Small businesses live and die by what our customers think of us. Staying intimately connected to your customer base isn’t just advised, it’s essential to your very survival.
On The Fizzle Show, we often recommend talking with customers frequently, through both in-depth one-on-one interviews, responsive and frequent email conversations, and through surveys.
Each approach has different benefits. Interviews are great for really getting to know one customer’s perspective, problems, and how your solution fits in. Surveys are great for finding out how well you’re doing across the board.
You can devise your own surveys for different purposes. For example, we created a survey at the end of the year to find out what our customers accomplished in 2014.
But what about measuring your progress on a standard scale over time? How can you use surveys to find out if your solution is becoming more valuable to your average customer?
This is where the Net Promoter Score (NPS) comes in. NPS is sometimes called the “one number you need to grow,” and it’s based on a 2003 Harvard Business Review article by Fred Reichheld.
The NPS survey consists of two questions, and results in one score that could range between -100 and 100. Essentially, each customer is asked “how likely are you to refer us to a friend or colleague?” on a scale of 0 to 10. Those responses are merged into three groups: detractors (0 to 6), passives (7 to 8) and promoters (9 to 10).
Here’s what our survey looked like:
You then subtract the percentage of detractors from the percentage of promoters to get your final score. If you had 100% promoters, with no detractors or passives, your score would equal 100.
But companies rarely score higher than 70. In fact, the average company earns somewhere between 5 and 10. Amazon.com earned a 76 in 2012 and Apple earned a 71.
Anything between 0 and 50 is considered good, between 50 and 70 is excellent, and above 70 is “world class.”
How Fizzle Scored
On the Fizzle team, we’ve been working hard to achieve true product/market fit, or “traction.” We’ve had a great couple of years, and have grown to over 1,800 active members currently, but still haven’t gotten to consistent month-over-month growth, which is something we’re striving for this year.
The Net Promoter Score can help your company inch toward product/market fit by letting you know why people stay and why people leave. Do more of the former and less of the latter, and your score should improve.
We sent the NPS survey using a tool called Promoter.io (more on that in a minute) to 1,750+ paying members last week. Here is how we fared:
What does a score of 39 mean? NPS practitioners advise not to be tempted to compare your score to other companies, unless you’re in the same market. Knowing that we earned a 39 and Verizon earned a 32 is meaningless because the problems we solve are so different.
Instead, you should focus on comparing your own score to itself over time. Measure now, implement changes, measure again and see if your score improves.
For us, the score of 39 was somewhat confusing. We’ve read about companies like Groove (customer support software), which first earned an 11, then improved to a 16. Groove has achieved consistent month-over-month growth and appears to have true product/market fit, despite having a score of 16. I have a feeling this is exactly why it is recommended that you not compare your scores directly…
However, aside from the raw score, they survey also produces something that should be incredibly valuable. Each customer is also asked “what is the most important reason for your score?” and given a chance to answer with free-form text. The responses to that question represent your opportunity to improve.
I mentioned Promoter.io before. Promoter is a tool that automates much of the NPS survey process. Calculating your score and categorizing feedback would be a pain on your own, so Promoter.io does some of this for you. The tool wasn’t perfect, but it certainly saved us some time, and the CEO Chad Keck was very responsive to my feedback and he promised many upcoming features that should make the tool even better.
Of course, Promoter.io sent me an NPS survey about their business, for which I gave them a score of “8.” I can’t yet rave about the tool because there were a handful of issues that made using the tool take longer than it could. All told, I spent around 10-15 hours administering the survey, responding to customers and categorizing feedback. That makes me a “passive” in the NPS lingo for Promoter.io, but the CEO’s reply made me want to tell you about them. Plus, I’m not aware of any other tool that does a similar job, and this fit a real need for us. If you’re planning to run an NPS survey definitely check them out.
What We Learned from Customer Feedback
One of the important things Promoter.io helps with is capturing feedback and helping you categorize it. Here’s an example of some rave feedback we received:
And here’s one response from a “passive” customer:
And finally, here’s an example of a response from a customer that fits in the “detractor” category:
16% of responses had a score of 6 or less, and there is a ton to learn from the feedback. 84% of responses had a score of 7 and above, and we’re examining the positive responses to learn what we should do more of.
