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.