The Importance of NPS for SaaS and B2B Organizations

What is it and why does it matter so much?

Let’s take a closer look at how NPS boosts business and keeps boosting business over time.

In essence, the key purpose of an NPS survey is to measure customer loyalty by categorising their customers into three groups:

  1. Passives
  2. Detractors
  3. Promoters

The result of an NPS calculation is an overview of which customers…

  • Would recommend your company (are staunchly loyal customers who are key to the running of an organization)
  • Wouldn’t recommend your company (are likely to actively search for business elsewhere)
  • Are neutral (are neither ecstatic nor displeased with a service but may go elsewhere if they are offered something at lower cost)

Leading with Loyalty

Naturally, organizations with high NPS scores and a high percentage of promoters thus have the bragging rights to assert their resounding successes with customer loyalty and customer success management.

In fact, according to research done by Bain & Company, the masterminds behind the NPS system, ‘companies that enjoy this ‘loyalty effect’ grow at better than twice the average for their industry’. You can read more about this in their article here. 

Loyalty leaders are classed as companies at the top of their industries in their Net Promoter Score®

The palpable upside to this, is that it gives potential customers the reassurance and encouragement they need to take the next step in engaging with your business. But alas, a high NPS score is by no means a guarantee that an organization’s customer success levels are future ready and dependable.

An Important Asset for SaaS and B2B Organizations

As a SaaS or B2B organization, eight times out of ten, there won’t be a physical product to market.

Look at this way, a shop might be selling a scented candle. Someone buys it, they really like it and so they show it to their friend and ask them to smell it. The friend likes the look and smell of the candle too, so they go to the store and buy their own. As a SaaS or B2B organization, we often don’t have that physicality. To foster customer loyalty, the customer service within a SaaS or B2B organization must be agile with high visibility. You can read more about agile customer service in our blog, here.

To put it simply, our scented candle is our NPS score. We’re not just selling a product, we’re selling high quality customer service.

By extension, when a customer scores a company high on an NPS survey, they’re effectively indicating that they’d put their own credibility on the line to recommend your organization to somebody in their network who trusts their expertise. Of course, this is very helpful information for organizations to collate as it is. What’s more important, however, is why the customer is willing to put their credibility on the line by recommending your organization – or indeed, not recommending your organization!

Optimizing NPS Survey Results

NPS survey questions are formulated to be easy and quick to answer. In fact, an NPS survey shouldn’t take more than a minute to complete (really, we’re not just saying that). Now, onto the most important part – feedback. After completing the survey, participants are invited to give the company feedback. Of course, not everyone will want to. This can be for a variety of reasons; it might be too testing of their company compliance policy, it might be because they don’t have a clear-cut reason for their answers. However, more often than not, they simply don’t want to. You can lead a customer to water, but you can’t force them to tell you how to run your business. Customers are more inclined to answer surveys for you when you have given them:

A) Excellent customer service that has exceeded their expectations or,

B) terrible customer service that has lowered their expectations.

Creating a Feedback Loop

To ensure that it’s option A, using NPS feedback is key to creating an effective feedback loop with your customers. By analysing the feedback you have, creating a plan that aims to address that feedback – be it positive or negative – and then delivering on that feedback, you create a healthy feedback loop wherein there are visible signs of customer feedback being implemented into your ways of working. Some simple tips for doing so are:

  • Improve on negative feedback in a timely, well thought out fashion
  • Improve on positive feedback (in this case, you can’t have too much of a good thing!)
  • When hiring, keep NPS in mind. Do you have a specific role that focuses on the happiness of your customers? If not, are you hiring customer facing roles that will improve their happiness over time?

Consistency, authentic care and visible results are the key drivers of a high NPS score.