Here are the top 5 things our customers raved about:
- Content/courses
- Community
- Value/price
- The podcast
- Our helpfulness, support and the results people get
And here are the top 5 reasons people couldn’t recommend us:
- Not enough time to use Fizzle
- Friends aren’t entrepreneurs
- Forums/community aren’t useful enough
- Too self-guided, not enough coaching
- We go off topic too often / there’s too much noise
It’s too early to tell you exactly what we plan to change as a result of this feedback, but the entire process generated a bunch of new ideas, and validated several projects we already had in the works.
If you haven’t surveyed your customers recently, I definitely recommend giving the Net Promoter Score framework a try. Promoter.io made it fairly easy to administer, and we’ve been learning a ton.
Questions about Fizzle’s NPS survey, our results, or the NPS process in general? Ask below and we’re happy to answer!
If you’ve tried NPS or any other customer feedback survey systems, I’d love to hear about your experience below.
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The Top 10 Mistakes in Online Business
Every week we talk with entrepreneurs. We talk about what’s working and what isn’t. We talk about successes and failures. We spend time with complete newbies, seasoned veterans, and everything in between.
One topic that comes up over and over again with both groups is mistakes made in starting businesses. Newbies love to learn about mistakes so they can avoid them. Veterans love to talk about what they wish they had known when starting out.
These conversations have been fascinating, so we compiled a list of the 10 mistakes we hear most often into a nifty lil' guide. Get the 10 Most Common Mistakes in Starting an Online Business here »
Super interesting. I am astonished at the example of the “detractor” comments. Really? And people wouldn’t recommend you because they don’t know entrepreneurs? Of course we can’t recommend you to people if all we know are inside-the-box people, but one should take into account whether one would if you did happen to know entrepreneurs. Keep it up guys–the podcasts make me laugh!
Nevertheless, it’s useful feedback. Thanks for the comment Mary Claire.
16% “wouldn’t recommend us” now there’s an example of a great grabber headline!
I really like that you explained not to compare yourself to other companies. You can’t compete against people outside your industry and I would suggest not to compete with people in your industry. It does more harm than good in both cases.
Seeing where your business is currently at, researching what others’ do well inside and outside your industry, adjusting the good ideas to fit your company and testing them out on your own.
Thanks for the honest sharing.
This is very interesting, and thanks for sharing it. It made me realize I screwed up your survey though. I gave you an 8, which I meant as fairly high praise. My rationale was that nobody is perfect, so nobody gets a 10, and there is a certain element that won’t like your fooling around, so an 8 seemed appropriate. But that apparently puts me in the “passive” category, which is not what I intended. In fact, I have recommended and will recommend Fizzle to others. So apparently you need a new category called “promoters who cannot properly complete simple surveys.”
Ha! No sweat Jim, I think it all works out in the end. This is a rough measure, and I think some of this is to be expected with any survey like this. Thanks for clearing the air ;)
Seconded. I don’t know whether there was any leeway around wording the question you asked, but I read it as “How likely would you be to recommend Fizzle to someone who was a good candidate?”
Who am I to argue with NPS, but I have a hard time believing that anything but a blanket, anybody/anywhere recommendation from me to anyone who’ll listen should be taken as an indication of my dissatisfaction with the product.
Okay, Jim’s category suggestion is hilarious, and it’s one I frequently need in life as well.
Thanks for the article –very informative. My husband and I have a storefront business that uses Mindbodyonline and they have an integrated add-on called Listen360. When a new client comes in, we enter the email into Mindbodyonline and then Listen360 automatically sends the exact same question that Promotor.io does. If it’s a return client, they also get an email but not more than once every three months.(You can change this setting).
It has helped us respond to a few clients that didn’t like their experience. I’m not sure that it’s won them back but I feel better knowing that they had a format to tell us and gave us a chance to at least let them know we care.
I also like that we don’t have to do double entry since the two systems talk to each other. We currently have an 86% NPS so I guess we’re doing ok! My one question is whether we should acknowledge everyone that replied. Listen360’s recommendation is to only reply to detractors and passives with comments. I would like clients to know we’ve read their feedback, good or bad, but maybe this isn’t necessary. What is your recommendation?
I worked for Apple Retail for nearly five years and they live and die by NPS. It’s super cool that you guys are using NPS and posting here for people to benefit from. Hopefully this can be helpful to some folks. Here’s a few things I learned:
-Always look at trend lines, not individual scores. Learn what you can from a detractor comment, but don’t get stuck in the weeds of obsessing over someone who we didn’t connect with, especially if they didn’t leave a comment.
