But how do you use NPS to drive more sales and revenue? Well, there’s no denying it can be a bit tricky – surveys and sales aren’t directly related.

Still, that doesn’t mean you can’t use NPS surveys to increase business growth. You won’t even need to scour the web to find out how to do that because – in this article – we’ll quickly show you how to score more sales using NPS.

Key Takeaways

• Customer feedback isn’t just data – it’s a sales strategy. NPS helps you identify where to invest efforts to improve retention and revenue.
• Promoters are willing to spread the word, simply give them the right incentives to turn them into your best marketers.
• Passives need a nudge. More engagement and improved experiences can turn them into committed customers.
• Detractors are a second chance, not a lost cause. A well-handled complaint can turn an unhappy customer into a loyal advocate.
• Personalization boosts conversions. Using NPS data to tailor offers, follow-ups, and customer interactions leads to higher engagement and repeat purchases.
• Happy customers spend more. A strong NPS strategy doesn’t just improve satisfaction – it directly impacts your bottom line.

Rethinking NPS: It’s Not Just a Score, It’s a Sales Strategy

Many businesses collect NPS data, but few truly understand its power. It’s often treated as simply something to track, report, and benchmark. However, NPS is one of the strongest predictors of revenue growth.

When customers give you high NPS scores, they aren’t just saying they like your brand, they’re showing buying behavior that leads to long-term profitability. Likewise, low NPS scores signal missed revenue opportunities, lost referrals, and impending churn.

To fully leverage NPS for sales growth, you need to go beyond measuring and start monetizing. It’s not about the number but what you do with it.

• What if you could turn your happiest customers into an unstoppable word-of-mouth engine?
• What if your indifferent customers became loyal advocates instead of leaving for a competitor?
• What if you could stop customer churn before it even starts?

A strong NPS strategy connects these dots and turns insights into action. 

Let’s explore exactly how to transform NPS insights into more sales, better customer relationships, and long-term business growth.

1. Use Surveys to Build Relationships

Adobe estimates that existing customers account for at least 26% of revenue – and that finding new customers costs 7x more than keeping existing clients on board. Despite this, many companies spend far more time and money on acquiring new customers than focus on retaining existing ones. Data shows that the latter is a far more effective strategy for producing a steady, predictable increase in revenue. How much of an increase? Around 67%, according to this research.

And repeat purchases from existing clients are normally based on high satisfaction with your products and services. We say “normally” because there’s an extra factor you need to focus on – customer experience.

How does NPS come into play here? Well, all the feedback you gather by means of surveys tells you precisely what your customers want. What’s more, that data can also help your customer service reps build more personalized messages when they interact with your clients, effectively showing them your brand views them as people, not just a source of income. Overall, that can help you drive growth by improving customer retention. It sets your business apart from the competition before the prospect even thinks about purchasing.

2. Anticipate Prospects’ Expectations

One smart way to make sure you’ll be able to close more deals is to customize your survey so that prospects respond with their expectations for your product rather than with general feedback. Instead of surveying your prospects along with existing customers, run a separate campaign for them. Adjust the survey template to reflect your new audience, and wait for the ratings and responses to flow in.

This way, you’ll find out what exactly a potential customer might expect from your product. With that data, you can focus on specific improvement areas and adjust your offering to the point where any barrier in the customers’ minds (of course, if they match your ideal customer profile) regarding whether or not they made the right choice with your business is destroyed.

What’s more, using customer feedback to improve your product might potentially attract the interest of your former customers. That’s not a guarantee, of course, but there’s a chance to regain the interest of previous Detractors or non-converted prospects who left your brand because they felt like you didn’t listen to their feedback.

Your customers want to deal with reps who are knowledgeable about their business needs – so your sales team needs to spend time and effort getting to know them.

Learning more about your prospects’ expectations makes it far easier for you to convert them into lucrative deals that produce long-term, recurring revenue.

3. Improve Your Value Proposition

A great value proposition can make the difference between closing or losing a deal. Unfortunately, one of the biggest mistakes businesses make is thinking that their value proposition is flawless.

One of the most common reasons deals fail is because the ones responsible for selling the product don’t understand the customer’s needs. By analyzing the feedback from existing customers, you can easily identify the features and benefits they view as most valuable. Surveys can help you refine your offering by focusing on the collected data and aligning it with sales objectives.

Instead of relying on assumptions, you can craft your value proposition around data-driven observations and user feedback to improve your odds of convincing would-be customers that they’re making the right choice.

4. Acknowledge and Reward Promoters

A strong engagement with your business can have a significant impact on boosting sales. You might wonder about the link between the two. The truth is that high NPS customers present a perfect opportunity for upselling and cross-selling. Promoters are passionate about your brand and, hence, more likely to make repeat purchases. By digging into NPS data to analyze their preferences and tailor your approach, you can introduce them to complementary products that enhance their experience and increase sales.

To extend the reach of your brand even further, consider implementing a referral program that encourages Promoters to share their positive experiences with others. Equipping them with the necessary tools to easily spread the word, such as social media sharing options, referral bonuses, or rewarding those who leave product reviews, can serve as a compelling incentive for brand advocacy. 

Maintaining their enthusiasm requires ongoing efforts, such as creating targeted marketing campaigns. Exclusive deals and personalized loyalty programs can be effective ways to show appreciation for their support and reinforce your connection. For example, consider inviting your most loyal customers to exclusive events or giving them early access to new products. Small, unexpected gestures – such as birthday discounts or personalized thank-yous – can further strengthen loyalty. 

Another way to capitalize on Promoters is through user-generated content. People trust real customer experiences far more than traditional marketing messages, so why not let your happy customers do the selling for you? Encouraging them to share testimonials, reviews, or social media posts showcasing your product can boost credibility and drive conversions. 

Regularly assessing and monitoring Promoter churn is essential to maintain a high NPS score and identify potential issues before they become liabilities. By proactively addressing these concerns – whether it’s by improving customer service or refining product offerings –  you can set the stage for long-term success.

5. Follow Up With Detractors, Engage With Passives

You could say that Detractors are lost customers, but a better way to think about them is as opportunities to right a wrong and capitalize on that. You see, not every single Detractor is someone who dislikes your product and brand at all – some of them might actually like what you offer but be very disappointed or unsatisfied with certain aspects of your business or a particular customer experience.

If you address and fix those issues, on top of also acknowledging your errors, there is a chance you might leave a strong impression on those people and turn them into customers again.

A tailored customer recovery program does exactly that by turning disappointment into a second chance for loyalty. Offering apology discounts, service credits, or free upgrades can be an effective way to regain trust. At the same time, preventing future frustrations requires a proactive approach. One of the best ways to do this is by analyzing NPS feedback trends to pinpoint recurring pain points – whether it’s slow response times, unclear pricing, or poor onboarding experiences. Once you spot these patterns, take meaningful action to address frequent complaints before they become dealbreakers.

As for Passives, it’s important to use surveys to ask them what improvements they’d like to see with your product, or what issues are preventing them from becoming fans of your brand. Passives are not exactly loyal customers, meaning they are open to other options. If you neglect them, they can easily contribute to your customer churn stats.

However, if you assign them a customer success rep and leverage customer feedback to craft personalized solutions that cater to their unique needs, you’re more likely to nurture and convert them into Promoters. If you achieve that, you’ll essentially increase your revenue in the long run since you’re boosting your retention rate.

Moreover, you can use NPS data to inform your communication strategy and draft messages that resonate with each customer segment. By constantly refining your approach, you’ll rest assured marketing and sales efforts remain impactful.

6. Tap Into Inactive Leads

From time to time, even the strongest opportunities go quiet. If you’ve accumulated a large number of leads going dark, sending an NPS survey is a great way to reconnect and kick-start the sales process once again.

Using NPS to reignite dead opportunities is simple. Instead of sending a survey to your existing customers, create a custom audience to target inactive leads (such as people who have shown an interest in your services/products at the beginning but haven’t responded or taken any action since then).

Don’t use the surveys to ask them how likely they are to recommend your brand to others. Instead, use them to ask what improvements they’d like to see before they’d be willing to start doing business with you.

The great thing about this tactic is that it gives you feedback on why the deal hasn’t progressed. Using this data, you can refine your sales pitch and better connect with each prospect, increasing the likelihood of conversion.

While not everyone will respond to your surveys, the ones that do send an important message — that they’re still interested in talking to you, even if just to provide feedback. Build on this with a compelling pitch and there’s a serious chance of that feedback turning into a lucrative deal.

NPS and Growth – the Bottom Line

Using NPS to boost customer satisfaction and loyalty is definitely going to work in your favor. However, you stand to gain much more by focusing on boosting sales with NPS too. Getting to enjoy brand loyalty and advocacy alongside a decent increase in your client base numbers sounds more than appealing, right? Not to mention you can even use Promoters to improve your brand’s visibility, saving your marketing team tons of time and effort.

Your NPS can be a sales growth engine. The question is: Are you ready to turn feedback into revenue?

In case you’re looking for NPS survey software, we’ve got you covered. Retently offers a fully integrated solution that’s extremely easy to use, works across multiple channels, and lets you set up plenty of time-saving automation scenarios. Test it out in a free trial in order to:

• boost customer lifetime value by keeping customers engaged.
• increase repeat purchases with targeted offers and experiences.
• build stronger relationships by listening, adapting, and delivering real value.

The post 6 Actionable Strategies To Drive More Sales Using Net Promoter Score appeared first on Retently CX.

Table of Contents

• Key Takeaways
• Product Reviews vs. NPS Surveys: Key Differences
• How NPS Complements the Idea of Customer Feedback in DTC
• Best Practices for Incorporating Product Reviews and NPS Surveys
• Final Thoughts: A Recap

In today’s fast-paced business environment, customer feedback has become an invaluable resource for brands striving to stay ahead of the curve. By tapping into the voice of the customer, companies can gain a deeper understanding of customer needs and craft meaningful experiences that foster loyalty. Product reviews and Net Promoter Score (NPS) surveys are commonly used to measure customer experience and collect zero-party data. 

But while customer reviews have become an integral part of the ecommerce landscape and are here to stay, NPS surveys are just making their way in the DTC industry, although extensively adopted by B2Bs. Consider this, there are 2,665 review tools available in the Shopify marketplace, as opposed to only 58 for NPS software. Quite a difference, wouldn’t you say? So, aren’t brands missing out on essential feedback data?

In this article, we’ll compare post-purchase NPS surveys and product reviews as a measure of customer satisfaction, provide ecommerce businesses with a better understanding of the strengths and limitations of these two methods, and explore whether product reviews can be an alternative or rather complementary to NPS surveys. By understanding the importance of customer feedback and the best ways to gather it, brands can improve customer experience and retention, resulting in increased business growth.

So, let’s get started.

Key Takeaways

• Goal: NPS measures customer loyalty, while product reviews assess specific products to help buyers decide.
• Feedback Type: NPS captures brand sentiment, while reviews focus on product features like quality and usability.
• Who Responds? NPS surveys any customer interaction, while reviews come from the buyers of a product.
• Data Collection: NPS feedback is private and used for internal improvements, while reviews are public and influence purchase decisions.
• Follow-Up: NPS allows proactive engagement with unhappy customers and trend analysis to enhance overall customer experience. Product reviews are trickier, requiring public responses to manage reputation.

Product Reviews vs. NPS Surveys: Key Differences

Both product reviews and NPS surveys provide valuable insights into how consumers perceive a company’s products. However, they fulfill different roles in the customer experience measurement process. These types of feedback differ in their focus, the information they provide, and the methods used to collect and analyze data. Understanding these differences and how they complement each other can help brands achieve a broader CX perspective. 

Let’s dive into their fundamental differences, shall we?

Concept

Product reviews are written evaluations of a product by customers who have purchased and used it. They generally include a  5-star rating system and a text review, providing a first-hand product experience. Users can also add product photos and videos for a complete representation.

An NPS survey is a specific type of customer satisfaction survey that measures how likely users are to recommend a product or service to their friends and colleagues. They ask clients to rate their satisfaction on a scale of 0 to 10 and provide an open-ended question for additional feedback. The results are used to calculate a score that ranges from -100 to 100, with higher scores indicating a higher level of customer satisfaction and loyalty.

Audience

Product reviews are directed toward potential customers interested in learning more about a product before making a purchase. This makes them essential for ecommerce businesses and consumer goods industries, helping consumers make informed purchasing decisions. 

NPS surveys focus on existing customers who have already purchased and used the product to measure their loyalty and satisfaction with the brand, including customer service, UI/UX, operations, etc. NPS is a versatile metric popular across various B2B and B2C industries, including SaaS, healthcare, finance, insurance, and other industries where customer satisfaction and loyalty are critical for business success. 

Timing

Product reviews are gathered after a customer purchases and engages with  the product. As to NPS, ecommerce businesses are more familiar with transactional NPS surveys sent immediately or shortly after a transaction or customer support interaction. However, NPS surveys are more comprehensive in scope and can efficiently capture the satisfaction level at each step of the customer journey.

In this context, relationship NPS surveys are also worth mentioning, which are sent at regular intervals throughout a customer’s lifecycle (such as quarterly or annually) to track changes in customer satisfaction over time. That is specifically relevant for subscription-based companies surveying their customers every six months or big-ticket-item ecommerce businesses that inquire about their experience with the product 3 months after the purchase.

Impact

Product reviews can significantly affect a company’s sales, visibility, and reputation, as potential customers often rely on them when making purchasing decisions. Reading reviews is already a must for 95% of consumers before purchasing, while 67% require a high volume of reviews to trust high ratings. 

Yet, NPS surveys impact customer experience and the ability to identify and retain its most valuable clients. They are specifically designed to measure various areas of customer satisfaction and capture actionable insights for the brand to improve. Product reviews are often more general, providing feedback on a product but not necessarily leading to specific steps for the company. 

Data Use & Accessibility

Product reviews can be used for both internal (product development) and external purposes (marketing), with the latter as a priority. Posted publicly online, they allow other consumers to make informed purchasing decisions. Online retailers, social media platforms, and review websites have made it easy for customers to find and read reviews from various sources. Additionally, the mobile revolution has enabled potential buyers to access product reviews on the go. 

Contrariwise, NPS surveys are usually employed for internal purposes, such as measuring customer loyalty, inquiring about satisfaction following specific interactions, identifying areas for improvement, and tracking changes in customer satisfaction over time. Thus, NPS surveys are mostly kept private, and only shared within the company with management and the customer experience & marketing teams for analysis.

Marketing Opportunities

The main advantage of product reviews, making them so popular for ecommerce businesses, is that they serve as a form of social proof in marketing materials. Brands showcase positive feedback on their website or social media accounts. This way, they build credibility with potential customers since they can see what others have said about the product before purchasing. Overall, incorporating product reviews into a website’s content strategy can be a great way to drive traffic, increase conversions, and boost sales. 

On the contrary, NPS survey results are not usually used for marketing purposes; however, the metric makes it simple to target Promoters and encourage them to share opinions online. Moreover, a high NPS score speaks of amazing customer experiences. Many brands display positive results on their website to show commitment to customer needs and, as a result, foster trust.

Cost-Effectiveness

Product reviews may seem more cost-effective to collect due to the availability of third-party review platforms (e.g., Google Reviews or Yelp), which do not require additional resources or costs. However, this might not be the case if brands are the ones initiating the process, meaning they would need someone in the team to collect and manually analyze data or opt for an automation tool for the purpose. In this respect, brands can collect product reviews through email campaigns sent a few days after the purchase, via platforms such as Yotpo, Okendo, and Junip, or by incentivizing customer testimonials. 

As in the case of product reviews, NPS surveys may require additional resources, such as dedicated survey software and an analyst, to run the surveys and analyze the feedback. However, being a simple, straightforward, and easy-to-implement metric, Net Promoter Score does not require extensive investments, which is essential for DTC businesses. Using a platform like Retently, ecommerce businesses can trigger post-purchase NPS surveys by various survey channels such as email, store web pop-ups, or SMS and reach customers where they are most likely to engage with the survey. 

How NPS Complements the Idea of Customer Feedback in DTC

The concept of customer feedback has always been a crucial component of successful business operations. DTC brands, in particular, have leveraged its power to build a loyal audience and create more personal connections with consumers. However, traditional methods of collecting customer feedback, such as product reviews, can’t provide a complete picture. That’s where Net Promoter Score comes in as a complementary tool. NPS offers valuable insights into customer sentiment and helps brands understand the impact of their efforts on customer loyalty. 

So, let’s explore how NPS complements the idea of customer feedback in DTC and how it can generate relevant intelligence into customer behavior, preferences, and opinions.

A Measure of Customer Loyalty

NPS surveys are intended to measure customer loyalty and provide reliable data about customers’ likelihood to recommend the business to others. Customer loyalty is a valid pointer to customer retention and repeat business, which is essential for brands depending on repeat customers for revenue. That makes the NPS survey a tool with strong predictive potential.

Based on the collected NPS scores, customers are grouped into three categories: 

• Promoters (9 to 10): Highly satisfied customers who are likely to recommend your brand to others and make repeat purchases. Naturally, you would want the number of Promoters to be as high as possible since it will indicate that your product struck a chord.
• Passives (7 to 8): While satisfied with the product to some extent, Passives may be less likely to make repeat purchases and will switch to a competitor if a better option becomes available.
• Detractors (0 to 6): These are unsatisfied customers who are likely to be disloyal and provide negative word-of-mouth recommendations.

Ecommerce companies can thus use NPS data to identify Promoters and maximize their value, nurturing customers for life. NPS surveys can also easily flag at-risk customers, so they can proactively act and retain them for longer. While product reviews focus primarily on collecting feedback for social proof, NPS is an actionable metric directed toward finding the strengths to build on and spotting the flaws to improve – all for delivering the best customer experience and fostering loyalty. 

Targeted Feedback

Product reviews represent general feedback on a product, while NPS surveys are specifically designed to provide actionable insights to improve. They can include personalized questions and follow-up actions based on the customer’s specific experience or feedback (for example, depending on what product one buys or if they are new/return customers). NPS value goes beyond the regular 0-10 rating question, hence adopting a full-funnel NPS approach is the way to go. 

