert: AskNicely checks all the boxes on the list above! Our NPS software is the simplest way to gather, understand, and act on customer feedback. And you don’t have to take our word for it. Check out our 500+ G2 5-star reviews, or read some of the comments from our own NPS responses.
To learn even more about NPS, schedule a demo today. We’re always ready to answer your questions and geek out on customer experience!