Net Promoter Score (NPS) is a widely used metric to assess customer satisfaction and loyalty. It’s based on a single question: “How likely are you to recommend [COMPANY] to a friend or colleague?” on a 0-to-10 scale. Scores are divided into three categories:
- Promoters (9-10): Loyal enthusiasts who will likely repurchase and recommend your product/service.
- Passives (7-8): Satisfied but indifferent customers.
- Detractors (0-6): Unhappy customers who could negatively impact your brand.
The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. However, B2B companies, with their complex decision-making processes and multiple customer contacts, require a nuanced approach to NPS calculation.
Here are three common methods and their considerations:
- Counting All Responses
This straightforward method includes every response in the NPS calculation. While seemingly simple, it might be better for B2B companies.
- Challenge: B2B purchases often involve multiple stakeholders. End-users might provide a high volume of responses, potentially skewing the score towards their perspective and underrepresenting the voice of decision-makers with greater influence over future business.
- Example: Company A receives five responses from one client (mostly end-users) with positive scores and one response from another client (a decision-maker) with a neutral score. The overall NPS might be inflated due to the high volume of positive responses from end-users, even though the decision-maker’s opinion holds more weight.
- Averaging Scores by Customer
This method addresses the issue of skewed results by averaging scores from all respondents within a single customer organization.
- Benefit: Ensures each customer contributes equally to the NPS, regardless of the responses received.
- Challenge: End-user responses might still significantly influence the average if their population is much larger than that of decision-makers or influencers. Additionally, rounding conventions for fractional averages need to be established beforehand (e.g., round 8.5 to Promoter or Passive).
- Waterfall Method
This method prioritizes the response from the most influential contact within a customer organization, typically the decision-maker.
- Process: Only one response per customer is counted towards the NPS. If the decision-maker doesn’t respond, the response from the next most important contact (often an influencer) is considered.
- Benefit: Focuses on the most critical voice for long-term business success – the decision-maker.
- Considerations: While prioritizing the decision-maker’s response is crucial, feedback from all respondents should still be reviewed to understand customer sentiment. Additionally, a pre-defined order of contact importance (decision-maker, influencer, end-user) needs to be established before launching the survey to avoid bias.
Choosing the Right Method
The best method depends on your B2B company’s specific structure and decision-making hierarchy. Here are some factors to consider:
- Decision-Making Process: How many stakeholders are typically involved in B2B purchases within your industry?
- Customer Relationships: How important is the feedback from end-users compared to decision-makers?
Regardless of the chosen method, ensure consistent application and clear documentation of your NPS calculation process.
Beyond NPS: A Holistic View of Customer Experience
While NPS is a valuable tool, it shouldn’t be the sole metric for gauging customer satisfaction in a B2B environment. A comprehensive customer experience strategy should consider additional metrics to paint a complete picture of customer sentiment across all touchpoints. These may include:
- Customer Satisfaction (CSAT): Customer satisfaction with a specific interaction or experience. CSAT surveys are typically more targeted than NPS surveys and can provide valuable insights into areas for improvement.
- Customer Effort Score (CES): Measures the ease or difficulty customers experience when interacting with your company. A high CES score indicates a smooth and effortless customer journey.
- Customer Lifetime Value (CLTV): Estimates the total revenue a customer is expected to generate over their relationship with your company. Focusing on increasing CLTV is crucial for B2B businesses.
By strategically implementing a combination of these metrics and voice-of-the-customer programs, B2B companies can leverage valuable data and insights to:
- Make informed decisions about product development, marketing strategies, and customer service initiatives.
- Identify and address customer pain points before they lead to churn.
- Build stronger, long-lasting customer relationships that drive sustainable business growth.
NPS is just one piece of the puzzle. A comprehensive customer experience strategy should consider additional metrics like Overall Satisfaction and Customer Effort Score to paint a complete picture of customer sentiment across all touchpoints. By strategically implementing voice-of-the-customer programs, B2B companies can leverage valuable data and insights to make informed decisions and build long-lasting customer relationships.