Many brands find NPS valuable because it gives critical information on the entirety of the buyer’s journey from purchase to fulfillment. The questions to ask aren’t all based on product quality but are more related to the shopping and customer experience of the brand. The brand has complete control over the survey, building it in a way that would best surface the topics of interest. The customization capabilities also allow for setting up the ground for a sustainable relationship rather than a transaction-based encounter, helping to improve the company’s overall relationship with its consumers.

Easy Data Analysis

NPS surveys have a standardized format offering a consistent and reliable way to gather and interpret customer feedback. It consists of a simple question: “On a scale of 0 to 10, how likely are you to recommend our company to a friend or colleague?” which is easy to understand and respond to, making it a convenient way to collect actionable data. 

Ecommerce businesses can compare NPS scores with industry standards and contrast data between departments or across different customer segments. Hence, brands can easily visualize and benchmark performance against competitors, track the progress of specific support agents effectively, or compare results at re-order, allowing for data-driven improvements.

NPS surveys are also highly efficient in tracking customer satisfaction over time. For example, by regularly surveying subscription customers (every 6 months), brands can capture shifts in the overall sentiment toward their business. By gaining valuable insights into their customers’ evolving needs and preferences, companies can easily adapt to changes and make the necessary adjustments. DTCs can also analyze if improvement efforts are paying off, informing future decisions. Moreover, long-term tracking establishes a baseline for customer satisfaction, giving brands an accurate understanding of how well they serve consumers. This insight is key to boosting retention and driving repeat business.

Effortless Segmentation

By collecting customer feedback and categorizing them into groups, brands can gain insights into what motivates each segment and tailor products accordingly. This way, brands can provide more personalized customer experiences and improve overall satisfaction. For example, suppose you have a high NPS score among younger customers but a lower score among the senior segment. In that case, you can focus on creating products that appeal to the younger demographic while addressing any issues causing dissatisfaction among the senior buyers. Through segmentation, brands can target the right audience and make informed decisions about marketing and product development strategies.

Broader Perspective

Product reviews can be very helpful in providing detailed information about a product. However, NPS goes beyond product information to provide data on a range of other aspects of a company’s performance. Let’s go through some of these examples to see how it works.

• Inform the CX strategy – by analyzing NPS feedback, brands can understand customer needs, spot pain points, and make informed decisions about product selection, pricing, delivery policy, or UX/UI experience. Customer satisfaction levels and feedback trends are the ones to inform the CX strategy and overall business direction, allowing ecommerce companies to be competitive in a crowded industry.
• Understand the buyer’s journey – by figuring out the key touchpoints in the buyer’s journey and how customers feel about each, brands can make adjustments to improve the individual experiences. It can include providing additional self-service resources, updating the refund policy, or improving the check-out process. By acting on NPS data, you can ensure that every touchpoint is tailored to meet customer expectations, leading to increased customer loyalty.
• Impact customer relationships – a high NPS score points to an increased number of happy customers likely to repurchase. On the other hand, a low NPS score speaks of prevailing unsatisfied buyers who may choose to do business with a competitor. By using NPS surveys to understand customer sentiment, follow up with at-risk customers, and drive the necessary improvements, brands can strengthen relationships and build a loyal audience.
• Optimize marketing efforts – brands can see if campaigns resonate with their customers, drive sales, and create positive customer experiences. A high NPS score indicates that customers respond positively and are more likely to repurchase. In contrast, a low NPS score hints at a need to fine-tune marketing strategies and optimize efforts for maximum impact.

Data Cross-Referencing

NPS surveys are an effective method of measuring customer satisfaction and loyalty, but they become even more powerful when cross-referenced with other data sources. By combining NPS data with other metrics, such as CSAT and CES, demographics, purchase history/sales data, and customer service interactions, companies can gain a comprehensive understanding of their customer experience.

For example, suppose NPS data shows that customers are satisfied with a company’s products but not customer service. In that case, the brand can use cross-referenced data to uncover the issue and take steps to address it. Additionally, cross-referencing NPS with purchase history would help ecommerce businesses identify opportunities for upselling. Brands can use this information to develop targeted campaigns that increase customer engagement and boost sales.

Neutralizing Bias

Product reviews may be affected by positive or negative bias, as customers are more likely to leave a review if they are satisfied or highly disappointed with a product. Fake reviews can also get in the way and skew the overall product perception, providing an incorrect representation of customer satisfaction. In this context, NPS surveys can provide a more representative and objective view of customer satisfaction. 

The benefit of having multiple perspectives when evaluating data is that it grants a more accurate picture of customer sentiment and a more comprehensive understanding of the overall performance. When relying on one source, there is also a risk of missing important information or misinterpreting data. For example, combining data from customer surveys and product reviews allows brands to quickly identify improvement areas, whether in product design, customer service, or marketing.

Best Practices for Incorporating Product Reviews and NPS Surveys

When used in conjunction, product reviews and NPS surveys can surface relevant insights into customer satisfaction and help ecommerce businesses make informed decisions about customer experience. However, it is important to follow some best practices when combining these two feedback sources to make the most of it. Here are three main tips we would like to touch upon:

1. Throttle and Sampling

Throttling and sampling are essential considerations when harnessing product reviews and NPS surveys to gather customer feedback. Throttling controls the rate at which feedback is collected, while sampling refers to selecting a representative customer segment.

By limiting the number of daily surveys and reviews, brands can avoid overwhelming the team while still capturing enough data to drive improvements. Furthermore, throttling can make sure that the customer experience remains positive. Brands can thus prevent consumer frustrations caused by flooding survey or review requests, and keep the feedback collection process engaging.

With a representative customer sample, ecommerce companies can ensure a more accurate picture of customer experiences and drive meaningful improvements. A suitable sampling method can, as a result, increase data validity by eliminating potential biases. 

Still, throttling and sampling methods will depend on the specific goals of the company. For example, a brand that wants to gather more in-depth feedback on a particular product or stage in the buyer’s journey may need to collect feedback more frequently than a business that simply wants to gauge overall customer satisfaction every once in a while.

2. Timing

Ideally, ecommerce businesses should aim to trigger product review requests and NPS surveys at different stages in the buyer’s journey. For example, they can collect reviews after a consumer used a specific product, and send NPS surveys to inquire about the delivery process (right after the product was delivered),  the check-out process (after the order was placed), or at regular intervals to monitor overall sentiment. Additionally, it’s essential to consider the type of surveyed customer, as feedback from repeat customers may weigh more than that from new customers.

A popular scenario among ecommerce brands is sending a product review request two days after delivery and NPS surveys in 10 or 14 days. While the first aims to find out more about the quality of the product, the NPS survey looks into the overall shopping experience and satisfaction with the brand.

Incorporating product reviews and NPS surveys into a comprehensive customer feedback strategy can enable brands to gain a deeper understanding of their consumers and encourage informed decisions that drive business success. We recommend adopting a 50%-50% approach when implementing the two methods jointly, meaning send product review requests to half of your audience and NPS surveys to the rest, to avoid messaging fatigue.

3. Closing the Feedback Loop

Closing the feedback loop is critical to driving CX improvements. It involves not only collecting feedback but also analyzing it, taking action based on the data, and communicating results to customers.

One key benefit of closing the feedback loop is that it helps build trust. Consumers are more likely to feel valued and appreciated if companies actively listen to and act on their feedback. That, in turn, builds brand loyalty and increases customer satisfaction.

Additionally, closing the feedback loop surfaces areas for improvement in the customer experience. By analyzing the received feedback, companies can spot common topics, patterns, trends and use this information to make changes that will positively impact CX and, as a result, drive growth.

Another essential aspect is sharing feedback with relevant departments and stakeholders. By doing so, brands can ensure that the feedback is acted upon and improvements are effectively implemented.

Final Thoughts: A Recap

Product reviews and NPS surveys are irreplaceable tools for collecting insightful customer feedback. But while providing complementary information, they also have their unique strengths, meaning brands should consider their specific goals when deciding which method to use. 

By understanding the strengths and limitations of each type of feedback, ecommerce businesses can make the most of both to improve the overall customer experience. Combining these two sources can help DTCs gain a more well-rounded understanding of their customer’s needs and help brands target their efforts more effectively.

Take control of your customer experience! Retently provides a simple yet effective way to gather and analyze customer feedback. With its user-friendly interface and advanced analytics capabilities, you can easily measure customer satisfaction, identify areas for improvement, and track progress over time. Sign up for a free trial to see the difference it can make for your brand.

The post An In-Depth Comparison of Product Reviews and NPS Surveys appeared first on Retently CX.

Table of Contents

• Key Takeaways
• What Is NPS?
• What Is RFM?
• The Link Between NPS and RFM
• Ready to Measure Your NPS?

In a highly competitive environment, assessing the success of a DTC brand just by checking the revenue and customer lifetime value is not enough. Predicting customer behavior and future growth is essential, and multiple methodologies are available to achieve this.

RFM and NPS are widely used in ecommerce for these purposes. RFM stands for Recency, Frequency, and Monetary value and is an efficient analysis model that allows brands to gauge and identify high-value customers for further targeting. Analysis of purchase frequency and timing provides a clear picture of buyers’ future actions, allowing the calculation of future revenue.

Yet, while observation is arguably the most straightforward approach to forecasting customer behavior, it still requires significant effort. For a quicker result, NPS will do the job as it assesses customer attitude and loyalty to the brand. As a result, the higher the score, the higher the likelihood of future purchases.

While different in their approach, NPS and RFM are important metrics that help ecommerce businesses better understand their customers and drive growth. In this article, we’ll explore the workings of these models, find out whether there’s any link between them, and how brands can leverage them to gain insights into customer behavior and experience.

Key Takeaways

• RFM analysis helps segment customers based on their behavior, while NPS reveals their loyalty and likelihood to recommend. Together, they give a holistic view of customer value and satisfaction.
• Combining RFM segments with NPS feedback enables highly personalized retention, upselling, and cross-selling strategies tailored to customer needs and preferences.
• By identifying at-risk customers through low RFM scores and negative NPS feedback, businesses can take timely actions to prevent churn and improve customer retention.
• NPS feedback provides qualitative insights that, when paired with RFM data, allow businesses to improve customer experience for specific high-value segments.
• Integrating RFM and NPS into ecommerce growth strategies helps prioritize efforts on high-value customers and maximize ROI, leading to sustainable growth.

What Is NPS?

NPS, or Net Promoter Score, is a popular metric that serves as a measure of customer satisfaction, loyalty, and advocacy. A simple question, “On a scale of 0-10, how likely are you to recommend our company to a friend or colleague” is used to assess the success of a business and the loyalty of its customers. 

Respondents are grouped into three categories based on their answers. Customers who rate 9 or 10 are the Promoters, as they genuinely love your product. Passives choose between 7 and 8, and while they may keep buying, they will quickly turn to a competitor. Anyone giving a score of 6 or lower is considered a Detractor – a dissatisfied customer who will likely purchase again only if you take appropriate steps. 

Your NPS score is the difference in percentage between Promoters and Detractors. For example, if 55% of our customers are Promoters, and 15% are Detractors, your NPS is 55%-15%=40%. It’s worth mentioning that companies with high NPS show higher growth rates, which is natural since satisfied customers are willing to recommend the business to others. That translates into increased sales, positive word-of-mouth, and a strong brand reputation. 

The rating is followed up by open-ended questions that provide more details on the reasons for customer satisfaction or dissatisfaction. The captured feedback helps concentrate efforts on the most relevant business areas, identify any difficulties customers may face, and single out customers who will gladly promote the brand or never purchase again.  

Another important consideration is that NPS facilitates customer segmentation, which, in turn, simplifies marketing efforts by providing clarity on the specific follow-up required for each group. Promoters are the right customers for cross-selling, upselling, and referral programs. Passives need further encouragement and will be happy with discounts and additional offers to keep them engaged. Winning Detractors will require more work, but solving their concerns will allow reaping benefits later.

The NPS concept is based on customer self-assessment, which leaves out biases and assumptions while giving relevant and actionable feedback for ecommerce businesses willing to improve customer experience and reduce churn.

What Is RFM?

RFM (Recency-Frequency-Monetary) is a customer segmentation model used to identify and target high-value customers. The RFM concept differs from NPS as it relies on the data gathered by marketers and salespeople, yet, it is another way to measure customer value.

Understanding the Key Factors

As the name implies, the RFM model relies on three key factors:

• Recency: When did the last purchase occur? Customers who have made a more recent purchase are more likely to return than those who have not purchased in a long time.
• Frequency: How often does a customer purchase? Customers who make frequent purchases are more likely to be loyal and purchase more.
• Monetary value: How much money did your brand earn from a customer? Those who spend more on their purchases will likely be more valuable.

The RFM model assigns a score to each customer by analyzing these factors. The scores segment buyers into groups, including high-value, loyal customers and those targeted for improvement.

How to calculate RFM?

When doing the RFM analysis, you will naturally want a list of customers who buy frequently and spend the most. Just like in the case of NPS, there is a way to calculate the RFM value of every customer. Usually, marketers use a 1-5 (the standard) or 1-10 scale and assign scores based on every parameter, with a year as a timeframe. A 1-10 scale allows for more granularity but can also increase the complexity of the RFM analysis.

Let’s start with Recency. Depending on the specifics of your business and buyer’s journey, you must decide on the time frames, and score ranges to best suit your needs. For example, if you sell clothes and people generally buy anything new every two months, you will give 10 to any customer who purchased during that period. Then keep decreasing the number, giving a 9 to those who bought anything during the last three months, etc. You can continue this pattern for each time frame until you reach a minimum score for customers who have not purchased in a long time.

The same goes for Frequency, which is based on the number of customer purchases over a certain period. In this respect, a customer who makes six purchases a year will receive a higher score than those who purchased once. 

As for the Monetary value, 10 goes to those who spend the most. It can be a straightforward calculation considering the total spend in a given period. It may also take into account other factors, such as the average order value or the customer’s lifetime value.

To combine the three scores for Recency, Frequency, and Monetary value into a single RFM score, you can use different methods depending on your brand’s specific needs and goals. There is no one-size-fits-all approach to this. 

To calculate the RFM score, brands can combine the assigned value to each of the three factors.

Now, if you have given a customer 8 on Recency, 5 on Frequency, and 5 on Monetary, the three-digit score is 855. 

Another method is averaging the three scores. Based on our example, this would result in: (8+5+5)/3=6. Naturally, customers with higher scores are considered more valuable. These are the most common approaches used.  

Depending on the nature of your business, Frequency may be insignificant, and you may want to decrease its influence on the final score. In this case, you may use a different scoring scale to measure it, but you must adjust the formula accordingly. 

Hence, another standard method is to assign weights to each of the three scores based on their importance and add them up.

For instance, if Recency is deemed more critical than Frequency and Monetary value, you could assign a weight of 60% to Recency, 30% to Frequency, and 10% to Monetary value. Then, you would multiply each score by its corresponding weight, add up the results, and get a final weighted RFM score.

Analyzing the same example, we would get:

RFM score = (8 x 0.6) + (5 x 0.3) + (5 x 0.1)

RFM score = 6,8

Regardless of the favored method, make sure to apply it consistently across your customer base.

Benefits of the RFM model

Analyzing RFM data has multiple benefits that extend beyond its ability to segment customers and improve marketing efforts. It provides valuable insights into customer behavior that can inform various business decisions.

Just like NPS, it allows projecting future revenue by identifying the expenditures of existing and new customers. This information can guide marketing strategies and improve customer retention efforts. 

RFM analysis can provide ecommerce businesses with insights into the most popular products among their customers. By expanding their product offering in that category, they can improve satisfaction levels and prompt positive word-of-mouth. By identifying the most frequent customers and their purchase patterns, brands can also better anticipate demand and adjust their stock accordingly. This way, they can minimize the risk of product shortage.

In addition, RFM can spot opportunities for cross-selling and upselling. Based on the purchasing behavior, companies can single out products frequently purchased together and use this information to offer targeted recommendations to active customers.

It also allows brands to pinpoint the most valuable customers: those making the most frequent and high-value purchases. Ecommerce businesses can use this information to allocate resources more effectively and make strategic decisions that increase customer lifetime value and revenue. Proper data analysis also helps identify patterns in customer behavior to fine-tune existing offers and predict your clients’ needs.  

The Link Between NPS and RFM

Are the two approaches really that different, or do they actually share a common thread in the data they provide? 

When it comes to the RFM model, it is natural to think that Frequency is the most important characteristic here: you can predict customer behavior just by looking at this data. However, it turns out that Recency is a more reliable metric as it best predicts the likelihood of future purchases. The reasoning is simple: if the transaction was recent, customers have that specific brand in mind and will likely return for new purchases. Clients who haven’t purchased anything for months are less likely to buy again unless targeted by costly marketing campaigns. 

As for Frequency, depending on what you sell, it may be a minor characteristic: people buy groceries daily and purchase laptops once in a couple of years. The same is true for the Monetary part: if a client buys an expensive item and never returns, their monetary value may be higher than that of a regular customer who buys frequently but spends less in the same timeframe. That’s why Recency is the most critical parameter, though all three should be taken into account to get a reliable data set.

Recency is important in NPS as well. Usually, the survey is sent immediately or shortly after the transaction to get the most relevant and actionable feedback. It’s when customers are “fresh” and more willing to share comments and suggestions. Consequently, the more you wait to send the survey, the less accurate information you will receive. In addition, you may not get any feedback at all, instead confusing customers with your survey if the interaction happened ages ago. 

Anyway, it doesn’t mean you’ll get high NPS scores if you send the survey immediately since many factors influence it, including the quality of your product, delivery, packaging, website experience, and even the customer’s current mood. Still, many companies notice that the NPS decreases when they survey customers who last interacted with them long ago and return to normal after a new transaction.

Of course, given the broad use of NPS, there is an exception to it to consider, which is relevant for subscription-based companies who measure their customer satisfaction on a regular base, let’s say every 6 months. That might also be the case for big-ticket-item ecommerce brands that can inquire about their experience with the product 3 months after the purchase.

