226: How & When to Use NPS Surveys in Your Startup

The Startup Chat with Steli and Hiten

In this episode, Steli and Hiten talk about using an NPS (net promoter score) survey tool for startups. Steli didn’t know that a NPS survey could be used for anything other than testing your own core product. In today’s episode, you’ll hear the different ways Hiten is using this tool to build his business. You’ll also find out why the NPS survey tool is not just a score—the real value is found in knowing WHY you received the number you did in the first place. Tune-in to find out how to maximize the use of the NPS survey tool and how it can help you turn your “detractors” into “promoters” for your business.

Time Stamped Show Notes:

• 00:05 – Today’s episode is about how and when to use an NPS survey for your startup
• 00:34 – Steli and his team at Close.io were inspired by Hiten’s email regarding the NPS (net promoter score) of his online webinar workshop
  • 00:55 – Steli says he has not thought about getting an NPS score for anything else other than their core product
• 01:58 – A NPS is a customer satisfaction score that helps you put people into 3 buckets
  • 02:34 – You use only one question – How likely are you to recommend this product to others?
  • 02:50 – The options are from 0 to 10, 0 being not very likely to 10 being very likely
  • 03:02 – There is a scoring system – a score of 9 or 10 is a promoter, 7 or 8 is passive and anything lower than 7 is a detractor
  • 03:32 – A detractor is someone who will tell other people to NOT use your product, a passive person will not say anything and a promoter is someone who will promote your product actively
• 03:58 – Hiten’s workshop got an NPS of 88 compared to Apple’s 89 and Tesla’s 93
• 04:19 – Hiten is planning to beat his score in his next workshop
• 04:40 – Hiten loves doing using a NPS because it’s a simple metric that is informative
  • 04:55 – Aside from having the score, what’s really powerful is the next question you can ask – What’s the most important reason for your score?
  • 05:22 – Look at the patterns between the various responses of those in the three buckets and then make it better
• 06:13 – Steli says the NPS is very simple to do and is widely used; it is a benchmark for certain industries
• 06:40 – Hiten is currently doing research in the online document space—he asked for the NPS and follow-up question for Google Docs, Dropbox, Microsoft Word and a few others
  • 07:15 – Steli says he has never heard of somebody doing a survey for someone else’s products
• 07:36 – Steli says he thought the NPS could only be used for their core product
  • 08:37 – What Hiten wanted to do was gauge the success of his workshop and open his mind for different ways NPS could be used
• 09:41 – Hiten says at the end of every experience, it’s a great to hear the answers of the passives and detractors
• 10:03 – The goal is to get more people to be promoters
• 11:03 – Hiten says what is more important than getting a score is knowing WHY, that’s why it’s important to ask the follow-up question
• 11:49 – The biggest mistake people make is that they don’t ask the 2 questions together
• 12:01 – Hiten says it’s about how you can improve your own product by gauging your customer’s experience
• 12:33 – Hiten says to not ask the same people to do the NPS again and again
• 13:15 – You can ask people at certain points in their experience, like after a workshop or a few weeks in using a product
• 14:03 – Hiten says the NPS is a problem-solving tool and a learning tool; not just a score
• 14:19 – Steli says Hiten’s transparency in regards to how he is building his new company is valuable for everyone
• 14:55 – Join Hiten’s newsletter list to get value every week at producthabits.com, you can also get a free ebook when you sign up
• 15:24 – Hiten sends 10 links about business and product development every week as well as a link to the podcast
• 16:05 – Hiten just sent the Hiten Bomb, today
• 16:41 – Give a five star review and rating on iTunes
• 16:51 – Hiten recommends delighted.com – they are the best NPS tool out there!
• 17:44 – End of today’s episode

3 Key Points:

1. When implementing an NPS, don’t just look at the score; examine WHY they gave you that score.
2. Using a NPS tool will help you turn more people into promoters for your business.
3. A net promoter score is a problem-solving tool and a learning tool that will help you improve your business.

Steli:

Hey, everyone. This is Steli Efti.

Hiten:

This is Hiten Shah.

Steli:

In today’s episode, I want to talk about how and when to use an NPS survey in your start up. I’ll tell you why I want to talk to you about this, Hiten, because you have done it again and just recently inspired me and inspired the entire team by sending out the email where you basically describe the NPS score that you’re recent online webinar, workshop got. Right?

Hiten:

Yup.