-Having multiple questions that relate to the whole experience is crucial. The OVERALL NPS is nice to look at, but when you can dissect behaviors and the resulting experience, thats the real value. EX: We have an NPS Score of 64, but our “Apple Rep was Knowledgable” score is 19. Clear opportunity there.
-We would rather get a detractor with a specific comment, than a passive with no comments. You have no idea what went right or wrong when it’s an emotionless number. Specific feedback is KEY to knowing what behaviors to Stop, Start and Continue.
-As a Manager, I called every detractor, if they gave permission to contact them. People are blown away that you would even bother and think that they’re comments just go into a hole. What a way to UNscale. People are more likely to be a PROMOTER if they had and issue that you resolved WELL than if they never had an issue at all. And if you think you don’t have time to call each of your detractors, each Apple store calls dozens to hundreds of detractors per week.
-Never focus changing the number, focus on changing the behaviors.
-It’s made me much more specific and intentional whenever I give feedback in a customer survey. There’s so much more value to understanding an experience than just scoring high or, worse, bribing or influencing a score for its own sake. (I actually had a manager at a Panera offer me any pastry I want if I promise to give him the highest score. I nearly walked out.)
Hopefully this was a bit helpful, if not fairly obvious already. Cheers folks.
Great points Kendon. Thanks for sharing, it’s cool to hear how Apple works behind the scenes.
I responded to all 650+ people who completed the survey. Sending something like this is a great excuse to check in with people and show them you really care.
Dude, 650+ that’s crazy. Does show that you care.
Yep, yep yep! I had the same exact thoughts Kendon [former Apple Genius] … I’ve never heard of a three man team online business using a system like NPS, very interesting Corbett!
Corbett, thanks for sharing the “behind the scene’s” look at why you did the survey. There’s a lot of great information here, and I really appreciate you explaining what you are up to as a community, and how you are trying to serve your clients better (its always helpful to see how others think through these challenges). I am a big fan of Fizzle, and will be recommending it to a number of folks in the comming weeks.
All the best to you, and your sustained growth!
Thanks so much Jim, we really appreciate the support :)
I was one of the “friends aren’t entrepreneurs” people — and I’m glad you find it to be useful feedback, Corbett. I think it helps define a notable portion of your users as people who feel a bit segregated from their 3-D friends and family, due to their choice of entrpreneurial/online pursuits. I did struggle with not adding “to others who Fizzle could help” to the end of that survey statement, but I refrained. I think we all need to know, if we’re serving a niche community, the value of finding others who not only speak the language, or who can help, but who “get it” and who care.
Fizzle is super awesome, full disclosure I recently stopped my membership due to a mid-life crisis, I just lost that “I have to not be an employee” fire. So, grain of salt in hand here goes….
what I thought of the good….
1. Content / Courses – some of the best out there, only thing I would change is having transcripts, not all of us can watch videos that much. I’m in the minority here, but something I can read versus listen to is my flavor.
2. Community – they are cultivating a good community, can it be better yes, but it is what the users make of it. We’re all a voice needing to be heard, so get out there and get heard engage people.
3. Value / Price – You get a very quality product for the price, if you partake in the podcast, Friday calls, forum and all the material they produce, it’s realistically underpriced. If you look at education cost the $ / hour is way below par.
4. The Podcast – My favorite podcast, the format is great, topics are awesome. Sure they digress a lot sometimes, but that’s kind of the uniqueness and value of it.
what I thought of the bad …..
1. Not enough time to use fizzle. If you are an entrepreneur and subscribe to fizzle #1 sign up and do Chase’s productivity course right after the intro ones. #2 you’re responsible for your time, make the time. You wouldn’t go to a movie and walk out half way saying, well I don’t have the time to finish it. The time you invest here is priceless.
2. Friends aren’t entrepreneurs – true, but we’re not all friends, Fizzle is here to bring together like minded individuals in a common location, teach and learn together and “Fizzle”.
3. Forums / Communities aren’t useful enough – this is another kick yourself in the ass type of thing. Sure they could use a community manager that really grabs people by the short and curlies, but part of being an entrepreneur is that someone isn’t going to hold your hand. When you jump into the pool, you are the only one that can decide to sink or swim. Consistently show up and see what happens.
4. Too self guided – not enough coaching. Fizzle isn’t a coaching site, if that is what you are looking for there are thousands of great coaches out there.