Basically, Recency is the parameter that should be considered when using both NPS and RFM models to predict customer behavior, improve their experience, and increase future revenues. 

Advantages of a combined NPS-RFM approach in ecommerce

While RFM and NPS are generally used separately, they can provide complementary insights, offering brands a more comprehensive view of their customers. RFM looks into customer behavior based on past purchases, while NPS measures customer satisfaction and loyalty.

Yet, even if Recency in the RFM model is the best predictor of future behavior, it still can’t be taken for granted. To better understand customers, compare the list of people with the highest scores for both RFM and NPS: if the names match, those clients will surely return.

Cross-referencing the results is another way to use both models to your benefit. After you spot the recent customers, checking their NPS survey results and analyzing the feedback is more than recommended. This way, you can predict their behavior and solve any issues they may encounter in good time to ensure they return for future purchases. 

The same procedure is relevant for NPS: identify your Promoters and check their Recency score. If they didn’t get a 10 (in case you use a 10-point scale for the RFM analysis), it is time to remind them about your existence and encourage them to visit your website.  RFM analysis can help reveal which products they may be interested in for future purchases.

Here are a few more examples of why your brand needs to use RFM and NPS analysis together:

1. Efficiently segment customers

RFM segments buyers based on purchase behavior and engagement level, while NPS seeks to understand each group’s customer satisfaction. For example, customers with high RFM and NPS scores can be classified as loyal advocates. These clients are frequent spenders and vocal advocates for the brand, making them valuable assets for word-of-mouth marketing. Identifying high-value customers can bring many benefits, including effective resource allocation and increased revenue. 

2. Build targeted marketing and leverage personalization

By segmenting customers based on their RFM score and NPS rating, ecommerce companies can develop targeted marketing campaigns, personalized product recommendations, and effective customer service strategies. Analyze the data to determine which groups are most likely to respond to specific offers, tailor marketing efforts to each customer segment and address any pain points to improve conversion rates. For example, a brand can use RFM analysis to find customers most likely to purchase a new product and then use NPS data to craft a marketing campaign that speaks directly to their needs.

3. Enable campaign analysis

While RFM can pin the most valuable customers, NPS can assess the impact of a marketing campaign on these customers. In this context, a high NPS score indicates that the campaign resonates with the target audience. The same is valid for loyalty programs. 

4. Improve customer experience

By blending RFM scores and NPS feedback, brands can learn why customers are satisfied or dissatisfied with their experience. For example, if you spot Detractors in high-value customer segments, take steps to address their concerns, improve overall satisfaction, and drive positive word-of-mouth. This way,  ecommerce businesses can develop products that better meet their needs, while positive word-of-mouth will fuel long-term growth.

5. Increase customer loyalty

While RFM scores can provide insight into the Frequency and Monetary value of customer purchases, they do not directly measure customer satisfaction or loyalty. Yet, NPS singles out the drivers of customer loyalty. By combining these two metrics, brands can determine RFM segments with the highest NPS scores and focus on strategies to improve loyalty within those segments (e.g., reward customers for their loyalty with exclusive offers). By taking steps to retain these high-value customers, you can build long-term relationships and increase the likelihood of repeat purchases.

6. Reduce churn

Via RFM and NPS analysis, brands can determine at-risk customers and engage them with retention campaigns. For example, customers with low RFM and NPS scores are, without a doubt, heading to the front door and requiring special attention. These customers have not made recent purchases, spent little money in the past, and are unlikely to recommend the company to others. Brands can proactively take immediate measures to retain them before it’s too late by addressing their pain points and using targeted offers.

Managing the joint challenges of RFM and NPS

Besides the clear connection between NPS and RFM, there are potential data conflicts to it. Obviously, the two metrics may not always align. A customer who makes frequent purchases may have a high RFM score yet still not be satisfied with specific aspects (like customer support or the ordering process), experiencing a low NPS score. At the same time, a very satisfied customer may still rarely purchase,  having a lower RFM score.

Therefore, relying too much on either has its drawbacks. As a brand, you may focus solely on a high RFM score and disconsider NPS, losing customers in the long run. Also, reaching a high NPS score, you may be prone to neglect high-value clients, failing to seize opportunities to boost revenue.

Yet, we’ve got you covered with some tips to follow for the best possible outcome:

• Prioritize CX – RFM analysis can indeed identify valuable buyers but don’t ignore the role of customer satisfaction. Only by adopting a customer-centric approach and using NPS feedback to improve their experience can ecommerce businesses nurture long-term success.
• Look for patterns –  As such, patterns offer invaluable insights into customer behavior and preferences, hence when analyzing RFM and NPS data, seek them out. For example, if Detractors are more likely to be low-value customers, this could hint at product value issues or price sensitivity. Make sure you’re not looking at isolated data points but taking a holistic view of how customers interact with your brand. 
• Inform decisions –  Remove the guesswork and use data to back up decisions. Create a more comprehensive customer profile by cross-referencing RFM and NPS data with other sources such as demographic data, customer service interactions, and social media comments. Ensure that customer data is collected consistently across all touchpoints.
• Treat it as an ongoing process – Customer behavior and preferences are not static, so it’s essential for brands to regularly review data and adjust the RFM and NPS strategies to match their goals. Keep track of key performance indicators and use them to inform decision-making.
• Leverage automation – RFM and NPS data analysis can be challenging and time-consuming, especially if done manually. And while for smaller shops, a manual approach might still work, things will get complicated as they scale their business and larger data sets pour in. Specialized tools can streamline the process and reduce data errors, empowering brands to respond more effectively to ever-changing customer needs.

Ready to Measure Your NPS?

Running a successful ecommerce business isn’t as easy as it sounds, right? Between attracting new customers, keeping the ones you have, and staying ahead of competitors, the challenges can feel endless. One big hurdle? Understanding your customers well enough to keep them coming back for more.

Here’s the thing: growth means more than getting more traffic to your site or running flashy marketing campaigns. Real, sustainable growth comes from knowing your customers inside out – what they want, how they shop, and why they stick around (or leave). And that’s where the role of customer insights kicks in.

Although both RFM and NPS center on customer behavior, they approach it differently. RFM focuses on the transactional history, analyzing how recently and frequently a customer has made purchases and how much money they spent. NPS dwells on customer attitude towards the brand, measuring the likelihood of recommending it to others.

Yet, when used jointly, RFM and NPS give ecommerce businesses a more nuanced understanding of their customers. A good grasp of purchase behavior and satisfaction with the brand facilitates informed decision-making, tailored experiences, and improved customer relationships.

Here at Retently, we specialize in NPS surveys: the templates are tailored to match brands’ needs, the computations are done automatically, and the advanced reports help interpret data and detect feedback patterns. In addition, we offer native integrations with your store, email & SMS marketing, customer support, call center, and CDP platforms. Try it out for 14 days to get a new perspective on customer needs and identify new growth opportunities.

The post The Link Between RFM & NPS in Ecommerce Growth appeared first on Retently CX.

Table of Contents

• Key Takeaways
• What Is Product-Market Fit?
• Why Is Product-Market Fit so Important?
• How to Achieve Product-Market Fit
• How to Measure Product-Market Fit
• Is Finding Product-Market Fit Enough for Success?
• Find Out if You’ve Achieved Product-Market Fit

Achieving the much-desirable product-market fit is the ultimate goal of any SaaS business. After all, it means that a company has identified its business niche, has found a profitable market, and has a product that is well-liked by customers – the true Promoters. They don’t have to worry about going bust because what they sell is what the market needs.

Product-market fit (PMF) doesn’t happen overnight. It requires thorough research, analysis, planning, and time. And, as it was duly noted, if you have to ask yourself whether you achieved it, it’s most likely that you haven’t.

Before attempting to measure it, let’s first try to define what product-market fit is.

Key Takeaways

• Achieving product-market fit means your product resonates deeply with your target audience, leading to higher retention, customer satisfaction, and a foundation for scalable growth.
• The classic PMF survey question – “How would you feel if you could no longer use this product?” – is a powerful tool to measure customer dependency and uncover areas for improvement.
• If at least 40% of respondents say they would be “very disappointed” without your product, it’s a strong indicator that you’ve achieved product-market fit.
• PMF surveys go beyond the numbers – qualitative insights from open-ended questions help identify what users love, what’s missing, and what to fix to better meet their needs.
• Conduct PMF surveys at the right stage of your product lifecycle and ensure thoughtful survey design, targeting the right user segments to maximize the quality of insights.

What Is Product-Market Fit?

The term product-market fit is relatively recent, being coined by Marc Andreessen in 2007 in his guide for startups, “The only thing that matters”. The best definition was given by Marc Andreessen himself: 

Product-market fit means being in a good market with a product that can satisfy that market. 

In other words, to be successful, a business has to find a suitable market, define its needs and fulfill them with its products or services. 

The market is the crucial factor here, though many would argue that a business starts with an idea, not with identifying a target audience. Actually, 35% of startups list “no market” as one of the top reasons for failure.  Even if you have a great product, it doesn’t matter if no one needs it. 

However, there may be a need in the market that the target audience is not yet aware of. But that’s until you demonstrate how your solution can benefit them. This way, you not only create a demand for your offering, but you are also directly addressing a previously unacknowledged need within your market niche.

Andreessen argues that it is easy to define whether a business achieved product-market fit. When the product is sold in large quantities, word-of-mouth works better than paid advertising, and when you can finally concentrate on growth instead of development, you know you’ve nailed it.

PMF behind the scenes

Let’s break it down with some examples:

• Slack: When Slack launched, it wasn’t just another communication tool. It nailed PMF by solving a real problem – making team communication faster, more organized, and dare we say, fun. Businesses flocked to it, and Slack grew into one of the most popular collaboration tools in the world.
• Airbnb: Airbnb’s early days were rough, but once they figured out how to connect travelers with affordable, unique stays while also helping hosts earn extra income, it was game over. They hit PMF, and the rest is history.
• Netflix: Remember when Netflix shifted from DVD rentals to streaming? They saw where the market was headed and built a product that perfectly matched customers’ desires for convenience and on-demand entertainment. The result? Industry leadership.

When you achieve PMF, your product doesn’t just fit into the market – it owns a space in your customers’ lives. That’s why PMF is so critical, especially for startups. It’s not just about having a great idea; it’s about creating something your audience truly values.

Why Is Product-Market Fit so Important?

Well, there are reasons beyond just steady high profits that come with achieving it.

The main advantage of adhering to the product-market fit strategy is that when building a product, the market for it is already there. Starting a business and knowing that an audience is ready to buy your product considerably eases sales and marketing efforts. Once achieved, it allows you to concentrate on growth and scale up operations. Without product-market fit, attempting to scale the business too early can lead to failure and wasted resources.

Product-market fit also allows companies to focus on the most promising market opportunities. When one has found the right market, it can devote its efforts to expanding in that market and developing new products that will appeal to the same audience. 

Another reason why product-market fit is essential is that it helps to create a loyal customer base. When a product meets the target market’s needs, customers are likelier to become advocates for the product. That can increase brand awareness, which is vital for the long-term success of any business.

Last but not least, product-market fit helps understand customers better. Even if your product gets enthusiastic reviews from customers and niche media, it doesn’t mean that you are there yet. This happened to the Daily app launched by Buffer. Everyone seemed to love it, but it took the team some time to realize that people simply didn’t use it after the initial stage. 

By analyzing the market consistently and gathering customer feedback, a company can stay informed about the needs of its target market and create a product that addresses those evolving needs in the long run. 

Moreover, systematic market analysis and research will help identify whether the product still solves the problem and whether the market still needs it.  

In short, PMF allows prioritizing tasks and concentrating efforts on the most critical aspects of your business at a specific stage of product development. 

How to Achieve Product-Market Fit

While finding product-market fit isn’t easy, there are some actionable steps businesses should take at the early stages. Dan Olsen, the author of The Lean Product Playbook, developed these as a guide to achieving product-market fit. These steps focus on the audience and the product itself.

1. Define the target audience

The first step any business should take is defining its target audience. Start with creating the so-called persona, a perfect customer. Analyze their background, who they are, what they do, and what their typical work day looks like. Understand their interests and everyday struggles, and when you do, you can see whether your product is relevant. 

2. Identify your audience’s needs

The next thing to do is identify the needs of your target audience, but not any needs. You have to find the pain points that existing options can’t adequately solve. Even if you created a great product, look at it from a customer’s perspective and try to understand whether it will deliver added value.

Analyzing competitors is crucial as it is most likely that your potential customers are now using their products/services to solve their issues. 

3. Test your value proposition

Your value proposition is the benefits of your product and how it will solve your audience’s existing pain points. Make a list of features your product has and compare it to your competitors to determine whether you can outperform them. Identify unique ideas or improvements to differentiate yourself and offer a better solution.  

4. Create a minimum viable product

A minimum viable product is the initial version of your product. It should have enough features for your customers to try and provide feedback on – used for further development. It’s the best way to find out whether customers will benefit from your product, and the cheapest – as there will be no need to invest big money in the project. 

First, outline the minimum number of features that will satisfy your customers’ needs and create a prototype. It will most likely have bugs, but don’t let this stop you. Send this prototype to your target audience and ask for feedback. Collect and analyze the customer data, check whether they encountered similar issues, and use it to improve your end product.  

5. Product-market fit pyramid

To structure the steps for achieving PMF, Dan Olsen came up with a 5-layer pyramid. He put the audience and its needs into the lower two levels and the product itself – into the top three layers. 

The target customer is the foundation of the pyramid: this is the market you will sell your product to. It is followed by the needs your product should solve. Businesses can only analyze and research these two layers, as they do not have control over them.

The product comes next, featuring a value proposition that addresses customer needs and includes the necessary features; followed by the user experience where customers test/use your product. 

It should be noted that if you skip any layer or don’t pay proper attention to all of them, the pyramid will collapse, and the desired product-market fit won’t be achieved. 

Hence, before jumping into product development, it’s important to first identify and answer the key questions about the target market, customer needs, and potential demand for the product. By understanding these factors, you can make sure that you are building and launching a product that truly meets customer expectations and has a viable market.

How to Measure Product-Market Fit

There are many metrics you should consider as, in many cases, you will be measuring satisfaction and engagement levels. You should look into churn rates and changes in the CLV (Customer Lifetime Value), but sending surveys is the quickest and easiest way available to any business. So far, the Product Market Fit, or PMF survey designed by Sean Ellis, serves the purpose best. So, what is a product-market fit survey?

1. PMF survey example  

While customer satisfaction surveys give you an idea about the customer’s attitude towards your product, it doesn’t really help with identifying how necessary that product is. Sean Ellis, an entrepreneur and investor, came up with a simple question to assess this need – which makes up the core of the product/market fit survey template.

It features the question: “How would you feel if you could no longer use our product?”. Respondents must choose from several alternatives: Very disappointed – Somewhat disappointed – Not disappointed (it really isn’t that useful) – N/A as I don’t use it anymore.

The PMF score is calculated by dividing the % of Promoters – customers who responded with “very disappointed” – by the total number of responses. Hence, if you have 40 Promoter responses and a total of 60 responses, your PMF score will be 60% (PMF score= 40 “very disappointed” responses/60 total responses * 100).

Ellis argues that if at least 40% of respondents would be very disappointed, then a company achieved product-market fit. Another requisite is sending the survey to customers who have used your product for some time and fully understand its features. And, it turns out that there is no need for big numbers to get to a result: in many cases, 40-50 responses are enough to get an idea about the need for a product. 

2. Open-ended Product-Market Fit survey questions

As in the case of customer satisfaction surveys, by itself, this question alone isn’t enough. You can always follow up with open-ended questions allowing respondents to expand on the details behind their answers. In case they wouldn’t be disappointed, you could ask them whether it is because they found a better alternative (and which alternative) or they simply don’t need your product. 

Still, there are three essential follow-up questions that must be addressed to get more relevant and actionable feedback, to be further used in development and growth strategies.  

As one of the product-market fit conditions is finding the right target audience, why not ask your customers about it? They have used your product for some time and could give you additional insights and show you the right direction. Ask them what type of people would benefit most from using your service/product and create a persona based on the responses. Describe their job, everyday life, and duties, their potential problems and expectations – this will be your perfect customer – and build your product for them. Though it may seem that this approach narrows your audience too much, in practice, it is not. 

It is now time to understand the strengths of your product. Ask your customers about the main benefit they get: speed, easy navigation, reliability, or customization options. Concentrate half of your efforts and time on improving that specific feature.

As customers know their needs better, ask them how you can improve your product. You will most likely receive multiple suggestions, but, you should carefully analyze them to ensure they suit your target audience. Instead of jumping into the creative fever and adding as many features as possible, narrow down the suggestions and choose the most relevant ones. This is where you should concentrate the other half of your efforts. 

Rahul Vohra used this approach to help his company Superhuman reach product-market fit. He sent his clients a short survey that included the question from Sean Ellis and these three additional questions to gain new insights into the perfect customer and the features they value most. 

By segmenting and analyzing responses, he improved the already existing beneficial features and created a product roadmap that included some of the most relevant customer suggestions. He then split the suggestions further into different categories depending on the cost and impact and concentrated his efforts on high-impact/low-cost options. 

But the most important thing Rahul Vohra did was proper segmentation of customers. Instead of trying to understand why customers wouldn’t be disappointed if they could no longer use Superhuman, he analyzed the responses and suggestions of the other two groups and split them further based on the created persona. This exercise helped him get a better understanding of the product-market fit score and customer needs and concentrate his efforts on truly relevant features. Considering that their score went from 22% to 58% in three quarters, the approach works. 

Is Finding Product-Market Fit Enough for Success?

Though the idea behind product-market fit seems easy to understand, not everyone is convinced: some entrepreneurs find faults in the system. Rand Fishkin, the founder of Sparktoro, is concerned that people who blindly follow the concept commit errors on their way.

For instance, he argues that switching from developing a product to scaling the business isn’t the best move as the product should keep evolving to correspond to customers’ demands. In addition, startups refuse to consider other aspects of making the product appealing, like pricing.