Steli:

You sent out an email about this. I just read the subject mind and my mind was already blown because I did not ever think of doing an NPS score for anything else other than our core product, which is obviously dumb, but I thought, Maybe I’m like, “Maybe I’m not the only one that hasn’t thought about this before. I shared the email with my team and literally a bunch of people now started being like, we have a bunch of guys on the success team that are like, “Well, yes we’re starting to do an NPS score for the webinars and the trainings that we give. We are publishing quite regularly ebooks, as you know and were like let’s start an NPS score for the books that we’re launching.” It just started this wildfire within . I wanted to talk to you a little bit about this. We’re probably gonna have to backtrack and lay the foundational groundwork of telling people what is an NPS and why do companies use this and how do companies use it, but then I want to talk a little bit more about other ways of using it other than just to get a sense for how people like your product and the things that you’ve learned from and then we’ll wrap this episode up. Sound good?

Hiten:

Yeah. Let me just drop the primer in it about Net Promoter Score and the starter. Net Promoter Score shortened to NPS is a customer satisfaction score that was actually created by Bain & Company. They’re a big consulting firm. It was created many, many years ago and they actually own the trademark to it. If you ever really use it on a website or something, you’re supposed to put trademark or something like that. They can’t stop you from using it or anything, so don’t worry about it. It basically helps you understand … It basically helps you basically put people into three buckets by asking them one simple question, which is to the tune of how likely are you to recommend this product or whatever you’re trying to get a score for to a friend or a college depending on how you want to word it and what your product is, you would ask it one of the two ways. Then the options are zero all the way to ten, so zero, one, two, three, four, five, six, seven, eight, nine, ten, zero being not very likely and ten being very likely. Based on that, there’s basically a scoring system where if you’re a nine or a ten, if someone puts a nine or a ten, they’re a promoter. If they put, I think it’s seven or a eight, they’re, what do they call that? A passive, meaning they’re lukewarm about it, I would say and then if they put anything lower than a seven, a zero through a six, they’re basically a detractor. The buckets are like this; a detractor is gonna actively go out of their way. This is the description, but basically a detractor’s is going to actively go out of their way to tell other people not to use your product. A passive is not going to say anything and a promoter, those are the people that go shout from the rooftops about your product because they love it so much. That’s basically how it breaks down. It helps you figure out who you have and there’s a calculation that gives you a score. What Steli was referencing was that I did a workshop a few months ago and now I’m doing my second one, but the first one had a really high NPS score. It had an NPS score of 88. Apple has an 89. Believe it or not, Tesla has a 93 or something. A really high score would be in the 60s and 70s in general, but it really depends on your industry. An 88’s pretty high. I was blown away by that score and I look forward to beating that score in the next workshop. I sent an email about it just to share with people and since I’m doing another workshop, I am promoting it and want people to join it. I thought a great way was to tell people what the NPS was last time. I think it’s really fascinating, Steli, the high level of why I love Net Promoter Score is that it’s a simple metric. There’s a calculation and you get a score. Based on that score, though, you can’t do much. You just have a score. It’s great. People love it or they don’t or you have more work to do. What’s really powerful is when you ask them a follow up question. My favorite one is, and it’s open ended is after they put the score in, whatever their score is, you ask them an open ended question and ask them, “What’s the most important reason for your score?” I studied this. I looked at all the content online about NPS and I found that to be the most valuable question. Then what you do is between detractors, passives, and promoters, you look at their various responses and you try to find the patterns and you make it better. That’s basically the bottom line. If I got a 88 on my score, it means most people were basically eight, nines, and tens. There are very few people lower than that. That’s why I got a high score. There isn’t much for me to learn around making it better except look at the eights, but there weren’t that many eights. It was only a 30 person course and even with a few people and little amount of data, you can get a score and you can understand how people feel about whatever you’re doing. We can talk about all the various ways to use it. I think it’s really interesting that your team decided to start using it for all these things you’re doing. I’m excited to talk to you about it, but that’s the couple minute primer on it.

Steli:

Yeah, that’s awesome. I think one of the other things that’s great about the NPS survey and scores is that it’s very simple to do, but also it’s so widely used that it’s actually can be a good benchmark in certain industries or verticals, right, because a lot of companies are using this. We know that a lot of companies in are definitely using this. The thing that … I’d heard you, if I’m not mistaken, I think you’ve done an NPS survey once for somebody else’s product when you were doing research about products.

