NPS’s high response rates and open-ended feedback mechanism allow customers to cut straight to the heart of their pleasure or disdain.
Working with B2B SaaS companies all over North America, I get to see all types of CX metrics and KPIs. A theme that I encounter time and again is companies who chase benchmark Net Promoter Scores and other metrics of satisfaction. In general, I admire the pursuit of improving customer success metrics, however, blindly chasing any metrics in B2B SaaS is often misguided. Here’s why:
NPS is not always associated with customer retention
I’ve seen many companies with high NPS and atrocious retention rates. It’s because usually there’s more to customer retention than user satisfaction alone. Budgets, stakeholder turnover and business changes (acquisitions, mergers, etc) make up a surprising amount of churn in many SaaS businesses. Some of the most painful churn I’ve experienced as a CS executive have been unanticipated business changes within my most ardent advocates.
NPS is a lagging metric
NPS is impacted by leading indicators such as product fit, service delivery, expectations set during sales and myriad other factors throughout the customer lifecycle. It’s impossible to move NPS without addressing the *root causes* of dissatisfaction. Much better to measure specific leading indicators to satisfaction and loyalty.
Which brings me to the key point…
NPS is a high-response engagement tool
The value in a process such as NPS is that we can quickly gather directional feedback from customers. The scores are important but the comments are the real gold mine. NPS’s high response rates and open-ended feedback mechanism allow customers to cut straight to the heart of their pleasure or disdain.
Customer Success teams and SaaS executives should spend time reviewing this feedback for insights. Once armed with root cause data for dissatisfaction, it is possible to identify leading indicators impacting NPS and the initiatives needed to measure and improve.