How to Attract Better Customers and Qualified Referrals with NPS Data

Tuesday, September 14, 2021

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The Net Promoter Score (NPS) gives you access to relational insights. Whereas the Customer Satisfaction (CSAT) survey gauges individual metrics (i.e. how a singular interaction went), NPS gives you a satisfaction overview spanning the entire relationship.

You should collect both in tandem in order to paint an accurate picture (and ultimately improve) the customer experience.

Yet, NPS data gives you unique insights in a way that CSAT can’t (and vice versa). It helps you dive deep into:

What your customers think about your business;
What they feel could be improved;
Why they’re delighted (or disappointed) in their experience;
If they’ll send quality referrals your way, and;
If they’ll remain loyal or churn.

Digging deeper into these insights allows you to leverage what’s going well (so that you can replicate it across your business), and dig into what isn’t working (so that you can optimize your operation accordingly).

In this article, we’ll show you how to understand your NPS data to draw meaningful conclusions. This includes leveraging positive (promoter) feedback to inspire loyalty and attract better customers, and how to turn neutral or negative (passives or detractors) into promoters to improve referral quality and reduce churn.

Understand your NPS data to draw meaningful conclusions (and plan your next move)
How to turn passives and detractors into promoters to improve referral quality and reduce churn
How to leverage promoters to attract better customers and inspire loyalty
Wrapping up

Understand your NPS data to draw meaningful conclusions (and plan your next move)

NPS data is a treasure trove. Compared to CSAT, which surveys specific touchpoints (i.e. “how was our service just now?”) and calls for a “positive”, “neutral”, or “negative” response—NPS goes deeper.

It asks the question, “How likely are you to recommend [company name] to a friend or colleague?” and calls for a “likely”, “not likely” or a “somewhere in the middle” response.

It’s collected on a scale from 0-10, with the results bucketed into three categories:

Promoters score your MSP from 9-10 (i.e. “very likely”)
Passives score your MSP from 7-8 (i.e. “somewhere in the middle”)
Detractors score your MSP from 0-6 (i.e. “not likely”)

Why is this data so valuable? Because it goes beneath the surface.

Rather than simply asking how a specific service, workflow, or tool is working, it asks your customers how they feel about working with you. It’s the big picture moment that helps you understand if the service you are providing aligns with your client’s needs.

Importantly, it opens the door to ask follow-up questions and dig deeper. For example, if you are satisfying their needs, why is that so? What are you doing right, and why is it working with this specific client, in this specific situation?

On the flip side, if they are not satisfied, or fall in a neutral zone, where are you missing the mark? What went wrong, why did it go wrong, is it something that can be fixed, or is it best to part ways?

Let’s look at each NPS response category in more detail and explore how you can leverage the answers to those questions to attract better customers.

Promoters

Promoters are your most valuable customers because they are delighted with their experience. This makes them:

More likely to provide social proof
More likely to repurchase
More likely to forgive a mistake or snag in their experience
More likely to send quality referrals your way
Loyal, which is great for your ROI and profits (a 5% lift in retention can improve profits by 25% to 95%)

Because they are happy, promoters are more likely to provide useful feedback that you can learn from to optimize your operation.

Most importantly, promoters are brand advocates. Because they are loyal and satisfied, they are likely to recommend your MSP to their friends, family, and colleagues. As referrals are still the most effective way to attract new customers, having a loyal customer send one your way is gold.

Promoters may also post a positive Google review online, which can help you stand out from the crowd and grab the attention of prospective customers.

Social proof from customers that are highly satisfied also improves referral quality. This is key, as low-quality referrals that aren’t a match for your offerings may not be worthwhile. New business that doesn’t align with the type of operation you’ve built could end up wasting time, resources, and money.

Regardless, what promoters have to say, both to you and your wider audience is invaluable. They should be nurtured, thanked, and rewarded in order to keep them satisfied and loyal.