Hiten:

Yeah, we were doing research and we still are, actually, in the document space. Online documents. Document creation and that whole category, Conner and I. We learned that we asked people for the score, so zero to ten as well as that open ended question on about five or six different products. I think it was five different products. Google Docs, Dropbox, Microsoft Word and a few others. We got their scores and we even did a great write up on it. That was for other people’s products.

Steli:

That’s awesome. I remember that and I thought that that was kind of creative because I’d never heard anybody do a survey about somebody else’s product. People struggle to even do an NPS on their own product let alone doing it for competitive products or other products out there to just gain knowledge and insights about the marketed space. I don’t know, man. I think that … Any context I’ve ever read about or seen a company use an NPS survey was always in the context of their core product. That’s how we use it. We do do NPS surveys quite regularly with our customer base, with our user base. For us, it’s not so much about the … We do respond to people that are filling out the survey and answering the follow up questions. We do reply to them and we look into it and we try to gain as many insights as possible, but on the pure benchmark number, the thing we’re looking for is the trend line. Are we improving quota over quota or are we not? That’s kind of like more than the total whatever the final number is more important that that is what is the trend line? Are you improving the product? Are you getting more and more people that are using the product or customers of your to be promoters of the product? That’s the context within we’ve been thinking about doing NPS surveys. Then reading you, basically using NPS as a way for you to gauge how successful was the webinar that I gave and the workshop and how valuable was it and how many of these people will tell other people to take one of my webinars? That just opened I think my mind and my team for wait a second, NPS is just a survey and we could use it for a variety of different things we’re doing. We could use it for our core product, obviously, but we could use it for our webinars as well, which we haven’t yet. We’ve never done that before. We could use this for a blog, we could use this for any type of content that we promote and we publish out there and we know that thousands of people are reading. Why not do a survey and see how many of those are real promoters and how are we trending in these different categories? I think just taking something like this survey and then thinking about it much broader is like a tool that can be used in all kinds of different circumstances is I think what really inspired me and what made our team go, “Woo, we should do all of this crazy stuff around this.”

Hiten:

Yeah, I love that. It is exactly how you improve something. At the end of any experience where you have at least 30, 40, 50, maybe 100 people that you think will respond to a survey, it’s a great thing to do. It’s not just the trending. It’s really, for me what I found valuable is the open ended responses and what you can learn from those, especially from the detractors and the passives. Your whole goal is to get more people to be promoters. That’s actually the goal. That’s how you’re gonna increase the score. It’s really important as that open ended question right after and making sure it’s very useful to you the way you ask it.

Steli:

Alright. Is there any, if somebody listens to this and is doing a little bit of research on NPS surveys, they realize that there’s, I think a bunch of really good articles on the basics to how this works, although I think you’ve done a fantastic job. I don’t think you need to know that much more about it necessarily, but then there’s also plenty of tools out there that allow you to do this for people that are just like, “How can I step into action and start doing NPS surveys?” Are there any mistakes that companies make or people make once they first use it? Have you seen people go about it the wrong way or misuse the NPS survey in some way?

Hiten:

Yeah. I think it still goes back to maybe what I’m repeating, but what’s been important to me as I’ve done it, which is if you just get the score, you only know the score. If you don’t ask the open ended question, you won’t actually learn why. Learning why they chose their answer is really, really important. Otherwise, you’re just gonna be guessing at what improvements you make. To me, it’s the open ended responses and segmenting them by the three different groups. That really is where you start really learning a ton because you’ll learn why people are essentially detractors. You’ll learn why they’re just passive and obviously you’ll learn why they’re willing to promote it because that number one most important reason that they chose the score really gets them thinking and says, “Well, this is why.” It’s not just why did you chose a score, it’s what’s the most important reason why you chose a score is what I would really aim for. To me, the biggest mistake people make is they don’t ask for that second. They don’t ask the two question survey, they ask the one question one, get a score, and they’re happy with it and then they can benchmark against Apple or whoever they want to, but really it’s about how do you improve your own product or your own content or your own whatever you’re trying to improve. You can probably even ask this at a coffee shop after someone’s experience if you can catch them as they’re going out the door and stuff like that or email them after. There’s all these other things. It’s like think of it this way. A way to gauge an experience and you don’t just want a score, you also want to know why they felt that way about the experience and then use that information to go improve. I think that’s the biggest mistake. Another one is people can go NPS crazy by asking the same people NPS too often. You kind of want to be smart about who do you ask it to and what part of the experience. Sometimes if people are in a free trial of a product, you can ask them for NPS a week in and then you can ask different people two or three weeks in. You can even ask the same person, it’s just people are gonna get kind of tired of answering the question if you keep asking the same person, same people over and over again. That’s a little bit of a smaller issue, because most people don’t do that, but if you do go NPS crazy, that type of stuff can happen. I would point that one out too. For me, one way to think about it is at certain points in the experience, whether it’s they read something, a blog post, or they’re on your email list, if you just want to know how they feel about the email list or you did a webinar and after the webinar’s complete, you want to know what people thought. These are all great points where you can ask NPS because they finished and experience. You can also ask them, like I said, one week into a trial of a product to see if they’ve got value yet and how satisfied they are, because ideally when someone uses something like a product that they’re gonna be, the plan is that they keep using it every month, like a softer product, you want to give them value as soon as possible. Asking them in those situations earlier can be helpful to help you understand what is the point when we start getting more promoters in our product and how do we go them earlier, because that would be the kind of problem you want to solve with it. I think it’s a problem solving tool. It’s a learning tool more than just a score. That’s probably the high level of where I would push people and their usage of it.