Another problem is that companies don’t optimize their marketing efforts before and after product-market fit and fail to build a client base. In search of investments, they work hard to achieve product-market fit, forgetting about other aspects. 

Another concern is that there is no reliable way of finding whether product-market fit has been achieved, thus meaning that the consequent actions based on ‘feeling’ may harm a startup instead of helping it to prosper. 

Fishkin suggests simultaneously working on product development and its promotion. If a startup has a small loyal client base, it is a good idea to search for similar customers, adjusting the product to suit their current and future needs. His idea is to split the customer base by size, brand awareness, and conversion and analyze it further to make the right decisions about when to develop the product and when and to whom to promote it. 

Find Out if You’ve Achieved Product-Market Fit

Having the correct product available in the right market at the appropriate time is the essence of product-market fit. Though achieving it requires considering many factors, measuring it is simpler by analyzing customer behavior and running customer surveys. Only by understanding your users will you be able to optimize your product to turn it into a must-have, as well as adjust your marketing efforts for a better reach-out. 

Actively engage with customers from the initial stages of developing a product idea. By gaining a clear perception of their needs and wants, you can create a value proposition that leverages the company’s unique strengths to create a meaningful competitive advantage. 

PMF and NPS surveys are the most suitable engagement methods, as they clearly show customers’ attitudes toward your product or service. Retently offers the possibility to send these types of surveys by customizing templates, including the questions, and integrating with many online services like Salesforce, Zapier, Slack, Hubspot, etc. In addition, when signing up for an account with Retently, you will get a 7-day trial to make sure it meets your requirements before committing.  

The post A Guide to Measuring Product-Market Fit with PMF Surveys appeared first on Retently CX.

Satisfied customers translate into growth through word of mouth. They mean that your product or service delivers significant, measurable benefits. They prove that your business is capable of growing into an even larger, more profitable operation than it currently is.

Just like measuring and monitoring your personal health is an ongoing process, keeping track of the health of your business isn’t something you can do once and then forget about. Instead, it’s also a long-term commitment and an ongoing process that, when done correctly, yields lasting rewards.

How aware are you of your business health? Do you have up-to-date insights into your customers’ perception of your product or service? Or are you relying on outdated statistics from months or even years ago?

Below, we’ve explained why measuring customer satisfaction is a long-term process, and how you can leverage Retently and Net Promoter Score® to get an accurate gauge not just of how customers feel about your product but how their thoughts, feelings and feedback change over time.

Let’s explore how shifting your mindset can transform your approach to customer feedback – and your business.

Key Takeaways

• NPS is a journey, not a destination. Treating NPS as an ongoing process rather than a one-time metric unlocks its true potential to drive customer loyalty and business growth.
• Regular NPS tracking ensures your business stays aligned with evolving customer expectations, giving you a competitive edge.
• Continuous NPS tracking helps you spot emerging patterns, enabling proactive adjustments before issues escalate.
• Small, consistent changes based on NPS feedback compound over time, driving meaningful and sustained progress.
• Automation tools enable you to efficiently collect, analyze, and act on NPS feedback, helping you scale your efforts as your business grows.

NPS Beyond the Metric

Let’s be honest – when you first hear about NPS, it’s tempting to focus only on the score. After all, who doesn’t want to brag about a high NPS? But here’s the thing: NPS is much more than a vanity metric. At its core, it’s a feedback loop – a dynamic conversation between you and your customers.

Think of NPS as a signal, not the final answer. When customers rate their likelihood of recommending your business, they’re giving you valuable clues about what’s working and what’s not. Their score is just the starting point. The real gold lies in their comments and the trends behind those numbers. Are Detractors frustrated with your support? Do Promoters rave about your product’s ease of use? Understanding this context is where NPS becomes powerful.

Let’s dig in.

As Your Customers Grow, Their Needs Change

In B2B, customers rarely remain constant. Companies grow over time, and if they use your product or service as a core part of their business, their needs are also likely to change with time.

That is particularly common for the technology industry, where growth can happen overnight, and a company that had 1,000 customers last week can have 5,000 the next.

Staying up-to-date is also important because products can quickly become obsolete. A product that looks and feels new at one point in time may lose its appeal within a few years, especially if it’s in a fast-growing market segment with rapidly developing needs.

Your customers will inevitably change. The speed of change depends primarily on your industry – in tech, it’s fast; in others, slow. Since your customers will grow and their needs will progress, it’s important that you stay aware of their thoughts and feedback over time.

By treating NPS as a one-time survey, you miss out on the opportunity to capture the evolving nature of customer sentiment – a wealth of data that enables you to make informed decisions about your products and the overall customer experience.

Embracing NPS as an ongoing process and measuring customer satisfaction on a consistent basis lets you stay up-to-date with exactly how your customers feel at any given moment. Instead of using data points from months ago to keep track of customer needs and sentiment, you can access current data exactly when you need it the most.

This data allows you to identify emerging needs and trends before they reach the point at which your business could be affected. Rather than reacting to a shifting industry too late, you’ll stay ahead of the curve and deliver what your customers need before it becomes mission-critical.

Moreover, a proactive approach to customer satisfaction, fueled by an ongoing NPS process, will help you foster long-term customer loyalty and leverage advocacy marketing.

As Your Company Grows, Your Product (and Service) Changes

Not only will your customers grow over time – if your business is a success and your customer base expands over time, your ability to deliver your product will also change. Your marketing and service approach will likely evolve with it as you adapt to the new scale of your business.

That could result in your business’s customer experience and satisfaction improving. It could also have the exact opposite effect and lead to more dissatisfied customers. Without recording your customers’ thoughts and feedback on a regular basis, it’s impossible to predict the outcome.

Every business needs to make compromises as it grows. When these compromises affect your ability to deliver the right product or service to your customers, it’s essential to be aware of their response.

Measuring customer satisfaction with NPS on an ongoing, long-term basis lets you identify areas where you’re falling short due to growth and scale. If these weaknesses frustrate or annoy customers, you can quickly act on their feedback and implement new processes to win them back.

Ignore customer feedback as your business grows and you could find yourself replacing one set of customers with another. Measure, track and respond to feedback, and you’ll develop your existing base of satisfied, loyal customers.

What’s more, a dynamic NPS process doesn’t just help you retain customers – it also opens the door to new revenue opportunities. Promoters, for example, are more than just satisfied customers; they’re advocates who are likely to purchase more and refer others to your business. Identifying these Promoters through NPS allows you to nurture them with targeted upselling and cross-selling campaigns.

On the flip side, addressing the concerns of Detractors can turn them into loyal customers who might have otherwise left. Imagine a customer who gives a low score due to confusion about your pricing. By reaching out, clarifying their concerns, and offering a tailored solution, you could transform their experience – and secure additional revenue in the process.

As Your Market Matures, New Competitors Increase the Stakes

The more competitive your marketing becomes, the more critical customer feedback is for staying one step ahead of your competitors.

It’s easy to be the best product in a small market with no competition. It’s far harder to be the best in your niche when you have 10, 20, or 30 competitors, all working hard to poach as many of your customers as possible.

In industries with a low barrier to entry, all it takes is a single better offering from a competitor to disrupt your business and start losing customers.

That is particularly troubling if you offer a product with low customer investment. If it’s easy for customers to switch from your product to an offering from a competitor, there’s a real chance that they will eventually do so.

The key to avoiding this situation is customer feedback. Feedback lets you stay one step ahead of your competitors by identifying and addressing needs before they can. It also lets you gain a deeper level of awareness of what your customers truly value in your product category.

An ongoing NPS process and continuous feedback keep you aware of how your customers respond to the products offered by your competitors, not just what they think of your product. This data is highly valuable in creating a product that not only acquires customers but retains them for the long term, hence increasing their customer lifetime value.

Even in a highly competitive market, a consistent NPS process has proven to be an invaluable strategy for market leaders like Apple, Tesla, Amazon, Airbnb, or Rackspace. These companies have capitalized on customer feedback to tailor their products, proactively address pain points and elevate the customer experience. Regardless of your size or niche, a similar approach will help you pinpoint growth opportunities while maintaining a loyal customer base.

The Less You Talk to Your Customers, the More You Need NPS®

Some businesses naturally have more customer interaction than others. An agency delivering a service will have frequent contact with its customers, whereas a product-based B2C company is unlikely to speak to any of its customers on a daily basis.

In businesses with frequent customer interaction, there’s less of a need for continual feedback, as concerns and questions are communicated naturally. However, in businesses with little or no customer interaction, systems like NPS are essential for measuring customer satisfaction.

Treating NPS as an ongoing process lets you stay in tune with customer needs and expectations and, as a result, deliver meaningful experiences. If you are looking to make NPS an integral part of your operations, consider investing in dedicated NPS software, following up on the received feedback and regularly reviewing performance.

NPS is a Journey, Not a Destination

When was the last time you asked your customers, “How are we doing?” Chances are, you’ve used Net Promoter Score to find out. NPS is one of the simplest ways to gauge customer sentiment – it’s quick, easy, and gives you a number to work with. But here’s the catch: many businesses treat NPS like a one-and-done survey. Send it out, get a score, and move on. Sound familiar?

In reality, NPS is so much more than just a number. It’s a window into how your customers feel about your business, and more importantly, it’s a tool for building better relationships over time. Treating NPS as a static metric misses the point. The real value lies in using it as a continuous process – a way to listen, learn, and adapt to your customers’ needs.

Now’s the time to shift your mindset. Don’t let NPS sit as just another KPI on a dashboard – turn it into a critical part of your strategy. Start small: map feedback touchpoints, close the loop with customers, and share insights across teams. Over time, this commitment to continuous improvement will lead to sustainable growth and a loyal customer base that champions your brand.

Retently lets you automate customer feedback using a simple NPS survey. Start using Net Promoter Score to gather, analyze and act on customer feedback to improve retention and grow your business. Find out more about Retently’s unique features or test it out in a free trial to witness the positive impact this ongoing input can have.

The post Why Net Promoter Score is an Ongoing Process (Not a One-Time Survey) appeared first on Retently CX.

Table of Contents

• Key Takeaways
• What Is a 5-Star Survey?
• Where Do You See 5-Star Surveys?
• When to Trigger 5-Star Surveys?
• Advantages and Disadvantages of 5-Star Surveys
• Labeling 5-Star Survey Ratings
• How Is the 5-Star Score Calculated?
• What Is a Good 5-Star Score?
• Best Practices for 5-Star Surveys
• Start Measuring Customer Satisfaction With Retently

There is nothing more important for a business than understanding the level of satisfaction and overall attitude of its customers. While talking to every customer personally is almost impossible, CX surveys take this function on.

Still, although 71% of consumers expect a personalized experience, most of them are unwilling to spend time responding to an endless stream of questions. Hence, businesses come up with options to minimize the efforts of their customers to share opinions and suggestions. 

The 5-star survey – a variety of the CSAT survey – is one of the quickest ways to gather customer feedback and gauge customer satisfaction. The 5-star rating system is widely recognized and understood by customers, making it a popular method to collect and analyze feedback, especially for ecommerce businesses. 

In this article, we’ll explore what a 5-star survey is, how the 5-star score is calculated, how to shape an efficient star survey and its value for companies willing to improve customer experience. Whether you’re new to using 5-star surveys or looking to improve your existing approach, this article will equip you with the essential knowledge to capture meaningful customer feedback.

Key Takeaways

• Simple and familiar, 5-star surveys provide an easy way to gauge customer satisfaction and identify areas for improvement across various touchpoints.
• Deploy surveys after key interactions (post-purchase, after support, or service delivery) and through the right channels to capture timely and honest feedback.
• Adding follow-up questions to 5-star surveys helps uncover the why behind ratings, providing actionable feedback for meaningful improvements.
• Using neutral wording, offering anonymity, and providing “No opinion” options encourage honest feedback and reduce inflated or biased responses.
• Leverage insights from 5-star surveys to refine existing products, develop new offerings, and enhance service delivery based on real customer needs.

What Is a 5-Star Survey?

A 5-star survey is a customer feedback questionnaire that uses a 5-point rating scale to assess satisfaction with a product or service. The concept is simple: customers are asked to rate a product, service, or experience on a scale of 1 to 5 stars. 

The specific meanings of the 5-star rating scale labels may vary depending on the survey, but in general, ​​  represent excellent or outstanding performance, while points to a poor experience. This type of customer satisfaction survey is widely used across various industries as it is quick to complete, and the scale is easy to interpret.

The question posed in a 5-star survey is usually worded in the following manner: “On a scale of 1 to 5, how would you rate your experience with us?”. Of course, there are variations, but the principle is the same. This question allows customers to provide a quick and straightforward assessment of their experience while also allowing businesses to collect valuable data and drive the necessary improvements based on the results.

Given its versatility, the 5-star rating system is widely used for CSAT since customers can rate different aspects of their experience and tackle a variety of scenarios.

So, what are some good survey questions to ask? Here are some additional examples of common 5-star survey questions:

• How would you rate the quality of our product?
• How would you rate the packaging of the product?
• How would you rate the cleanliness of our facilities?
• How would you rate the helpfulness of our staff?
• How would you rate the hotel amenities (pool, fitness center)?
• How would you rate the quality of the ordered food?
• How was the customer service you received?

Adding Context: Open-Ended Follow-Up Questions

Naturally, asking just one question isn’t enough as it provides no details about the rating. If a customer gave 1 star, you need to know why they are dissatisfied to take appropriate measures. That’s why following up with additional questions is crucial, as it helps capture actionable feedback to improve customer experience. The open-ended question should be worded based on the given score, allowing respondents to expand on their choice.

For instance:

• For High Ratings: “We’re glad you had a great experience! What did you love most?”
• For Low Ratings: “We’re sorry to hear that. Can you tell us what went wrong so we can improve?”
• Neutral Ratings:“Thanks for your feedback! How can we make your experience even better?”

The open-ended question is thus necessary to provide more context to the data and identify areas for improvement or potential competitive advantages. By asking customers what they like most about a product, brands can highlight these strengths in their marketing materials. At the same time, by inquiring about the disappointing aspects, they can deliver a better customer experience. Open-ended questions can also help to identify patterns and trends in the data that may not stand out with rating questions alone. That’s because they allow respondents to express opinions and feelings in a way that is not limited by the predefines scale of a rating question.

Tip: Just make sure the follow-up field is optional – some customers prefer to keep it simple.

Where Do You See 5-Star Surveys?

The 5-star surveys are popular among service providers such as hotels, restaurants, retailers, or medical care, as they allow quick assessments of customer satisfaction and the quality of rendered services.

So, you’ve definitely seen 5-star ratings everywhere! They’re a go-to feedback tool for many major platforms, including:

• Uber prompts riders and drivers to complete 5-star surveys after trips, allowing the company to monitor service quality and safety.
• Airbnb sends 5-star surveys to both hosts and guests post-stay to collect feedback on cleanliness, communication, and accuracy.
• Mobile Apps often use in-app 5-star survey prompts to gauge user satisfaction after completing a task or reaching a milestone. 

These platforms thrive on 5-star feedback because it’s quick, familiar, and effective.

When to Trigger 5-Star Surveys?

Timing is everything when it comes to gathering meaningful feedback. Knowing when and where to ask for a 5-star rating can make the difference between valuable insights and ignored surveys.

The timing for sending 5-star surveys can vary depending on the type of sought feedback. However, since 5-star surveys can be filled in quickly, it’s best to send them right after specific interactions with the product or service in question: for example, after a customer completes a purchase to assess their user experience with the website, post-delivery, or after they contact your support to judge its effectiveness.   

Still, there is a broader use for 5-star surveys, meaning you can send them regularly to track customer satisfaction levels over time and take appropriate action when you see any shifts. By consistently measuring customer satisfaction, brands can identify trends and patterns in customer feedback, allowing them to address any issues before they become liabilities. That can help build stronger relationships and drive growth in the long run.

While 5-star surveys can provide valuable feedback on individual experiences, they may not be the best tool for tracking overall customer satisfaction on an ongoing basis. A more effective approach is using Net Promoter Score surveys, as they provide a more complete picture of customer sentiment and allow for regular tracking and efficient benchmarking against industry standards. 

B2B vs. B2C Use Cases

While 5-star surveys work for all types of businesses, B2B and B2C companies use them differently based on customer interactions.

For B2B:

• Surveys after onboarding or product demos help gauge client satisfaction.
• Post-project feedback ensures service quality meets expectations.
• Follow-ups after quarterly check-ins or renewals can highlight areas for improvement.

For B2C:

• Ideal after purchases, deliveries, or customer service chats.
• In-store feedback kiosks or QR codes on receipts invite instant reactions.
• In-app ratings for ecommerce and digital services capture real-time feedback.

Tip: Regardless of your industry, make sure surveys feel natural in the customer journey. Asking at the wrong time (like too soon after a purchase or long after a service) can lead to low engagement or inaccurate feedback.

Advantages and Disadvantages of 5-Star Surveys

Advantages

Many businesses favor 5-star surveys for their ease of use and simplicity. It’s no surprise why, given the numerous advantages they offer.

The main advantage of a 5-star survey is its intuitiveness. Instinctively, we know that “1 star” is very bad, and “5 stars” is very good, and in most cases, respondents don’t need additional explanations. Irrespective of the customer’s language, the 5-star rating is very easy to interpret.

The 5-star surveys are straightforward and quick to complete: respondents only have to select a star. They don’t need to write long responses and spend much time answering questions. This simplicity also makes 5-star surveys accessible to a broader range of customers, including those who may not feel comfortable providing text feedback. That can lead to higher response rates compared to complex questionnaires.

Similar to other types of customer satisfaction surveys, they can help identify areas of strength and flag areas for improvement, allowing companies to take actionable steps to enhance their offering.

The 5-star survey provides a quantitative measure of customer satisfaction. That can be particularly useful for tracking trends over time, allowing businesses to monitor their progress and adjust accordingly. The numerical data from 5-star surveys can be easily visualized and analyzed, providing necessary insights into customer experiences. The 5-star rating system also offers a benchmark for companies to compare their performance with the competition.