Coaching is guiding, taking you by the hand and questioning what you are doing. Fizzle is not coaching, Fizzle is a tactical resource that you can use to deploy in your endeavors that best suits you. They are more “advisers or consultants”.
5. Meandering is a good thing, it maintains creative thought and flow. Disruption when you are learning something is valuable. Quit focusing so hard on the trees that you miss the forest.
That’s it, I’m done with my daily ranting, time to go fire up the chainsaw and destroy some trees.
Via Con Dios Amigos
I would also have qualified the question. I’m a pedant and I would recommend – whole heartedly – fizzle to any appropriate person.
It’s the perfect thing for the level it’s geared at.
For freelancers < $200k in revenue, it's perfect.
For product creators or solution providers, trés cool.
For anyone that was a fit, yes.
For anyone I know? Dunno.
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Hey guys, great post. We use NPS at WP Curve as well. However it’s only 1 of 3 ways we survey customers. There is a big piece of the puzzle here that a lot of people miss in the NPS and that is the competitive landscape of the business.
In terms of how happy our customers are, we focus mainly on our happiness ratings in Help Scout. Customers click links at the end of every job and tell us how happy they are. The score works in a similar way to the NPS in that it starts with the ‘Great’ score % and takes away the ‘Not good’ % and ignores the one in between ‘Good’. So say you had 90% say great, 5% say good and 5% say not good. The Happiness score would be 85.
In terms of our scores.
Our happiness score is 82. Not very good and something we are working frantically on. In fact we just set up a wait list and turned the service off until we get it under control.
Our NPS score however is 57 which is close to the best in the industry (Amazon levels almost).
Our happiness score doesn’t factor in competition though. Because our model is new, we’ve enjoyed a period of not having much competition. That makes people a lot more likely to refer us because there aren’t that many other choices. This won’t be the case forever but if we only paid attention to NPS we probably wouldn’t discover what we have to work on.
In your case, in terms of online entrepreneurship communities you are an an extremely competitive market. Not only can people solve their problem with lots of other online communities, they can also solve the problems in hundreds of other ways (books, masterminds, courses etc).
So I think in your case the NPS score itself may never reach stratospheric levels based purely on that, regardless of how good the service is.
Thanks for sharing Dan. You’re right that competition is a big factor which is probably not figured into NPS scores well. Happiness score sounds like an interesting measure as well. Regardless of which measurement people use, it’s just great to put a stake in the ground to measure from, and to collectively find out what your customers think of you.
Hey guys. Great article! I had heard of NPS before but never really understood how it could impact my small business (I thought it was a big biz game).
I wonder though if this is a useful tool if it’s not based on a product. For instance, I run a free community where people gather and ask questions on systems, tools, productivity, and the like. Would checking out the NPS score for the community be worthwhile?
I like the aspect of this survey not being complicated but I also agree with Kendon’s second point he makes on gaining perspective into their experience.
I’ve found these five questions can yield rich insight without bogging down and over complicating the process . . .
1. What happened?
2. How are you feeling about it?
3. What did you learn?
4. What did you learn about yourself?
5. How will this help you in the future?
This is beginning to end, front to back approach.
It’ll be cool to see in the future what you guys implement and learn and what happens as the result of using whatever survey strategy you use in the future. :)
Keep learning new things so this is cool that you shared this metric. But, the contrarian in me has a nagging question…I’m a fan of Behavioral Economist Dan Ariely (author of Predictably Irrational) and, as he pointed out, many marketing and feedback surveys were flawed from the get-go because people tended to…ah-hem…bend the truth. Secondly – of the percentage of us who responded, can you be sure there’s an accurate extrapolation of that percentage reflected in the final score? Put it another way, do you really have 55% promoters, or is it more likely that a promoter-type personality would participate in a survey? I love FIzzle and am not a detractor – just for the record ;) Merely asking hypothetical questions so I can better understand.
Great question James. The way I look at it is this: obviously some detractors/passives still participate in surveys like this, given the range of scores we got. It isn’t all promoters who complete the survey.
BUT, the overall percentages are far less relevant than our ability/attempts to improve the scores over time. Regardless of who may be biased towards completing a survey like this, if we’re able to improve scores, that should show progress towards improving the product overall, and towards generating more word-of-mouth referrals.
Sound about right to you?
I believe you answered it perfectly. The psychologist in me wants more research out of curiosity, but the kid in me likes your approach to increasing the % is improvement period. (the kid in me also likes the frosted side) Thanks!