Passives

Passives are neutral, thus a bit unpredictable. This makes them:

Happy enough to work with you, but not jazzed enough to recommend your business
On the fence about loyalty, making them vulnerable to churn at any moment
Unlikely to pass any referrals your way
Unlikely to say anything about your business in public, good or bad

Passives are often overlooked, which is the wrong strategy. That’s because they present an opportunity to be converted into promoters. On the flip side, they could just as easily slip into detractors.

To persuade them to move up, not down, the scale, it’s important to understand why they feel neutral. They’re likely satisfied enough with your relationship to stay but aren’t wowed by it. This means that they probably have valuable feedback on areas of improvement.

Based on their responses, you’ll likely be able to:

Pinpoint problem areas and adjust accordingly
Identify root causes of pain points and make changes to strategy, workflow, tools, or processes to squash the issue
Unearth areas of missed opportunities to improve the customer experience
Realize the need to offer a new tool, service, or product to fill a gap

Acting quickly and meaningfully on feedback from passives is the best way to transform them into promoters and expand your loyal customer base (more on this in the next section).

Detractors

Detractors are not happy with their experience. This means they:

Might recommend against your business
Might spread negative feedback
Might not give you any feedback (meaning you won’t know what went wrong, which makes the problem harder to fix)

Interestingly, studies show that only 1 out of every 26 unhappy customers are likely to complain. That makes it much more common to hear nothing from detractors, as they’ll simply churn.

The takeaway? If a detractor leaves you feedback, treat it like a precious good. The fact that they are reaching out means that they value the relationship enough to give you an opportunity to improve.

Furthermore, by sending regular NPS surveys, you also increase the probability that you will receive a complaint, rather than having a customer stew in silence—which, in turn, increases your opportunity to retain them.

If the problem can’t be remedied, it could represent a misalignment in terms of their needs and your ability to satisfy them. Still, it’s always worth trying, as it’s often easier (and less time-consuming) to win over existing customers than onboard and build a relationship with new ones.

We’ll talk more about how to turn detractors into promoters in the next section.

Categorize your NPS data responses to quantify the results

Besides simply categorizing your NPS data by “Promoter”, “Passive” and “Detractor” it’s important to categorize by topic, too. This will help you to more easily understand:

What you’re doing well
What needs improvement
Where there’s a breakdown in a process, workflow, skill, or technology

It’s important to note that the client behind the response is just as important as the response itself. Understanding their situation will help you gauge if their response is specific to them, or if it will resonate across your entire client base.

For example, you may find that demographic X (e.g. business owners aged 25-35) with a goal of Y (e.g. improve security) are consistently unsatisfied with the speed of putting out a fire. Yet, older demographics with the same goal have no problem with the speed of service.

Therefore, this problem may be related to a generational expectation gap. Younger clients that are more familiar with technology and used to a fast-paced world may not settle for your existing speed (to patch a security bug, for example).

If this is something you can speed up, you should do it for all clients. But, if there’s no way to speed up your service without risking making a mistake, the fix may be to set better expectations rather than try to satisfy an unrealistic one.

You can categorize your NPS data by:

Open-ended responses (i.e. functionality, usability, reliability, customer service)
Demographic data (i.e. age, income, location)
Root cause analysis (i.e. what is causing the issue, if that reason is unique based on other factors, and so on)
Trends (i.e. how has their opinion changed over time)

Understanding the reason behind a review, positive, neutral, or negative, and where that review comes from, makes it much easier to plan your path forward.

How to turn passives and detractors into promoters to improve referral quality and reduce churn

Ideally, everybody loves your business and is happy to work with you. In reality, there will always be some issues to sort through. Here’s how to approach neutral or negative reviews in a way that drives them towards promoters.

Addressing passives

Passives are primed for direct follow-up questions. They’ve taken the time to send you neutral feedback, which raises the question: “what can we do better?”.

When reaching out with direct questions, leave no space for neutrality, as they’ll likely give a similarly neutral response. Instead, ask what you can do to move the response from “fine” or “I don’t know” to “great” and “here are some ideas”.