This type of customer feedback survey is also visually pleasing: instead of boring text, we’ve got bright stars that are easily processed by the eye.

Ecommerce businesses have increasingly adopted 5-star surveys as the most popular type of customer survey, and use the 5-star survey ratings as a key performance indicator. They have become a common feature of the online shopping experience, making it a recognizable format for customers to leave feedback. Ratings and product reviews are also openly displayed, providing social proof for potential buyers, thus increasing sales.

Disadvantages

As simple and easy-to-use 5-star surveys may seem, there are certain considerations to keep in mind. 

The main disadvantage of 5-star surveys is the scale itself, namely the midpoint value, though opinions vary here. Psychologically people are not always willing to give very high or very low scores (or provide a score at all) unless their experience with your product/service truly impacted them positively or negatively. Frequently customers choose the midpoint value, in this case – 3 stars – to be neutral and avoid any repercussions. And it’s easier: no need to think much about it. Naturally, this doesn’t give much insight into customers’ actual attitudes and satisfaction levels. 

Neutrality isn’t the only concern. It is one thing when customers have to assess a service that doesn’t involve human interaction, like when they download an image from a stock site or buy something online. But it’s entirely different when they have to score someone they personally dealt with while experiencing your product. According to Professor John Horton from New York University, passengers tend to give high scores to Uber drivers, even if they don’t like everything, fearing the drivers may be fined or fired. Who would want to be responsible for it? 

Several studies have looked into how products and services are rated on popular platforms like Amazon, Airbnb, and Booking.com. They found that most ratings follow an extreme distribution pattern, meaning they tend to have either very high or very low ratings. For example, a study of 17 different platforms, including Amazon, found that 14 of them had extremely distributed ratings more than 50% of the time. While these ratings may not accurately reflect product quality, some consumers still find them helpful.

The interpretation of 5-star ratings can considerably vary across cultures due to differences in cultural norms and values. That is particularly relevant in the context of Hofstede’s cultural dimensions framework shown to influence consumer behavior, namely: power distance, individualism vs. collectivism, masculinity vs. femininity, uncertainty avoidance, long-term vs. short-term orientation, and indulgence vs. restraint. Hence, a 5-star rating may have different implications in different cultural contexts. 

The 5-star rating scale is limited in the detail it can provide, as it only allows for a broad rating of the customer’s overall satisfaction. It’s up to the follow-up questions to dig deeper for context and more actionable feedback. This information can be crucial for addressing specific customer needs. 

These types of surveys may also be limited in their scope. Since 5-star surveys rely mostly on transactional feedback, they may not cover all areas of a customer’s experience or broader aspects of business performance one may be interested in, such as loyalty and advocacy. Moreover, given its use as social proof, some companies may rely too much on the star rating and disconsider other factors impacting the customer experience.

In addition, sometimes respondents may not have all the information when they fill in the survey. For example, suppose a customer purchases an item from your store, everything seems to go smoothly, and he gives 5 stars. Later, he finds out that the item is out of stock, the card payment was declined, etc. Naturally, the customer is frustrated, but the score was already submitted, so there is no way to change it.

Still, it doesn’t mean that 5-star surveys don’t serve their purpose. Similar biases can also be applied to other survey types, so they are not unique to 5-star surveys. Yet, as long as you efficiently map your customer journey and trigger the corresponding survey for accurate results, these instances are reduced to a minimum.

Labeling 5-Star Survey Ratings

Despite their intuitive nature, 5-star surveys may still require additional clues or context. Providing rating labels would often help get more relevant and actionable feedback.

This option allows you to clarify the meaning behind each star rating, making it easier for respondents to accurately and consistently rate their experience. By using descriptive labels, you can ensure that everyone understands what each rating stands for.

Giving unambiguous labels is crucial to ensure effective communication. In some cases, survey creators shift the scores to a more positive side, leaving fewer options for negativity. For example, for many people very good and excellent is the same thing, while others may see the difference. So, a scale of poor – fair – good – very good – excellent isn’t balanced, as almost all scores are positive, and the calculated average will be distorted. 

A widely spread practice is labeling only the endpoints of the scale, like 1 star = very poor and 5 stars = very good, leaving the other empty and open to respondents’ interpretation. It is strongly recommended to label all points to get accurate and relevant feedback. 

These are some of the labels for a balanced scale:

• very poor – poor – fair – good – very good
• very poor – poor – average – good – excellent
• very little – little – some – much – very much

In short, when creating 5-star surveys, it is essential to keep the scale balanced and provide proper labeling to avoid score misinterpretation.

While the 5-star rating system is the most commonly used, some businesses opt for a variation ranging from 1-10 stars. The 1-10 star rating system has some advantages in terms of granularity but is generally less widely recognized and may be more challenging to use and interpret.

How Is the 5-Star Score Calculated?

The calculation of the 5-star score is simple: the total number of stars submitted by the respondents is divided by the number of ratings/responses.

Let’s explain it with an example. Suppose 60 customers responded to a 5-star survey and provided: ten ratings of 5 stars, twenty ratings of 4 stars, five ratings of 3 stars, fifteen ratings of 2 stars, and ten ratings of 1 star. 

The 5-star score would be calculated by the formula:

(1*10)+(2*15)+(3*5)+(4*20)+(5*10)/60=3,1 (rounded to the nearest tenth).

The 5-star score of the respective company would be 3,1 out of 5 stars.

What Is a Good 5-Star Score?

While there is no hard and fast rule for a good 5-star score, brands can still use some general guidelines to interpret customer feedback. 

A score of 5 stars points to an excellent experience and a highly satisfied customer with the product or service. It is a strong marker that the customer will likely return to repurchase. It’s the perfect time to ask for a public review or a referral.

While a 4-star rating may not be as exceptional as a 5-star, it means that the customer had a positive experience and is generally satisfied with the product. Still, there may be some slight adjustments needed. It’s a positive rating that implies the customer will likely consider the brand for future purchases. 

Is 3 out of 5 stars good? A score of 3 stars is considered neutral and hints at an average experience and existing issues you must address. While a 3-star rating is not negative,  brands should give due weight to the received feedback and use it to identify improvement opportunities. So, this is a great opportunity to dig deeper and learn what’s missing.

Scores below 3 stars express customer dissatisfaction and severe flaws on the brand’s side. A score of 2 stars may pinpoint a poor experience and a customer who is unlikely to return, while a score of 1 star is reserved for extremely negative experiences (for example, a defective product or a frustrating support interaction). This type of feedback requires immediate action. 

This being said, a good star rating is considered anything between 4 and 5 stars (if you use the 1 to 5 rating scale). It speaks of a high level of satisfaction and a positive experience with the product, service, or business.

However, keep in mind that the perception of a good star rating depends on many factors, including the context, the industry standards, and the cultural background. For some industries, a 3-star rating may be good; for others, such as luxury goods, anything less than a 5-star may cause concern. For example, an acclaimed restaurant may have higher standards for a good rating than a repair shop.

Yet, to better understand customer needs and expectations, it’s essential to consider the context and the additional feedback customers provide rather than focusing solely on the rating.

Best Practices for 5-Star Surveys

Following particular guidelines is crucial to reap the benefits of 5-star surveys fully.

• Proper labeling of stars will help avoid misinterpretation of scores and ambiguity. Sometimes businesses decide to turn the scale upside down, meaning that “1 star” is excellent, and “5 stars” is very poor: this approach is counterintuitive. Add descriptive labels above the icons and customize them to fit your needs to improve your survey results’ accuracy and usefulness. Consider using a balanced scale with positive and negative ratings to better capture the customer’s overall sentiment.
• Use simple, short questions to make the survey easy to navigate and complete. Don’t merge questions just to make the survey shorter while confusing respondents. Remember, while it’s important not to overwhelm customers, your final goal is to ensure accurate results.
• Since the rating question alone doesn’t give enough insights into the whole picture, additional questions will help better understand the opinions behind the given score. Be specific and focus on key areas of interest, to craft relevant and actionable questions that provide insight into the customer experience. For a boost of ideas relevant to your use case, leverage the survey question generator.
• As mentioned before, sometimes it is hard to understand whether the given feedback is honest and accurate. In this case, allowing anonymous responses is a solution, as respondents will be more honest when they know no repercussions will follow.
• Timing is essential. You should trigger the 5-star survey right after an interaction with the product or service to get immediate feedback. That allows respondents to provide thoughts and opinions while the experience is still fresh in their minds. Yet, you can send 5-star surveys regularly to keep track of any shifts in satisfaction. The timing must be tailored to the specific needs of each business to ensure the best results.
• Incorporate the N/A option (Not Applicable) to tailor the star rating system. This option can be used when a question is irrelevant to the respondent, offering an alternative that will not skew the data.
• If you’re offering a reward for completing the survey, make it clear that feedback – positive or negative – is equally valued.
• Consider rotating the type of feedback you collect. Mix in 5-star surveys with other formats like NPS or CES to keep things fresh.

Start Measuring Customer Satisfaction With Retently

Getting immediate feedback from customers is crucial as it allows timely action and avoids churn. The 5-star surveys serve this purpose best as they are usually short and simple and can be sent immediately after interacting with your product or service. 

Don’t settle for average customer satisfaction; allow Retently to help you deliver exceptional experiences that keep your customers returning for more. With our intuitive platform, you can easily collect and analyze customer feedback, identify areas for improvement, and track progress over time.  Sign up today for a 7-day trial and upgrade to a 5-star experience!

The post A Comprehensive Guide to 5-Star Surveys appeared first on Retently CX.

Table of Contents

• Key Takeaways
• What are Stay Interviews?
• Key Benefits of Stay Interviews
• Stay Interviews Questions: Uncovering What Really Matters
• How to Implement Effective Stay Interviews
• Measuring the Effectiveness of Stay Interviews: Key Metrics and Data Collection Strategies
• Collecting and Analyzing Stay Interview Data
• Unlocking the Full Potential of Stay Interviews

When you’re sitting down for an exit interview, it’s usually too late to change someone’s mind about leaving. These interviews can tell you why someone decided to leave, but wouldn’t it be great if you could catch those issues early on? That’s where stay interviews can help. They’re a proactive way to check in and sort things out while there’s still time to make a difference.

Losing an employee is more than just an inconvenience – it can be really costly. Think about it: replacing a manager could cost double their salary, technical staff about 80%, and frontline workers around 40%. And that’s just the money side of things. When someone leaves, they take their expertise, impact morale, and sometimes trigger a chain reaction of exits. This can really shake things up in a department.

With 1 in 2 U.S. employees already exploring new opportunities, retaining your top talent can seem daunting. Stay interviews give a chance to pinpoint those blind spots early on and fix them before they become deal-breakers. Plus, they make performance reviews more than just a routine check-up – but real opportunities for specific, actionable discussions.

In this article, we’ll explore how stay interviews work, why they’re efficient for employee retention, and what key strategies you can use to turn feedback into meaningful changes. It’s time to stop reacting and start retaining.

Key Takeaways

• Stay interviews allow companies to address employee concerns early, reducing dissatisfaction and turnover. They give managers the opportunity to engage directly with employees and resolve issues before they escalate.
• Replacing employees, particularly in leadership roles, can cost up to 200% of their salary. Stay interviews help cut these costs by keeping top talent engaged.
• Cross-referencing stay interview data with key metrics such as eNPS, turnover rates, absenteeism, and internal mobility, helps assess the effectiveness of retention initiatives.
• Stay interviews should be integrated into broader HR strategies, with regular feedback and metrics reviews, to ensure that retention efforts evolve with employee needs.

What are Stay Interviews?

Stay interviews, often called retention interviews, are one-on-one discussions between managers and their employees, designed to get to the heart of two key questions:

• What does the employee enjoy about their role and the company?
• What changes would improve their experience, whether it’s their job, team, or work environment?

These interviews are also a great way to spot if someone might be considering leaving and give companies a heads-up to plan ahead or kickstart succession planning.

So, what sets stay interviews apart from exit interviews? 

While exit interviews are usually handled by HR when employees are already on their way out, stay interviews are led by the employee’s direct manager. Why? Because managers are the ones who can actually make a difference in their day-to-day experience. 

The goal isn’t just to gather feedback for the company as a whole but to figure out how to make things better for that specific employee, keeping them happy and motivated to stay. By having managers lead these talks, companies can take a more personalized approach to retaining their top talent.

Key Benefits of Stay Interviews

Stay interviews bring plenty of benefits, especially when it comes to strengthening employee retention and keeping your top performers happy. Here’s why they’re so effective:

• Tackle issues before they escalate: Stay interviews give employees a safe space to voice concerns, allowing managers to address small frustrations before they turn into bigger issues that might cause someone to leave.
• Increase job satisfaction: When employees feel heard and their feedback leads to real changes, their loyalty grows. Stay interviews allow managers to understand what truly motivates their team and adjust accordingly to keep everyone engaged.
• Identify potential turnover risks: These conversations help managers spot when an employee feels disconnected or is exploring other job opportunities. Acting on these early signals can prevent the loss of valuable team members.
• Support career growth: Stay interviews offer insights into employees’ long-term goals. By aligning their career path with the company’s objectives, you can keep them invested and plan for future leadership roles.
• Retain top performers: By focusing on what keeps your best employees satisfied and meeting their needs, stay interviews increase the chances of retaining key performers for the long term.

Stay Interviews Questions: Uncovering What Really Matters

Stay interviews are a great opportunity to understand what fuels your employees’ best work, what hurdles are slowing them down, and what might be nudging them toward the door. Here’s how to approach these key conversations with thoughtful questions:

1. Job Satisfaction: What Parts of Your Role Light You Up?

Employees experience specific times when they feel particularly engaged in their work, which can vary based on tasks, projects, or interactions. Leveraging these moments can lead to higher motivation, as they are more likely to feel fulfilled and valued when they can focus on what excites them. Understanding what employees enjoy allows managers to tailor their responsibilities, making work more productive.

Questions to consider:

• “On a scale of 1-10, how satisfied are you with your current responsibilities?”
• “What tasks or projects have you been most excited to work on recently?”
• “When during your workday do you feel most fulfilled?”
• “If you could spend more time on any part of your role, what would it be?”
• “Which accomplishment in the past few months are you most proud of?”

What to do next: Once you’ve identified what excites them, find ways to channel more of their daily efforts into these areas. 

2. Room for Improvement: What’s Slowing You Down?

Even the most engaged employees face obstacles that can make their work feel sluggish. These frustrations might seem small, but they can add up over time and hinder productivity. By understanding what’s getting in the way you can remove these barriers and support smoother workflows.

Questions to consider:

• “On a scale of 1-10, how smooth is your work process on an average day?”
• “What’s one ongoing challenge that affects your performance?”
• “Is there a particular task or tool that makes your job unnecessarily difficult?”
• “If you could remove one obstacle from your workday, what would it be?”
• “What aspects of your role do you find the most time-consuming?”

What to do next: Take their feedback seriously and think of solutions. This might involve simplifying processes, upgrading tools, clarifying expectations, or providing additional support. Addressing these challenges can lead to a more satisfying work experience for everyone.

3. Career Development: What Skills Do You Want to Sharpen?

Employees are eager to grow in their roles and these questions allow them to share new challenges they’re interested in or skills they’d like to develop. It’s a chance for them to stretch their abilities and for you to help them see a future within the company. This creates a sense of purpose and direction for employees.

Questions to consider:

• “On a scale of 1-10, how confident are you in the career growth opportunities here?”
• “What skills or knowledge areas would you like to develop that you haven’t had the chance to yet?”
• “Is there a new responsibility or project you’d love to take on to help you grow?”
• “How do you see your role evolving over the next year or two?”
• “What kind of professional development or training would make you feel more engaged?”

What to do next: Once you understand what they want to learn or achieve, think about how you can give them those opportunities within the company. Supporting employees in developing new skills makes them more effective and keeps them engaged.

4. Work-Life Balance: How Well Is the Scale Tipping?

A healthy work-life balance is key to long-term satisfaction and preventing burnout. Discussing flexibility and workload helps create a more supportive work environment. It shows that the company genuinely values employee well-being, which can improve morale and productivity.

Questions to consider:

• “On a scale of 1-10, how would you rate your current work-life balance?”
• “What specific change would have the biggest positive impact on your work-life balance?”
• “Do you feel like your current workload allows for enough personal time?”
• “Would more flexibility in your schedule help improve your balance?”
• “What’s one aspect of your job that, if changed, would help you feel less overwhelmed?”

What to do next: Based on their feedback, pinpoint any stressors and make adjustments to better support employees. Consider ways to adjust workloads, or whenever possible, offer flexible hours to help them manage their responsibilities more effectively. 

5. Leadership Support: How Can I Help You Succeed?

Effective leadership is all about empowering your team to reach their full potential. These questions invite employees to voice what they need from you to feel more supported in their roles and to achieve their goals.

Questions to consider:

• “On a scale of 1-10, how supported do you feel by me as your manager?”
• “What’s one thing I could do differently to help you succeed in your role?”
• “How do you prefer to receive feedback? Is there anything I can adjust in my approach?”
• “Is there a specific way I can better support you when you’re facing challenges?”
• “What’s one thing I can do to improve the way I lead our team?”

What to do next: Use stay interview feedback to fine-tune your leadership style. Sometimes, it’s about giving them the right resources or simply adjusting your communication approach. By responding to their needs, you can help employees thrive in their roles.

6. Team Dynamics: How Well Does the Team Work Together?

Strong team dynamics are key for collaboration and overall performance. Asking employees about how well the team communicates and supports one another can help identify any issues that might be affecting the group’s effectiveness and morale.

Questions to consider:

• “On a scale of 1-10, how well do you feel your team collaborates on projects?”
• “What’s one thing we could change to improve communication within the team?”
• “How supported do you feel by your teammates when working on group tasks?”
• “Are there any obstacles that hinder teamwork in your department?”
• “What strengths do you think your team has that we could leverage more effectively?”