Steli:

I love it. Were gonna wrap this episode up, but I want to really highlight one thing, which is that the current work that you do, especially with your newsletter and how you pull the curtain and show people how you are building this new company and the level of transparency that you’re currently displaying in your newsletter with step by step explain to people how you do things, why you do things. I think it’s the highest value email that I’m on. We’ve had a number of episodes now recently that were totally inspired by your newsletter and by some of the tactics that you shared with the analyst. I’m getting a ton of value out of it and I really want to encourage everybody who’s listening to the podcast, it is not yet on Hiten’s newsletter. You better get on that thing as quickly as you can. It’s really the most valuable email I get every single week. Why don’t you share to people who don’t know how to get there what the URL is to get on the email list.

Hiten:

Sure. It’s called producthabits.com. You can sign up right on the home page. You’ll also get a pretty valuable ebook that I have done NPS on. I’m making it better, but it’s great. People have said it sped up their product development. The general topic is about product development, but I’ve had the list for a few years now and I send ten links every week that are for people who are interested in software businesses and just business in general. I am taking a much more focus approach around product development just because I’m finding it important for everybody. Yeah, it’s producthabits.com. I also share the podcast on it pretty often, pretty much every week as a tip of the week because you and I are always dropping great tips and knowledge bombs, as some would say. Yeah, everyone listening should definitely check it out. As Steli was saying, I love to share what I learn. It seems like a lot of people get value from it. I just sent an email just to poke people’s curiosity that I’m probably not gonna publish online called the Hiten Bomb today. It’s probably been one of my better emails. I’ve gotten many, many, many responses already on it. It was hard to share, but yeah. I’ll take the compliment from you any day, Steli. This is the second time you’ve given it to me on this one. I really appreciate it.

Steli:

Hey, I absolutely mean it. I love . I love the Hiten Bomb one. I was laughing today, because I remember I was having a conversation about this a while back. I’m super glad that you shared this with the world. Good shit. Everybody, if you enjoyed the episode, please make sure to go to iTunes or wherever you’re listening to us and give us a five star review and a rating. We’ll hear you very, very soon.

Hiten:

I want to give one shout out real quick. We don’t get paid by sponsors on this podcast or anything.

Steli:

True.

Hiten:

There’s a company that does Net Promoter Score as a tool and has a lot of content on it that I get inspired by about this topic and I was inspired. The company’s called Delighted. It’s Delighted.com, D-E-L-I-G-H-T-E-D.com. They’re not paying for this. I don’t like recommending other people’s software just in general because that’s a promotion. There are a lot of net promoter scores out there right now. They are the best, in my opinion, because that’s all they focus on. A lot of the great companies are also using that, including Slack and others. They just provide a really simple tool to do it. In fact, we don’t like using other people’s tools for simple things, so we’ve actually implemented our own NPS system at one of my companies. We got inspired by their tool and what they’ve done. Just wanted to give that shout out to those folks over there.

Steli:

Awesome. Super sweet. This does not happen often.

Hiten:

No.

Steli:

If you recommend it, I’ll check it out. Alright everybody, we’ll hear you soon.

Hiten:

Thank you.

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