Say your initial NPS survey included the standard “How likely are you to recommend [company name] to a friend or colleague?” question. A passive replied with a 7. Here’s how you can follow up more directly:

“What can we do to improve your experience?”
“What product, service, or support would you like to see changed or done differently, and why?”
“What, if anything, is missing from your experience working with us?”

These questions also add a human touch, as they see you’re following up beyond the basic NPS survey and paying them the personalized attention they deserve.

Based on their responses to your follow up questions, you should be able to:

Better understand their pain points so that you can improve the experience
Improve operational efficiency to resolve a friction point
Understand if they want/need a service or feature you don’t yet offer

If it’s easy to tweak a few things to provide the customized experience they crave, this small effort will likely prevent them from churning and delight them enough to turn them into promoters.

If they are in fact having a negative experience, but it hasn’t grown into a big problem yet, nip it in the bud as fast as you can. The faster you make up for a negative experience, the more likely you are to win them back before they become detractors.

Addressing detractors

Detractors are bothered to the point of almost no return. But, as mentioned above, if they reach out with concern instead of churning without notice, all is not lost.

Similar to passives, you need to identify the reason behind their response. That said, the questions can’t be as open-ended as those you send to passives. They need more personalized support because their grievances are bigger, more intense, and more fragile.

Therefore, when you reach out to detractors, lead with empathy above all. They’re upset and want to be heard, so start by sympathizing with them. Let them know that you’re sorry they feel this way, and you’re here to listen and bring this to a resolution as quickly as possible.

Along that same vein, respond swiftly. Slow response times bother people on a good day, so imagine how a detractor will handle a turtle-like reply (hint: not well).

Also, give them more than one way to get in touch. Let them know you’re open to a conversation via email, phone, or another medium to give them a forum to voice their complaint.

This all leads back to detractors wanting to be heard. Even if you do not succeed in keeping their business, you should care about hearing them out to make sure their problem isn’t widespread.

Ideally, once you do get them talking, you’ll be able to come up with a solution to their problem. But be careful not to promise a fix that isn’t realistic, or that will take longer than expected, as that will only inflame an already tense situation.

If you do decide that their problem (or idea) is fixable (or worth taking up) within a reasonable timeframe, make sure to get the appropriate people on your team involved immediately. And, keep the detractor in the loop throughout the process. This way, you show that you not only care about their problems or insights but that you value them enough to keep them apprised of your progress.

Most importantly, if the detractor does end up churning, learn from your mistakes. Use this experience to future-proof your operation so you can avoid a similar situation.

How to leverage promoters to attract better customers and inspire loyalty

Promoters will likely advocate for your brand without you needing to ask. They love what you do, they’re happy to work with you, and they are excited to bring their network onboard.

Still, intentionally asking for referrals in the MSP world ensures you are being proactive in lead generation activities rather than relying solely on chance.

In this case, timing is everything. One of the best times to ask for a referral is right after they send positive feedback your way. That’s because the experience is fresh in their minds so why not strike while the iron is hot.

Another tactic is to reward your promoters through referral campaigns (if you have the budget). This will help to incentivize them to share social proof and push them to become brand advocates (if they were on the fence).

This might look like X% off of a recurring monthly fee for X months if they bring in a new customer. Or, X free support hours in a quarter (above the standard range).

Loyalty programs help to stimulate the relationship by making them feel acknowledged (and thanked) for their ongoing patronage. This sentiment applies to your QBRs, too. The best way to ace your QBRs is to center your customer’s needs so that they feel like you are asking for feedback to help them, rather than help yourself.

Wrapping up

NPS data gives you important insights into how your customers feel about working with you.

From this feedback, you can leverage your happiest customers (promoters) to become brand advocates and send quality referrals your way.

You can also learn from your neutral and least happy customers (passives and detractors) about areas of improvement, what you can do better, service or technology gaps, and more.

The worst thing you can do is ignore NPS data and assume promoters will consistently advocate without a kickback or acknowledgment, or that passives and detractors aren’t worth following up with.

Use your NPS data wisely, and you’ll build a consistently productive feedback loop that drives growth (and positive ROI).