What to do next: Take steps to address any communication gaps and improve collaboration. Consider team-building activities or workshops to strengthen relationships and improve how team members work together. When everyone is in sync, the team can perform at its best, leading to higher job satisfaction and productivity.

7. Vision and Goals: Where Should We Be Heading?

Your employees have valuable insights into the company’s strategy and goals. Asking for their input not only makes them feel heard but also helps ensure that the company’s vision is aligned with their values and aspirations.

Questions to consider:

• “On a scale of 1-10, how connected do you feel to the company’s vision?”
• “What’s one strategic change you think we should make to achieve our goals?”
• “How do you feel about the direction we’re heading as a company?”
• “What part of our strategy resonates most with you, and why?”
• “What potential gaps do you see in our approach?”

What to do next: Create regular opportunities for employees to contribute to strategic discussions, such as through focus groups or brainstorming sessions. Engaging them in discussions about the company’s vision not only empowers them but also fosters a sense of ownership in the company’s future.

8. Long-Term Commitment: What Would Make You Stay for the Long Haul?

Employee retention isn’t just about keeping people around – it’s about making them want to stay. These questions can encourage your team to reflect on what would make them commit to the company for the long term.

Questions to consider:

• “On a scale of 1-10, how likely are you to stay with the company for the next two years?”
• “What’s one change or opportunity that would make you want to stay longer?”
• “Is there anything that could push you to consider leaving in the near future?”
• “What could we do to make this your long-term career home?”
• “What would make you more committed to staying here for years to come?”

What to do next: Focus on addressing individual needs and building clear pathways toward a future they’ll want to be a part of. This could include offering growth opportunities, revising compensation packages, organizing regular team-building activities, or implementing recognition programs.

9. Recognition: How Can We Show Appreciation?

Recognition is the fuel that keeps employees motivated and engaged. These questions help find out if they feel valued for their contributions and how you can improve your approach.

Questions to consider:

• “On a scale of 1-10, how valued do you feel for your contributions?”
• “How often do you receive recognition that feels meaningful?”
• “What type of recognition or rewards resonate most with you?”
• “Is there anything more we can do to make you feel appreciated?”
• “Are there specific achievements you feel should be celebrated more?”

What to do next: Tailor your recognition efforts to fit individual preferences. Different employees respond to different forms of appreciation, so make sure you’re speaking their language. Consider implementing a mix of formal recognition programs, spontaneous praise, and personalized rewards to create a culture of appreciation that truly reflects the value of each team member’s efforts.

10. Work Environment: How Does Your Workspace Support You?

The physical and cultural aspects of the workplace play a huge role in employee satisfaction. Understanding employees’ perceptions of their work environment – both in terms of the physical layout and the organizational culture – can help identify what’s working well and what needs improvement.

Questions to consider:

• “On a scale of 1-10, how satisfied are you with your work environment?”
• “What’s one thing we could change to make your workspace more comfortable?”
• “Do you feel like the company culture aligns with your personal values?”
• “Is there anything about the work environment that’s negatively affecting your job?”
• “What’s one improvement you’d like to see in the way we work?”

What to do next: Make adjustments to ensure their physical and cultural work environments are as supportive as possible. A positive workspace is like a stage – it sets the scene for a great performance.

How to Implement Effective Stay Interviews

Stay interviews should be a core component of your proactive HR strategies. When done right, they provide valuable insights into employee satisfaction and engagement, helping you address concerns before they lead to turnover. Here’s how to implement stay interviews effectively, backed by research:

1. Assess Your Company’s Culture

Before jumping into stay interviews, take a moment to assess your company culture. If your workplace lacks transparency or trust, these interviews might backfire. Employees could see them as just a formality, leading to biased answers or even more dissatisfaction. If trust is an issue, focus on initiatives that promote open communication and collaboration, and show that feedback leads to real change.

To implement: Use employee surveys or informal chats to see if your team feels comfortable participating openly in stay interviews. If needed, work on building trust before moving forward.

2. Create a Safe and Supporting Environment

Psychological safety is essential for effective stay interviews. According to Harvard Business School professor Amy Edmondson, psychological safety means that one can speak up without fearing negative consequences. When employees feel safe, they’re more likely to share honest feedback without worrying about judgment or repercussions. 

Additionally, Google’s Project Aristotle study found that teams with higher psychological safety perform better and are more innovative. That’s why stay interviews should be led by someone the employee trusts to encourage open dialogue, typically their direct manager.

To implement: Make it clear that confidentiality is a priority and that the purpose of the stay interview is to improve the employee’s experience, not to evaluate performance. Set a relaxed, conversational tone from the start to help employees feel comfortable sharing their insights.

3. Make Stay Interviews a Routine

According to the Work Institute’s Retention Report, 52% of voluntary employee turnover happens within the first year of employment, suggesting that early intervention can reduce exits. Moreover, Gallup has found that employee engagement tends to drop after six months of employment, making this a critical time for check-ins. Instead of waiting for signs of dissatisfaction, make stay interviews part of a regular feedback cycle. 

To implement: Schedule stay interviews regularly, ideally every six months to a year. Consider adding extra sessions at key moments – after major projects, work anniversaries, promotions, organizational changes – to capture timely feedback on evolving employee sentiments.

4. Ask Thoughtful, Data-Backed Questions

The success of stay interviews depends on the questions you ask. Effective questions should focus on key drivers of job satisfaction, such as achievement, recognition, and growth opportunities, as highlighted by Frederick Herzberg’s Two-Factor Theory. Additionally, LinkedIn found that employees who believe their employers are investing in their professional development are 94% more likely to stay with the company.

To gain valuable insights, craft questions that tap into intrinsic motivators such as autonomy, mastery, and purpose, which are known to influence employee engagement and retention. Use a mix of data-driven and open-ended questions that provide deeper insight into the employee’s experience.

To implement: Tailor your stay interview questions to cover both job satisfaction and growth opportunities. Use data from internal surveys or previous interview feedback to refine your questions, making them relevant to each employee’s role and career path.

5. Keep It Conversational

While it’s important to schedule stay interviews in advance, the conversations themselves should feel informal. Try to avoid making the conversation overly structured or performance-focused. Instead, think of the stay interview as a casual chat where employees feel at ease discussing their experiences, concerns, and aspirations without worrying about being judged.

To implement: Foster a relaxed setting by starting with light, open-ended questions, and allowing the conversation to flow naturally rather than sticking strictly to a script.

6. Focus on Verbal and Nonverbal Cues

Studies show that 93% of communication is nonverbal, meaning body language can often reveal hidden dissatisfaction even if verbal responses seem positive. By paying attention to both what is said and how it’s said, you can better understand the employee’s true feelings. Managers should make an effort to maintain eye contact, nod, and ask follow-up questions to show they’re engaged.

To implement: Use follow-up questions to dig deeper into any concerns revealed by body language, tone, or pauses in conversation. Showing empathy and genuine interest in what’s being said will help build trust throughout the discussion.

7. Provide Meaningful Feedback

Feedback is essential for employee development, but it needs to be constructive and specific. Stay interviews offer a relaxed setting for meaningful feedback, making it easier to discuss what’s working well and what can be improved without the pressure of formal performance reviews.

Effective feedback should be balanced, acknowledging both the strengths and areas for growth. By offering actionable insights, you empower employees to set clear goals and foster a sense of purpose. Make sure to include measurable steps they can take after the interview to support their ongoing improvement.

To implement: During the stay interview, share specific examples to guide improvement and outline the next steps. Regularly check in to keep employees on track and feeling supported in their growth.

8. Set Clear Expectations

Unclear expectations are a common source of frustration for employees. Without clear guidance, employees may feel like they’re underperforming or that their contributions are overlooked.

During stay interviews, ask employees if they feel confident in their roles and understand how their performance is evaluated. Make sure that goals are clear, measurable, and aligned with both the employee’s strengths and the company’s objectives. This helps them have a sense of purpose in their work.

To implement: Use the stay interview to define measurable goals for employees. Regularly check in on these expectations to provide support.

9. Follow Up with Actionable Outcomes

One of the biggest mistakes companies make after stay interviews is not acting on feedback. Research shows that companies with strong learning cultures – those that prioritize professional development and growth opportunities – are 30-50% more likely to retain employees. This highlights the importance of addressing feedback promptly. 

After conducting stay interviews, summarize the key takeaways and create a clear action plan to resolve any concerns. Be transparent: inform employees about the changes based on their input and provide timelines for implementation. When employees see their feedback leading to real improvements, they are more likely to stay engaged and loyal.

To implement: After the interviews, share a written summary with each employee that outlines the steps to address their concerns. Follow up periodically to see if these changes are making a positive impact and to gather further feedback on progress.

Measuring the Effectiveness of Stay Interviews: Key Metrics and Data Collection Strategies

Stay interviews are a valuable tool for improving employee retention, but their effectiveness must be measured to ensure they drive meaningful change. By using key metrics, you can assess how well these interviews address employee concerns and enhance overall engagement.

1. Employee Net Promoter Score (eNPS)

The Employee Net Promoter Score (eNPS) is a reliable metric for gauging overall employee satisfaction and loyalty. It measures how likely employees are to recommend your company as a great place to work, using a simple 0-10 scale. Based on their score, employees fall into three categories:

• Promoters (9-10): Highly satisfied employees who actively recommend the company.
• Passives (7-8): Employees who are content but not particularly enthusiastic.
• Detractors (0-6): Unhappy employees who are likely to share negative feedback or consider leaving.

To calculate eNPS, subtract the percentage of Detractors from Promoters. A higher score indicates greater loyalty and satisfaction, helping you track changes over time, especially after implementing stay interviews or other engagement initiatives.

How to use eNPS:

• Compare Before and After: Conduct eNPS surveys before and after stay interviews to measure shifts in employee sentiment.
• Address Detractor Feedback: Use insights from Detractors to identify specific issues needing attention in stay interviews.
• Identify Common Themes: Analyze eNPS results to uncover recurring themes in employee feedback that can inform stay interview discussions.
• Regular Monitoring: Make eNPS surveys a regular part of your feedback process to continuously assess the impact of stay interviews.

2. Turnover Rate

Your turnover rate is the percentage of employees who leave the company during a certain period. This number can tell you a lot about how well your stay interviews are working and how engaged your employees are. Turnover can be split into two main types:

• Voluntary Turnover: Employees leave by choice, often due to dissatisfaction or better opportunities.
• Involuntary Turnover: Employees are asked to leave due to performance issues or layoffs.

Since stay interviews focus on preventing voluntary turnover, tracking this rate can show if you’re effectively addressing the reasons employees leave. A decrease in turnover suggests that employees feel more valued and engaged.

How to use turnover rates:

• Focus on Voluntary Turnover: Pay close attention to voluntary turnover since it reflects employee satisfaction. Compare rates before and after stay interviews to see if your efforts are making a difference.
• Segment Data: Break down turnover data by role, department, demographics, tenure, or other factors to identify which areas benefit most from stay interview initiatives. This can help you tailor your approach to meet different teams’ needs.
• Look for Trends: Keep an eye on patterns in voluntary turnover. Are some teams losing more employees than others? This information can help you focus your stay interviews where they are needed most.

3. Employee Satisfaction Surveys

Employee satisfaction surveys provide deeper insights into specific areas of job satisfaction such as career development, work-life balance, leadership, and workplace culture.A well-known example is Gallup’s Q12 Employee Engagement Survey, which assesses key factors that drive employee engagement, including whether employees feel valued, have opportunities for growth, and believe their opinions matter.

How to use employee satisfaction surveys:

• Align Insights: Compare survey data with stay interview feedback to identify common themes and discrepancies. This helps prioritize areas that need immediate attention.
• Prepare for Stay Interviews: Use survey results to inform the topics you discuss during stay interviews for more targeted conversations.
• Evaluate Impact: After implementing changes based on stay interview feedback, follow up with surveys to assess their effectiveness.

4. Retention and Absenteeism Rates

Retention rates indicate the percentage of employees who stay with your company over a specific period. High retention reflects a positive workplace culture, while low retention rates can signal issues with employee satisfaction. Tracking retention rates alongside stay interview data helps evaluate how well you’re addressing concerns that lead to voluntary turnover.

Absenteeism rates also offer valuable clues; high absenteeism often signals disengagement. Frequent absence can point to morale issues that stay interviews can help uncover.

How to use retention and absenteeism rates:

• Measure Changes: Compare retention and absenteeism rates before and after stay interviews to evaluate impact.
• Spot Trends: Analyze absenteeism data to identify disengagement patterns, which can be further explored in stay interviews.
• Link Feedback to Action: Use insights from stay interviews to implement targeted initiatives that improve retention and reduce absenteeism.

5. Internal Mobility Rate

Internal mobility, or the rate at which employees are promoted or transition to different roles within the company, is a key indicator of how well you support career growth. When employees see opportunities for advancement, they are more likely to stay engaged and loyal, reducing the urge to seek opportunities elsewhere.

If stay interviews reveal feelings of stagnation, tracking internal mobility rates can help you assess the effectiveness of your initiatives. An increase in promotions or lateral moves after stay interviews suggests that you are successfully addressing employees’ desires for growth.

How to use internal mobility rates:

• Track Promotions and Lateral Moves: Monitor changes in internal mobility after stay interviews to see if you’re providing the advancement opportunities employees seek.
• Align Mobility with Development Plans: Ensure that internal mobility corresponds with individual development plans discussed during stay interviews.
• Focus on Career Aspirations: Use stay interviews to ask about employees’ career goals and any perceived barriers to advancement. This can guide your mobility strategies.
• Communicate Career Pathways: Clearly outline potential career paths within the organization to help employees understand how to achieve their goals.

Collecting and Analyzing Stay Interview Data

Stay interviews are valuable not just for the conversations themselves, but for how you collect and act on the insights gained. By turning qualitative and quantitative feedback into actionable strategies, you can significantly improve employee retention. Here’s how to effectively gather and analyze stay interview data for maximum impact:

1. Standardize Data Collection

To effectively leverage stay interview data, start by standardizing your data collection process. A consistent approach makes it easier to analyze feedback and track trends over time.

How to Standardize Data Collection:

• Use Pre-Developed Questionnaires: Create a set of standardized questions covering key areas like job satisfaction, leadership effectiveness, career development, and workplace culture. This ensures consistent data across interviews.
• Implement Forms and Templates: Use digital or paper forms with pre-set fields to record responses. These could be a mix of multiple-choice questions, rating scales, and open-ended questions to capture both quantitative and qualitative data.
• Train Interviewers: Provide training to interviewers to ensure consistency in how questions are asked and responses are recorded.
• Adopt Software Tools: HR management or employee engagement software for structured data collection, making it easier to integrate results with metrics like eNPS.

2. Organize Feedback

After collecting data from stay interviews, make sure to categorize the feedback. This helps identify patterns related to employee experience and makes it easier to communicate key findings to management.

How to Categorize Feedback:

• Organize by Theme: Group responses into broad categories such as leadership, career growth, work-life balance, recognition, work environment, and job satisfaction. For example, feedback about feeling unsupported by a manager would fall under leadership.
• Separate Positive vs. Negative Feedback:  Within each category, sort responses into positive, neutral, and negative to highlight strengths and areas that need improvement.
• Track Frequency: Track how often specific concerns or praises are mentioned to pinpoint critical areas for action.

3. Identify Trends

Once feedback is categorized, the next step is to identify recurring themes and trends across employees, teams, or departments. Identifying them allows you to focus on the most significant areas for improvement. Instead of tackling issues individually, you can address broader topics that affect multiple employees.

Steps for Pattern Identification:

• Analyze Quantitative Data: Use numerical data provided during the stay interview to identify overall trends. For instance, if the majority of employees rate their leadership experience below 5 on a scale of 1 to 10, this indicates a systemic leadership issue.
• Identify Common Themes: For qualitative data, such as open-ended feedback, look for recurring themes. For example, if several employees across different teams mention “lack of career progression” as a concern, it indicates that your development programs are not meeting expectations.
• Segment Feedback: Break down the data by department, role, or tenure to see if specific groups face similar challenges. For instance, newer employees might feel more disconnected from company culture compared to long-term employees.

4. Prioritize and Develop Actionable Solutions

Not all feedback can be addressed at once, so it’s important to prioritize. After identifying key themes and cross-referencing them with HR metrics, decide which issues require immediate attention and which can be handled later.

How to Prioritize Feedback:

• Focus on High-Impact Issues: Concentrate on the most frequently mentioned concerns. By tackling these, you can implement changes that positively affect a larger number of employees.
• Set Short- and Long-Term Goals: Establish quick wins for immediate impact and longer-term projects for bigger changes. Quick fixes, like improving communication, can be implemented faster, while bigger initiatives, like revamping career development, may require more time and budget.

• Involve Employees in Solutions: Invite employees to participate in developing solutions. This encourages ownership and generates ideas that align with their needs.
• Engage Leadership: Ensure buy-in from senior leaders to prioritize and implement company-wide changes.
• Develop an Action Plan: Create clear steps to address the identified issues. Outline an action plan with specific, measurable outcomes and deadlines to track progress effectively.

5. Follow Up and Reassess

Data collection doesn’t stop after the stay interview. To ensure your changes are effective, it’s important to follow up with employees and reassess their satisfaction regularly.

Steps for Follow-Up and Reassessment:

• Communicate Changes: Inform employees about the changes made based on their feedback. Transparency builds trust and demonstrates that their input leads to real outcomes.
• Monitor Metrics: Continue to track metrics like eNPS, satisfaction scores, and turnover rates to evaluate the effectiveness of your changes and identify areas needing attention.
• Revisit Stay Interviews: Plan follow-up stay interviews after several months. This ongoing dialogue helps address new concerns promptly and keeps you updated on employee needs.
• Feedback Loops: Establish mechanisms for ongoing feedback beyond stay interviews. Consider regular surveys that allow employees to always share their thoughts, keeping engagement high and addressing issues in real-time.

6. Use Data to Inform Long-Term HR Strategies

Finally, the insights gathered from stay interviews should inform your long-term HR strategy, not just address immediate concerns. By tracking employee feedback and its impact on key metrics, you can identify effective policies that drive retention and engagement.

