MBA1396 What Is NPS, and How Can It Improve Your Customer Retention?

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Hey O welcome to the $100 MBA show where your business gets built every day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the Hundred Dollar mba, a complete business training and community online. And in today's lesson you will learn what is NPS and how can improve your customer retention. NPS stands for Net Promoter Score and basically it's a one question survey you ask your customers and based on that answer to that question it gives you an understanding of how likely customers will continue to be customers. In today's episode we'll break down exactly what NPS is. How you can actually run an NPS campaign so you can get your NPS score and learn how the answers to that survey can help you retain more customers. NPS really is very popular in the SaaS world, in the software world because retention is so important because you want to keep your customers happy and continue to be paying members. But now NPS has grown to all types of businesses and has been a great tool to keep customers. We got so much to cover in today's episode so let's get into it. Let's get down to business. So NPS stands for Net Promoter Score and it's a one question Survey asking this question, how likely are you to recommend our product or service to a friend or colleague? And the choices for an answer is a score of 1 through 10. So they can choose like 1, 2, 3, 4, 5, 6, 7, 8, 9, 10. One of those numbers, 10 being very likely, 1 being not likely at all, right? And if somebody were to score a 9 or 10, they are considered a promoter. If you score 9 or 10, that means that you are most likely. Promote that business, that product, that service to other people, share it on social, mention it, recommend it. They choose seven or eight. It's called passive. They're a passive user. They might enjoy the product, but they don't love the product to the point where they would share and tell other people. And 1 through 6 are considered detractors. If they score 1 through 6. If they choose, 1 through 6 are considered detractors. These are people you need to address because they can do damage to your business, to your brand, and they're not having a good experience. And they may speak about that bad experience on social to friends and family, word of mouth. So your net promoter score is tallied up by saying the percentage of promoters minus the detractors times a hundred. That's your net promoter score. Now, the reason why this question is so relevant is because it's a really good question to ask. Because instead of saying, do you like this product? That's a very vague question and it's very broad. You might like a product, but if you really love it, you're going to tell other people. This is why it's phrased this way. Now, the whole point of the NPS program is to let you know who you need to address, who you need to speak to, and those are the detractors. And what you typically do is you would contact these detractors via email, ask if you can get on a call with them to find out why they would not recommend you to other people, why they're having a bad experience, and how you can help them out. You want to turn them around somehow. So I'm going to walk you through for the rest of this episode on how to put together this NPS program and build this sequence where you can contact and have these conversations contacted. Attractors. I mean, so it seems like such a simple task, right? To just ask one question and have somebody score it from 1 to 10, right? But amazingly enough, this is a very hard thing to do without the proper software. And there's so many different pieces of software to do it. So it's not something so Straightforward. It's not like something you could do with a Google form. If you have a small business or you have an online business, a website, I highly recommend you check out a tool called servicit. Servicit is the tool that we use. It integrates with Intercom as well the chat software. It's very reasonably priced and it really is easy to use. We've tried so many others and it's very, very complicated. You can easily embed your NPS survey on your website, on your app Nice and eas and you can check your NPS score on the regular. And you can also go into your dashboard and find out who gave you a detracting score. And you can know their email address so you can be able to follow up with them. So the first thing is a checkout server could see how you can, you know, install this into your website. I know they have a trial you can try out. They'll even give you an NPS score template. So you don't really need to do anything other than change your logo or your welcome message. And from there you can start giving out your NPS survey. Now you want to kind of drip feed this some way or give it to only certain people at certain times. You want somebody who's been with your product, has been a customer for some time to take the survey, not somebody who's, you know, just came on board. Maybe you want to kind of have it display after they've been with you for three months or so. And Survicate has some suggestions inside their app. So now you got to email your detractors. An easy way to do this is to use something like Zapier, where you can, uh, pull out and, and dump the email addresses of the detractors into your email marketing software like mailchimp. And you can send an automated email saying, hey, I see that you've given us a score from 1 to 6 on your NPS score. I'd love to learn more about why you're not having the best experience possible. And what we like to do is offer them to buy them a cup of coffee. Say, hey, we'd love to send you a Starbucks $10 gift card for 10 minutes of your time on a call. Now, you're not going to get a lot of detractors. And if you're a small business, this is only going to be few and far. And you only have maybe a few calls a week at most. And not everybody's going to take you up on the offer, but some will. And those who do will help you inform your team and your product on how to improve. Find out how you can get that NPS score higher and turn them around because they can take the NPS score again. Or I should say take the NPS survey again and give you a new score, a better score once you fix the problem, right? So on this call, it's just a frank call for about 10 minutes asking about their experience, asking how you can improve, what they would like to see and you don't have to complicate it. You would say, what would it take for you to score us a 9 or a 10? What would you need to have in your product or service? The whole name of the game of NPS is finding out who's not happy and how you can improve their experience. And it's not just those individuals, but these are trends. You want to fix the problems that are coming up in your business so new customers don't experience them and have a bad experience themselves.

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Setting up your NPS in your business could take really just an afternoon. Maybe this weekend. You can take the time to check out Servicit, try their trial, set it up on your website and start gathering information about how satisfied your customers are and how willing they are to recommend you to others. Of course, our whole goal here is to find out who's not happy so we can contact them and find out why so we can fix our product. We can improve our services. We can become better and better every day and get that NPS score as.

High as possible possible.

This is an easy thing to get some data and get some insight on your business. Like Peter Drucker says, what gets measured gets managed. So make sure you're measuring nps. Thank you so much for listening. If you love what you hear, share this podcast with your friends and family on social media or just tell the person right next to you. Hey, check out the Hundred RBA show podcast. I listen to it. It's one of my faves. It's the best way to give back to us, the podcast team. Before I go, I want to leave you with this. There's so many things you could do to get information about your customers. Exit surveys, cancellation surveys, pre sale surveys, all that stuff. But NPS is one of the basic things you can do to get the conversation going with your customer. It's a simple thing for them to do. They just have to click one button, you know, just give a score one to 10. And it's very unintrusive and it doesn't take too much time from the experience of enjoying your product or service. So it's a good place to start. Thank you so much for listening and I'll check you in tomorrow's episode. Thanks for watching. See you then.

Take care.

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