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As a Customer Success Manager, the Net Promoter Score® is the most important key figure for long-term customer loyalty to the company. For growth hackers, the NPS can be an even more valuable metric to drive the short- and long-term growth of your company.
You should focus on long-term growth. Since NPS® measures your customers' satisfaction and loyalty to your product, this is the main difference between a steadily and steeply increasing growth graph and a temporary growth followed by a gradual decrease.
Smart growth hackers have made NPS an important part of their loyalty and growth strategies.
We show here what you should pay attention to:
A great product is the ultimate growth hack
Many startups focus all their attention on customer acquisition and spend too little time developing a great product.
The end result is a product that attracts specific customers in the short term but ultimately fails to hold onto them. The quality of a product in relation to customer expectations is the most important factor in determining customer loyalty measures. If the product does not deliver the promised or expected quality, you will lose customers faster than you can acquire them.
No growth will help your business develop when you lose customers due to poor product or service quality. Since customer loyalty is driven by product quality, staying on top of things is by far the most important aspect of growth.
The Net Promoter Score is the only metric you can rely on to see how customers really think about your product. The NPS is also a metric that you can use to identify weaknesses that could affect or prevent the long-term growth of your product.
The better your product is and the better it meets customer expectations, the easier it is to retain customers and drive growth. For assessing customer loyalty, the NPS is a great way to understand how satisfied your customers are with your product.
Loyalty and referrals drive growth, not acquisition
While online marketing gurus might tell you otherwise, there is a huge difference between user acquisition and user growth. Acquiring a customer does not guarantee that you will retain them, which means, there is no direct link between acquisition and growth.
Customer acquisition is more glamorous than retention, so it gets a lot more attention from online marketers and growth experts. This is likely because it's much easier to show the acquisition on an investor-friendly graph than it is to show a high retention rate.
Even so, retention for a longer period of time is far more important than acquisition alone in order to increase your company's sales.
Retaining customers longer brings two major benefits for your company's ability to grow:
- You will generate revenue with each customer over a longer period of time, especially if your product is monetized via a monthly fee or advertising.
- The longer customers stay with you, the more likely they are to refer friends and colleagues, which will lead to long-term, organic growth for your business.
Startup growth can be broken down into five super metrics:
- Acquisition
- Activation
- Retention
- Recommendation
- Sales
Remember that keeping a customer is much cheaper than getting a new one. It is also much cheaper to get a customer through word of mouth than to market aggressively, be it through paid advertising or direct selling. When using NPS for your startup, it helps a lot to do both.
NPS puts you in the right position for successful customer loyalty
Focus on growth metrics like your conversion rate or average cost-per-acquisition and it will be easier to base your marketing on acquisitions rather than growth.
Focus on the Net Promoter Score and it will be easier to get into a loyalty mentality where keeping your customers is as important as getting them in the first place. This shift in priorities has a huge impact on your ability to keep making your product better.
Instead of asking yourself “How can I get more customers?”, The question in the future will be how you can keep more customers.
It also has an impact on your users. Since NPS measures people's enthusiasm for your product and divides them into critics, passives, and promoters based on their feedback, it's an excellent tool for identifying and mobilizing customers.
When a customer responds with a score of 9-10, they not only indicate that they are happy with your product, but also that they are actively interested in promoting it.
Mobilize these brand advocates and you will have valuable capital to grow your growth.
There are several ways to send incentives to your promoters. For example, as part of the evaluation, you can send your promoters an incentive via an individual thank you page to recommend their services or products to friends and colleagues.
You can encourage them to talk about your product or business on social media.
You can also ask them to write a public review of your product, make a short video, or link to your website. Depending on your goals, you can benefit from several of these possible measures.
Develop a follow-up process with your promoters and you'll get more than just intelligence from NPS - you'll get real, measurable value from your most enthusiastic customers.
NPS is closely correlated with strong word of mouth
The Net Promoter Score correlates very closely with word of mouth. This can be good or bad: a high NPS is closely linked to positive word of mouth from promoters, while a low NPS could be an indicator that your product is generating negative word of mouth that is affecting acquisition.
This is especially important if your business is small. Research shows that up to 85% of new customers acquired by small businesses can be attributed to word of mouth. Focus on maintaining a high NPS and you could find a valuable resource for new customers.
Real recommendations and recommendations from customers outperform any social media campaign in the long term. Focus on gradually improving your product to increase your NPS and you will develop the kind of word of mouth that produces exponential growth.
NPS-focused growth hacking is sustainable
While having a viral product is great, the viral buzz can only last until users lose interest and move on to the next big thing. Likewise, paid advertising and acquisition works for as long as you have the budget, but quickly fades when you hire it again.
As your product's customer base grows and the low hanging fruits disappear, each new customer costs more to attract than the last. If your growth model is acquisition-centric, the bigger your company becomes, the more you will be forced to spend more money on user acquisition.
NPS-focused growth, on the other hand, grows with increasing size and decreasing costs the larger your user base becomes, as more users become promoters and recommend your product to their friends, colleagues and acquaintances.
This leads to the growth of viral user acquisition, but without the cost that exponential growth typically requires. It's a slower, more conscious form of growth hacking, but more sustainable and effective in the long run.
Use NPS to further expand your company.
By using the Net Promoter Score to your advantage, you can create more sustainable growth for your business - growth that will last over the long term, not just as long as you can afford to fund it.
With Callexa you can track and analyze customer satisfaction with the help of a simple customer survey.
Learn more about how Callexa works and start your permanent free version today to survey your customers using NPS and help your business grow.
Recommended reading: If this article helped you and you would like to learn more about the role of NPS in shaping the customer experience, continue reading here: "The role of NPS in customer experience (CX)"