How to Build a Long-Term Strategy:

• Identify Trends and Adjust Strategies: Analyze stay interview data to spot emerging trends, such as increasing demands for remote work or flexibility, and adjust company policies accordingly to meet evolving employee needs.
• Anticipate Needs: Use feedback to proactively address future HR needs. For instance, if employees express interest in leadership development, plan relevant training programs or mentorship opportunities.
• Integrate with Performance Management: Align stay interview feedback with performance reviews to create a comprehensive view of employee engagement and development. This helps identify high-potential employees and tailor growth opportunities to their needs.

Unlocking the Full Potential of Stay Interviews

Stay interviews are not just conversations; they’re effective tools that can boost employee engagement and significantly lower turnover rates. By giving employees a platform to share their concerns and aspirations before they hit a breaking point, companies can proactively tackle issues that might otherwise lead to costly resignations. These interviews foster trust, strengthen relationships, and help employees feel truly valued and supported in their roles.

To further enrich your understanding of employee sentiment, consider integrating Employee Net Promoter Score (eNPS) surveys into your feedback strategy. While stay interviews provide in-depth conversations, eNPS offers a quick snapshot of how likely employees are to recommend your company as a great place to work. This mix allows you to gauge overall satisfaction and identify specific areas needing attention.

So, why wait? Start your stay interview process today and incorporate eNPS insights into your retention strategy. Leverage Retently to automatically collect, analyze and act on valuable eNPS data. Try it in a free trial to unlock the full potential of your team’s engagement and long-term success.

The post Stay Interviews: The Key to Retaining Top Talent Before It’s Too Late appeared first on Retently CX.

Table of Contents

• Key Takeaways
• Market Leaders’ NPS Scores
• High Customer Retention and Growth
• What Do These Companies Have in Common?
• Want to Find Out What Your Own NPS Is?

Does your company retain its customers or take them for granted? Customer retention is one of the most important aspects of growing your company, yet it’s one that many overlook, focusing more on acquiring new customers. Given that, it’s 6 times more expensive to attract new customers than to keep existing ones – the ignorance shall turn costly.

The longer your company can retain its customers, the greater the value of each customer you acquire. The key to retaining customers is extremely simple: deliver value and provide a great experience that makes customers want to stick with you and recommend you to others. Of course, besides doing that, you also need to track your results.

Well, by far the most effective way to measure customer satisfaction and loyalty is via the Net Promoter Score. After all, brands with high customer retention are usually companies with a high NPS score.

Since the best way to realize the importance of something is to see it in action, we’re going to discuss what companies with the highest NPS score in 2024 (Apple, Starbucks, Netflix, Tesla, Airbnb, and Amazon) have in common that sets them apart from their competitors.

Key Takeaways

• Companies with high NPS know that keeping customers happy is smarter – and cheaper – than always chasing new ones. 
• These brands thrive by consistently delivering value through reliable, user-friendly products while providing personalized and seamless experiences across every customer touchpoint.
• By leveraging employee satisfaction, they deliver exceptional customer service, as engaged employees are more committed to creating experiences that drive loyalty and boost NPS scores.
• High NPS companies maintain accountability and credibility with users, making them a favored choice for repeat purchases.

Market Leaders’ NPS Scores

According to the data we gathered from various sources, these are the scores of the mentioned companies:

• Netflix’s NPS is 68, well above their competition;
• Starbucks’ NPS is a decent 77;
• Amazon’s NPS is a pretty high one at 62;
• Airbnb’s NPS is quite strong at 74;
• Tesla’s NPS is an astounding 96.

Given that an NPS score averages between -100 and 100, it’s clear the NPS scores of these top companies match their brands’ level of popularity.

So, what do those high scores translate into, specifically?

High Customer Retention and Growth

A high NPS score means a lot of customers are so happy with the brand that they are much more likely to stick around with it simply because they like the company alongside its products and its services.

Let’s see what level of customer retention each company has, in fact.

Amazon Customer Retention

Research has shown that 73% of people who try out Amazon Prime become paid members. What’s more, after the first year, 91% of the members renew their subscription for a second year, and 96% of those members pay for a third year as well.

Even today, Amazon is actually boasting amazing customer loyalty, at least according to Forbes; however, the company wasn’t quite ready to share exact customer numbers up until recently. Still, Amazon did state they signed up more new paid members in 2017 than any other year and in 2020 they mentioned having more than 200 million Prime members worldwide.

In 2024, Amazon reported impressive financial results, with total revenue climbing by 12% year-over-year in the US and 11% year-over-year in international markets.

Airbnb Customer Retention

The platform has grown very popular since it first launched, and Airbnb’s NPS score reflects that.

Although Airbnb’s revenue took a massive hit due to lockdowns throughout 2020, and did not reach the forecasted 60.8 million users by 2021, the audience steadily grew over the years.

According to statistics, Airbnb amounted to around 41.1 million users as of 2019, and the number was expected to grow to around 45.6 million by 2022 – and that’s only in the US! Worldwide, it’s estimated that Airbnb has around 150 million users.

Tesla Customer Retention

Tesla’s customer retention shows what an impact that huge NPS score has. Apparently, approximately 91% of Tesla owners said “they would buy again” from this brand. Tesla has actually been no #1 in the Annual Owner Satisfaction Survey over the years.

Tesla is therefore a leader in brand loyalty, being the only major automotive brand that showed an increase in sales of up to 21.4% in 2020 to date. At the same time, 25% of Tesla owners said they’re not even considering buying a different vehicle or doing business with another brand.

Although US demand for electric vehicles has been weaker than anticipated lately, the global market is on the rise, with electric cars projected to account for over 20% of worldwide sales in 2024. Therefore, Tesla’s outlook remains optimistic.

Netflix Customer Retention

Compared to its competitors, Netflix has an amazing retention rate. According to research, while a lot of Hulu (61%) and HBO Now (62%) subscribers pay for other streaming services, 80% of the Netflix subscribers don’t. In fact, the Hulu and HBO Now subscribers in question actually pay for Netflix on the side!

Plus, the average Netflix subscriber will stay with the company for 25 months. So, Netflix has enough time to earn back the money they spend on acquiring new customers.

As the pandemic was underway Netflix added a record of nearly 37 million additional customers in 2020. Although it was unlikely that they would be able to match the same result in the following years, Netflix still remained the leader of the streaming industry with over 221.8 million total paying subscribers by the end of 2021. As of the second quarter of 2024, Netflix reached over 277 million paid subscribers worldwide.

Starbucks Customer Retention

Consumers love Starbucks – even more since the company implemented its rewards program. Apparently, customer loyalty was so high that Starbucks’ program ended up holding more money than some banks.

Starbucks’ app is also used regularly by around 48% of app users, being the most popular amongst the restaurant loyalty rewards apps. It is also the second most-used mobile payment app (after Apple Pay) with 31.2 million users – showcasing the kind of customer loyalty the brand enjoys.

What Do These Companies Have in Common?

1. Simple, Reliable Services & Products

All these market giants have so many Promoters because those people love how easy their services/products are to use, and how reliable they are.

For example, the biggest initial selling point of Netflix was its simplicity – a great online entertainment service that saved you time. That trend continues to this day. Amazon has invested plenty of resources into making its sales, shipping, and return processes as simple and reliable as possible.

Tesla’s cars feature a very sleek, user-friendly design. Instead of multiple buttons, joysticks, and knobs, Tesla owners get to enjoy a large display screen that features easy-to-use on-screen touch controls.

Airbnb’s platform is fairly easy to use and get the hang of, and its mobile apps are simple to understand too. Since guests can message hosts before making a booking to ask questions and get to know them, it also makes the service quite reliable in the sense that people will know exactly who they will be doing business with.

As for Starbucks, they’re known for offering what some would call “the best coffee experience”, highlighting their reliability. Plus, their loyalty app lets people order ahead, meaning they can just place an order for a coffee and food, and pick it up on their way to work or home.

That’s not to say you need to do the exact same thing as these companies, but anything that makes your product a more convenient, reliable, and dependable choice will increase the value a customer gains from staying with you.

2. Fast, Straightforward, Quality Services

Offering reliable, easy-to-use services/products will do wonders for a company’s customer retention rate, but it won’t be enough to maintain it. The offering in question also needs to be fast and convenient, so that they save consumers time and effort.

Here are just some ways these companies achieve that goal:

They Make Customer Interactions with Their Brands Effortless

How? By collecting all the relevant info from customer complaints, support requests, and feedback, and sharing it across departments in their companies.

For instance, once you have registered a complaint with Amazon, you don’t have to keep repeating the problem over and over again. The records of customer complaints are persistently stored in Amazon’s centralized database, and can be accessed conveniently by any customer service executive.

Netflix makes it easy to call them through a toll-free number, and has an extensive “knowledge base” where users can usually find the solution they seek on their own. Their live chat is also known to be quite speedy, helpful, and easy to access since it’s clearly displayed on the website.

Tesla is well-known for providing a hassle-free, personalized customer experience, and they have even started allowing customers to escalate issues to a company executive. Tesla customer reps also communicate with other internal departments to improve the customer experience.

Something like this might not always increase the number of Promoters, but it goes a long way in reducing the outflow of Detractors, thereby improving your Net Promoter Score. It can also cause existing Promoters to act as your brand advocates, and potentially turn Passives into Promoters.

They Provide Single Sign-On Features

Netflix and Amazon are good examples – they let you access all their services using just one credential.

For instance, you can use your Amazon ID to place orders, access AWS services, or purchase books on Kindle. Similarly, you can purchase a single Netflix subscription and use the credentials to stream content from any of your devices.

But, wait… how does a single sign-on implementation improve NPS?

In rather simple terms, NPS is just a metric that evaluates the referability of your brand. The more referable your brand is, the better the NPS score.

By making users remember just one credential for accessing the entire ecosystem, you make the product experience simple and easy-to-use.

The counter-argument to using multiple login credentials has been that it makes the ecosystem secure and less susceptible to malicious attacks. But here’s the thing – should security come at the cost of convenience?

And even if you don’t consider that argument, think about this – if you have multiple login credentials for a single user, how are you going to accurately track customer behavior?

For example, if Amazon used different credentials to access different services, how would it accurately analyze brand advocacy? It’s perfectly possible for user X to love purchasing from Amazon but hate the Kindle experience. If he/she uses different login credentials to access these two services, there’s no way Amazon could accurately map the user’s behavior.

By associating a unique customer ID with every customer, you can accurately measure your NPS score and identify customer behavior (Promoters/Detractors/Passives). You can also personalize features, keep track of customer complaints, and deliver a consistent customer experience.

3. Amazing Customer Service

All these companies with high NPS scores offer a personalized, convenient, and satisfaction-oriented customer experience. People would argue they are some of the companies with the best customer service in the world.

Amazon employs large customer rep teams, makes it very easy for consumers to return items, and goes above and beyond to offer true customer satisfaction – whether it’s by letting people keep the items they accidentally ordered and shipping the right ones free of charge, or refunding small balances of 16 cents to customers when the price of an item they’ve previously ordered decreases.

When Netflix subscribers run into an issue, they know they will be talking with a real person on the other end – their employees are allowed to make their chats funnier and more engaging, which makes them more memorable for customers. Even the CEO would take calls every once in a while.

Starbucks focuses on making people feel like they belong to a community – even going as far as asking customers for ideas, and implementing some of them. For years, Starbucks had a dedicated platform, where customers could submit or vote for the most innovative ideas, which were then put forward to key decision makers. In the first 5 years, their customers generated more than 150,000 ideas and the company implemented 277 of those.

Starbucks baristas are also encouraged to remember customers’ names to make the whole experience feel more personal and create an ongoing customer relationship – a decent move, given that 75% of consumers are more likely to buy from a company that addresses them by name.

They also do not forget about the service basics which every Starbucks’ employee must master to be able to actually exceed expectations, create moments of connection and deliver inspired experiences.

Tesla’s personnel is heavily focused on customer convenience, with some reps even paying customers a visit if they live too far away from a service center. Tesla’s sales reps (also called Product Specialists) are on the company’s payroll and don’t get sales commissions, meaning there is never an incentive for them to pressure buyers to make a purchase.

As for Airbnb, their customer support is really straightforward and well segmented (since they have 2 different users – hosts and guests). The company goes to great lengths to ensure users are happy – even offering a $1 million guarantee for hosts! Here are other examples showing how far Airbnb is willing to go to please their users.

But the main thing that is common across these brands’ customer service departments is this:

Quick, Responsive Omni-Channel Support

All these brands focus on responding as fast as possible to consumer demands and complaints, which is a smart move given that around 32% of consumers expect a response to a complaint or review they left online within 30 minutes.

Besides that, these companies acknowledge the importance of omni-channel support. After all, over 35% of consumers expect to be able to contact a customer rep on any channel. Also, businesses with omni-channel support have over 91% greater year-over-year customer retention rates.

Having support reps answer phones and emails is a nice start, but many customers are likely to contact you on social media, too.

4. Unique, Innovative Products and Offers

Most companies with high NPS scores stand out from their competition by offering consumers a unique value proposition. After all, when you become a unique option within your industry, you’re no longer “another” choice — you’re the only choice many people will consider.

Most of the brands we’re discussing in this article have an innovative value proposition. No online store even comes close to matching the scale of Amazon. There’s no streaming service with a larger range of content than Netflix (although Amazon’s competing service comes close).

Tesla established itself as a huge source of innovation in the automotive market, and Airbnb is the go-to option for city breaks for many people worldwide. While Airbnb did not pioneer a unique concept, they made their brand stand out through unique-looking, engaging website design and by popularizing the idea of guests sharing a place while the host was also there.

As for Starbucks, they certainly didn’t come up with the idea of selling coffee, but they innovated the way it’s sold. As early as 2008, Starbucks publicly announced they were changing the way they made coffee to offer the best possible experience. The company made its brand more appealing and unique by adopting and promoting the homely coffee-house vibe people saw in shows like “Friends.”

One way to achieve such results is to encourage your employees to think creatively. For instance, Netflix encourages employees to come up with ideas about how to improve the company’s services, form groups to discuss said ideas with other employees, and then ask other departments for input. Google is another good example (even though it’s not present in this article), as they allow engineers to spend 20% of their work week on projects that interest them.

Moreover, look for ideas everywhere. That includes listening to your customers and your team. If you are using Net Promoter Score surveys, ask customers how you could improve your product or service when asking for feedback.

Netflix is a good example of what can go wrong if you don’t take customer satisfaction surveys seriously. Long story short, the company’s CEO – Reed Hastings – wanted to change a subscription service that offered access to DVD rentals and unlimited on-demand streaming by splitting it into 2 different services, each priced separately.

That would result in a 60% price hike for customers. When asked how customers might react to this, Hastings said there’d be minor backlash. That was a baseless claim, as no customer satisfaction surveys were performed prior to the decision.

After introducing the price hike, Netflix lost around 800,000 subscribers, and its stock price dropped by approximately 77%. The company obviously recovered, but that mistake almost cost them their business.

We’ve previously written about the importance of NPS for Product Managers, Growth Hackers, and Marketing Managers. We’ve talked about its value for providing valuable customer feedback that gives you plenty of ideas for product innovation. Listen to their thoughts carefully and choose the ones that best fit your needs and goals.

5. High Customer Loyalty and Word of Mouth Advertising

If customer success is the process of orchestrating your customers toward their desired outcome, brand loyalty is the end-result.

Brand loyalty enables you to eliminate price sensitivity, beat the competition and mitigate exorbitant marketing expenses. After all, why spend money on advertising when you can turn your customer’s social capital into your economic capital?

And that’s no speculation. It seems that increasing customer retention by just 5% can boost your profits by up to 25-90%.

NPS is nothing but the measuring scale of customer success, with brand loyalty as the measurement unit. The reason these brands have high NPS scores is because they have succeeded in building up immense brand loyalty:

• Tesla has an almost cult-like following;
• Netflix has the most loyal customers;
• Amazon’s loyalty rates are so good they eat into competitors.

Companies with a high NPS score have a lot of customers who love their brands so much they are more than willing to recommend them to their friends and family.

As a result, companies like Amazon, Airbnb, and Tesla have people doing marketing for them at no extra cost – bringing in more potential customers who already view the brand in a positive light. After all, around 74% of consumers say that word-of-mouth advertising is a key influencer on their purchasing decisions.

How do these companies achieve something like this? Well, here are the main things they do:

They See Consistency as the Main Key

Once you’ve created a unique product experience that people want to talk about, the next step is to be consistent in your efforts. After all, it takes months to win a customer, but only seconds to lose one.

Amazon provides great customer experiences, regardless of the size and frequency of your order. It doesn’t matter whether you order from the app or through the website – the shopping experience stays consistent.

Netflix lets you stream your favorite movies or shows at the same speed, regardless of your device, the movie genre, the time, or location. Tesla has consistently raised the bar in terms of product innovation, and has always made sure all their customers benefit from car redesigns, like when they changed the seats for all Tesla cars free of charge to improve owners’ comfort levels.

When a company consistently delivers great customer experience, they infuse customer loyalty and motivation to talk about those experiences.

They Offer a Personalized Customer Experience

Don’t underestimate the power of a personalized experience for consumers. According to statistics, 78% of online consumers say that personally relevant content from brands increases their purchase intent, and personalization can reduce acquisition costs to as much as 50%.

Also, according to Genesys Global Survey, 38% of customers believe personalization plays a vital role in delivering happy customer experiences.

How do companies with high NPS scores handle this?

Well, Netflix uses the power of AI and machine learning analytics for personalized video recommendations. Tesla’s buying process is very personal for consumers, and Starbucks’ loyalty program is focused on offering personalized rewards and offers. Plus, we already mentioned that Starbucks employees are encouraged to address customers by name and tailor their interactions to the individual customer.

And Airbnb is already looking into adopting machine learning so that they can offer users a more personalized travel experience.

All in all, personalization makes customers feel that you’re delivering a one-to-one customer experience, thereby improving user engagement and customer satisfaction. And it’s only logical that these happy customers are more likely to recommend your brand than unhappy customers.

They Build Up Their Reputations

According to the paradox of choice, customers feel less anxious when they have fewer choices to make.

For example, you would rather order stuff from Amazon than take the risk of trying a new online store. It’s because Amazon has built up the reputation of being the #1 online marketplace. Tesla has built its reputation as the most reliable provider of electric cars, and Netflix has its reputation as the streaming platform with the biggest content variety.

Starbucks at its turn, has built a reputation as a coffee mega-chain by standing true to more than 40 years of heritage and infusing the human connection into its strategy; as well as for their ongoing commitment to give back to communities through community stores or by encouraging local volunteering. 

Reputation is about building customer trust so that they feel comfortable sharing information and transacting on your platform.

It’s the most vital ingredient for brand loyalty because customers are unlikely to recommend brands that have a bad reputation or are not trustworthy.

They Focus on Accountability

“Divide responsibility and nobody is responsible.” – Edward Deming

Amazon has managed to practically kill ‘brick-and-mortar’ businesses by instilling great accountability into their business model. For instance, you can order anything from Amazon, and return it within 15 days if you don’t like it. If that’s not enough, Amazon even refunds customers the price-difference on items they recently bought.

Airbnb, like we already mentioned, offers hosts a $1 million guarantee. When Netflix changes pricing plans, they give existing members a price guarantee for a certain time, letting them use the pricing plan they initially chose. And Starbucks goes as far as offering a 60-day guarantee for its products.

Basically, people buy from businesses that have high accountability and credibility, as it reduces buyers’ anxiety and makes them confident about making future purchases.

They Capitalize on Employee Satisfaction

“You can’t expect your employees to exceed the expectations of your customers if you don’t exceed your employee’s expectations of management.” – Howard Schultz, Chairman and CEO at Starbucks

There is little to no chance of amazing customer experiences without happy and proactive employees that will go above and beyond. Only engaged and motivated employees can be committed to a company’s success.

Looking into the numbers, highly engaged teams achieve a 10% increase in customer ratings and a 20% increase in sales. They are more productive, relate better with customer needs, and hence are better at engaging and retaining customers. Summed up, these capabilities result in 21% higher profitability. 

Starbucks understood in their early days the huge impact employee satisfaction has on the overall customer perception of a brand. With the creation of the Bean Stock in 1991, Starbucks  made their employees partners, giving them ownership in the company, sharing the company’s success and thus strengthening their relationships.

Moreover, Howard Schultz vowed to leave no one behind – commitment that stemmed from his childhood experiences. This instilled a vision to treat people like family who at their turn would pour their heart into making the company better.

This vision led Starbucks to create one of the most competitive benefits and compensation packages. They have communication systems in place like Ethics & Compliance Helpline – a line which is open for calls around the clock for partners to share their concerns anonymously. 

To let partners know they are deeply valued, Starbucks set up various recognition programs and awards such as Coffee Master Awards, Spirit of Starbucks or Bravo! awards for exceeding customer service standards or increasing sales.

According to Airbnb, a world where anyone can belong anywhere starts with a workplace where you feel welcome. Every effort in terms of employee satisfaction is thus directed towards creating amazing physical, emotional, intellectual, virtual and aspirational experiences for the Airbnb staff. 

The brand opted for a shift from Human Resources to Employee Experience, an approach pioneered by Mark Levy – former Global Head of Employee Experience at Airbnb – and his team. The impact of such an approach is reflected by great employee satisfaction levels, with 90% of Airbnb employees recommending the company as a great place to work at.

Amazon was ranked #2 on Forbes World’s Best Employers 2020 list. During the COVID crisis, on top of the $15 minimum wage and other benefits, they launched new initiatives like developing their COVID-19 testing capacity and launching a $25 million relief fund to support partners during the crisis.

Promoter companies continue to put all their effort into the team’s well-being, aware that happy employees create the best customer experiences. eNPS surveys are great for this purpose, since they allow you to keep a pulse on employee satisfaction at all times. Starbucks for example runs a Partner View survey yearly to learn more about employees’ concerns and their satisfaction with their job.

Want to Find Out What Your Own NPS Is?

Before you start making any policy and service/product changes, it’s best to find out roughly how many Detractors, Passives, and Promoters you have, so that you attempt adjustments that really matter to your customers.

You might think that finding out the NPS score of your company can be difficult, but it doesn’t have to be – if you use an automated platform like Retently. We make it very easy to send targeted NPS surveys to your customers by giving you the ability to segment them into different categories.

Also, Retently lets you customize your surveys to your heart’s content, set up automation scenarios, and survey customers through multiple channels – like email or in-app surveys. Best of all – you can integrate our platform with other services you use to automate the feedback-gathering process even further.

So, feel free to browse our plans and see which ones work best for you.

The post What Do Companies with High Net Promoter Score Have in Common? appeared first on Retently CX.

Table of Contents

• Key Takeaways
• Track Customer Transactions via Zapier
• How to Set Up a Transactional NPS Survey With Retently
• Ideal for SaaS and Ecommerce Businesses
• Efficient Transactional Scenarios

A great advantage of the Net Promoter System, aside from its simplicity and insightfulness, is that it works with any business models, such as B2C or B2B, and any business type and industry.

Originally, the NPS surveys were sent at standard intervals, such as every quarter, once every six months and so on. This surveying model is known as Relationship NPS, which measures how your customers’ satisfaction changes over time. This model would fit any company that wants to implement a basic Customer Success strategy.

But there are companies that are constantly changing their products or services and they need to track customer sentiment at a much higher frequency. Moreover, since they are fast-changing companies, each update within their product line is most likely to change customers’ attitudes towards them, therefore they needed to send surveys for each customer touch-point, such as new order placed, each payment made, free trial endings, etc. This model is called Transactional NPS, which basically means triggering a survey after each customer transaction and measuring how their satisfaction was influenced by it.

We have previously discussed the differences between Relationship and Transactional NPS, and today we’re going to explain how to set up a Transactional NPS campaign in Retently, through our native Zapier integration.

Key Takeaways

1. Retently’s Zapier integration automates surveys triggered by specific customer actions in other services, providing timely feedback after key transactions like purchases or subscription changes.
2. Retently connects with over 7,000 apps via Zapier, enabling custom survey triggers through services like Google Sheets, MailChimp, Salesforce, Shopify and Intercom.
3. Transactional NPS is perfect for SaaS and Ecommerce businesses, capturing feedback at crucial touchpoints like trial endings and order deliveries to enhance customer satisfaction.

Track Customer Transactions via Zapier

Zapier is a popular service that allows you to automate tasks between 7,000+ applications out there. Simply put, it is an intermediary automation service that tracks certain events or customer touchpoints in a web application and triggers a specific action in one or more other services based on them.

Our customers at Retently have been using the Zapier integration to automatically import new customers from services we do not provide native integrations for, send Transactional NPS surveys, export customer NPS scores and feedback and manage team tasks.

One of the main differences between Relationship and Transactional NPS is that the latter doesn’t limit the number of surveys you can send. So each time a customer performs a specific action, they will receive a survey, and it might happen a couple of times a day. That’s why we highly advise you to leverage Retently’s built-in throttling feature to handle repeat events.

Throttling allows you to control how often surveys are sent to the same customer. For example, if a customer has already received a survey in the last 30 days, you can choose to hold off on sending another one right away. This way, your feedback requests are timely and considerate.

Now, let’s see how Zapier and Retently integration can transform your NPS strategy:

Automate Transactional Surveys

Automating your transactional surveys with Zapier makes the whole feedback process smoother and easier. Instead of manually sending surveys after a sale, a project milestone, or a customer support interaction, Zapier does it for you.

This not only saves you time but also reduces human errors, ensuring you collect feedback consistently. Plus, with real-time automation, you can act on feedback right away, spot areas for improvement and let your team focus on more strategic initiatives.

Customize and Filter Your Surveys

Zapier gives you plenty of options to customize your Transactional NPS campaign. You can set up specific triggers that match your business goals, and use Zapier’s filters to make sure only the most relevant customers get surveyed. This way, you can target key touchpoints without cluttering your list with unnecessary contacts.

For example, instead of surveying everyone who triggers an event, you can filter it down to focus on those who matter most to your feedback strategy. This flexibility helps personalize your NPS campaigns and target interactions that are most likely to impact customer satisfaction.

Analyze Transactional NPS Data

Once the Transactional NPS surveys are sent and responses collected, analyzing the data is essential. Look for patterns in feedback related to specific transactions or customer touchpoints. By segmenting responses based on different triggers, you can pinpoint which interactions drive positive or negative feedback and prioritize improvements accordingly. This data-driven approach helps boost customer satisfaction by refining product offerings and service delivery.

Avoid Survey Fatigue

While Transactional NPS is great for regular feedback, too many surveys can overwhelm your customers. To prevent this, carefully map out the customer journey and strategically place your survey triggers at key touchpoints rather than every minor interaction.

Retently’s throttling feature is a big help here. It lets you control how often surveys go out to the same customer so they don’t get flooded with requests. You can also keep things fresh by offering small incentives or making the survey easy to complete. This keeps your feedback flowing without annoying your customers.

How to Set Up a Transactional NPS Survey With Retently

To get started go to your Zapier account and create a new Zap. In the Trigger section of your Zap, you will be asked to choose a service that will provide customer transaction data.

The next step is to choose a trigger. Each service will provide a different set of triggers, but the most common are:

• New customer/contact
• Updated customer information
• New order
• Unsubscribed customer

After you’ve set up your trigger, you will have to edit the Actions section of your Zap. Choose Retently as your action app and the action you need next is “Send an Email Survey”.

The next step will ask you to connect and authorize your Retently account.

Moving forward, you’ll need to choose a Retently survey campaign the customer will be surveyed in, and then map the customer data. This basically means selecting which data from the chosen trigger you want to import to Retently along with the customer.

After you’ve enabled your Zap, each time a customer performs the chosen trigger, he will be added to Retently and surveyed right away.

Ideal for SaaS and Ecommerce Businesses

The Transactional NPS model is a perfect fit for subscription-based services and online stores because their customers are constantly engaging with their products and each interaction has a certain level of influence on their satisfaction.

• SaaS: Send a survey to customers who have just ended their Free Trial and collect valuable feedback that will help you improve your product for newcomers. Another great scenario is to survey customers who chose to upgrade their subscription and learn what they like most about your service. Or on the contrary – you can send surveys to customers who downgraded their subscription or canceled it altogether to find out what was disappointing for them.
• Ecommerce: Send a survey each time a customer orders a new item, or after their order has been delivered to learn more about the quality of your services and especially how the order was handled by intermediary services or local divisions of your company. Send surveys to collect feedback after an order was canceled or funds were refunded. Another great idea is to survey a customer after the support ticket was closed and see how satisfied is he with your customer support team.

Efficient Transactional Scenarios

Retently offers native integrations with a variety of tools to help businesses automate and optimize their customer feedback collection. These integrations allow you to easily trigger surveys, gather feedback at key moments, and analyze customer satisfaction – all within the Retently platform. For example, you can connect:

• Salesforce to automatically send surveys when new leads, contacts, or opportunities are created.
• Shopify to trigger feedback requests based on customer actions such as new orders or abandoned carts.
• Intercom to collect feedback during customer interactions, like new conversations or user sign-ups.
• Zendesk to automate surveys following support ticket resolutions or property changes.
• Pipedrive to capture customer insights at critical points in your sales process, such as deal closures or stage changes.

However, while these built-in integrations are robust, some platforms, like Salesforce or Shopify, are so complex that covering every possible use case can be challenging. Zapier fills the gaps by connecting Retently with plenty of apps, allowing you to build custom workflows tailored to your exact requirements. 

Below we’ve listed some popular services and their triggers for an efficient Transactional NPS campaign.

NetSuite

NetSuite is a comprehensive cloud-based ERP platform that streamlines business processes across financials, operations and customer management. With Retently, you can automate key interactions within NetSuite to enhance your Transactional NPS campaigns:

• New Customer Record: Triggers a survey when a new customer is added to NetSuite.
• Sales Order Fulfilled: Sends a survey when a sales order is fulfilled, capturing feedback on the order process.
• Invoice Issued: Initiates a survey when an invoice is issued, allowing you to gauge customer satisfaction with the billing process.
• Customer Payment Received: Launches a survey when a payment is received, helping you understand the payment experience.
• Customer Record Updated: Sends a survey when a customer’s record is updated, ensuring ongoing satisfaction.
• Sales Order Created: Triggers a survey when a new sales order is created, capturing initial customer impressions.
• Customer Support Case Closed: Initiates a survey when a customer support case is closed, gathering feedback on the resolution.
• Quote Approved: Sends a survey when a quote is approved, assessing the sales process.

Try NetSuite – Retently Zap

Zoho

Zoho is a versatile suite of cloud-based applications that manage everything from CRM to finance, email, project management, and customer support. With Retently, you can automate key interactions within various Zoho apps to enhance your Transactional NPS campaigns. Here are examples of how each Zoho product can integrate with Retently:

Zoho Projects:

• Task Completed: Trigger a survey when a task in a project is marked as complete to gather feedback on project milestones.
• New Project Created: Send a survey when a new project is initiated to understand initial expectations and satisfaction.
• Milestone Achieved: Initiate a survey when a project milestone is reached to capture feedback on progress and client satisfaction.

Try Zoho Projects – Retently Zap

Zoho Mail:

• New Email Received: Trigger a survey when a specific email is received, such as a confirmation or inquiry email, to capture immediate feedback.
• Email Sent: Send a survey after sending an important communication to gauge the effectiveness of the message.
• New Contact Added: Initiate a survey when a new contact is added through email, helping assess first impressions.

Try Zoho Mail – Retently Zap

Zoho Connect:

• New Post in Channel: Send a survey when a new post is made in a specific Zoho Connect channel, collecting feedback on team communication.
• New Event Created: Trigger a survey when a new event is added, capturing expectations or post-event feedback.
• Task Assigned: Initiate a survey when a task is assigned in Zoho Connect, assessing clarity and communication.

Try Zoho Connect – Retently Zap

Zoho Creator:

• New Record Created: Trigger a survey when a new record is created in Zoho Creator, capturing feedback related to form submissions or data entries.
• Record Updated: Send a survey when an existing record is updated, gathering insights on changes or updates.
• Workflow Executed: Initiate a survey after a specific workflow is executed, measuring the effectiveness of the process.

Try Zoho Creator – Retently Zap

Zoho Show:

• Presentation Published: Send a survey when a presentation is published or shared, collecting feedback on the content and presentation quality.
• Slide Updated: Trigger a survey when a slide in a presentation is updated, ensuring satisfaction with revisions.
• New Collaboration Started: Initiate a survey when a new collaboration is started on a presentation to assess team feedback and involvement.

Try Zoho Show – Retently Zap

Zoho Desk:

• Ticket Closed: Trigger a survey when a support ticket is closed to gather feedback on the resolution process.
• Ticket Created: Send a survey when a new support ticket is created, assessing initial customer concerns.
• Customer Response Received: Initiate a survey when a customer responds to a ticket, capturing insights on their experience.

Try Zoho Desk – Retently Zap

Zoho Campaigns:

• Campaign Sent: Send a survey after an email campaign is sent to gather feedback on the campaign content.
• New Subscriber Added: Trigger a survey when a new subscriber joins a list, assessing their first impressions.
• Campaign Opened: Initiate a survey when a campaign email is opened to gather feedback on engagement and interest.

Try Zoho Campaigns – Retently Zap

Google Sheets

If all your customers are kept in a Google sheet rather than a cloud-based CRM service, then you can send surveys whenever they perform one of the following actions:

• New Spreadsheet Row: Triggered when a new row is added to the bottom of a spreadsheet.
• Updated Spreadsheet Row: Triggered when a new row is added or modified in a spreadsheet.

Try Google Sheets – Retently Zap

MailChimp

MailChimp is a great email marketing automation service and few of the basic triggers it offers will do a highly efficient Transactional NPS campaign. Here’s a list of the most common triggers:

• New Subscriber: Triggers when a new subscriber is added to a list.
• New Unsubscriber: Triggers when any current subscriber unsubscribes from a list.
• Updated Subscriber: Triggers when a subscriber is added or updated in a list.

Try MailChimp – Retently Zap

Eventbrite

Eventbrite is a platform that helps users create, manage, and sell tickets for events. By integrating Eventbrite with Retently, you can automate feedback collection at key stages of your event management process. Whether you’re organizing events or managing attendees, this integration ensures you capture valuable insights from participants and organizers alike. Here’s how you can leverage this integration:

• New Organizer Created: Send an NPS survey or add a contact when a new organizer is set up.
• Attendee Check-In: Trigger a survey when attendees check in to an event.
• New Order Placed: Send a survey when a ticket order is placed.
• New Attendee Registered: Automatically initiate a survey when a new attendee registers.
• New Event Created: Send a survey when a new event is launched.
• Attending a New Event: Trigger a survey when you purchase tickets for an upcoming event.

Try Eventbrite – Retently Zap

Jira

Jira, a widely used project management and issue-tracking tool, integrates seamlessly with Retently to automate customer feedback collection at critical points throughout your workflow. Here’s how you can use this integration:

• New Priority Set: Trigger a survey or add a contact when a new priority is established.
• New Issue via JQL: Send a survey or add a contact when a new issue matching JQL criteria is created.
• Project Created: Trigger a survey or add a contact when a new project is added.
• New Issue Type Added: Send a survey or add a contact when a new issue type is introduced.
• Issue Updated: Trigger a survey or add a contact when an issue is updated.
• New Issue Created: Send a survey or add a contact when a new issue is added to a selected project.

Try Jira – Retently Zap

Create Your First Transactional NPS Campaigns With Retently

You can start to set up and launch your first Transactional NPS campaign with Retently. Sign up today for a 7-days Free Trial and start collecting more insightful and relevant feedback.

The post Send Your Transactional Surveys Using Retently’s Zapier Integration appeared first on Retently CX.