When Should You Measure Net Promoter Score (NPS)?
You may have been hearing a lot about how important it is to track your Net Promoter Score. But do you know when is the right time to measure it? Never fear, because you can read on to find out!
The importance of NPS
Sorry! We’re going to reiterate how important it is to measure NPS one more time. Your brand’s NPS represents your customer’s overall perception based on their entire product journey including initial marketing and engagement, the sales and purchase process, billing and account management, product use and post purchase interaction such as customer support and service. Because of this, it is considered a key measurement tool for companies of all sizes and all stages of growth.
Smaller or newer companies that are just building up their customer base should be focused primarily on growth. These companies typically have smaller customer bases and with the growth of online product review and social media sites, can be much more deeply affected by negative NPS. In turn, this can severely impact their growth potential. On the other hand, larger companies with corresponding larger customer bases are more likely to withstand some negative NPS and can measure the effectiveness of their customer retention efforts.
When to start tracking NPS
Since NPS is important for measuring both customer growth potential as well as customer retention efforts, it should therefore be adopted as early as possible in the company’s life cycle and measured on a continual basis. You also will need to decide when to first engage your customers. There are some general rules to go by when executing NPS measurement programs to ensure the results are as reliable and as actionable as possible:
- Do not batch survey your customers all at once. Instead, survey customers at some particular trigger point in their product journey (for example, 30 days after product purchase). This will ensure that all customers are responding at similar points in their overall experience with your product.
- While it is usually a good idea to survey your customers after initial product interaction (to measure their initial sentiment), avoid sending a survey too soon after the initial purchase as customers need some time to first experience and form an opinion about the product.
- For similar reasons, it is a good idea to avoid surveying during or close to positive or negative product events, such as a new feature release or a support down-time event, as these are likely to bias your NPS results.
NPS data collection frequency
There are several market factors, such as evolving customer needs, product experiences and expanded competitive offerings, which can change very quickly. Because of this rapidly changing market landscape, it is important to continually track your NPS. You should adopt a regular NPS data collection and measurement schedule, however the actual data collection frequency will depend on a few key factors.
First of all, bigger companies with a large customer bases may choose to survey their customers and collect NPS data on a quarterly or perhaps even a monthly basis. It is also a good idea for companies to do more frequent NPS surveys if their product offering changes frequently (for example, new features are added often). Companies with products that do not change much or with smaller customer bases may choose instead to conduct NPS surveys only once or twice per year. In either case, a general rule of thumb for NPS surveying is to not survey the same customer more that twice in the same year. You should always be conscious of over-surveying your customers as this generally results in a negative overall impact on NPS.
Another factor which should be considered is the company’s life cycle stage. For example, a company in the earlier stages of the company life cycle will likely have a smaller customer base and would therefore be surveyed less frequently. Lastly, only survey at intervals for which you have the time and resources to analyze and act on the data.
About Tim Ali
Tim has over 18 years experience in quantitative and qualitative market research, database design/SQL programming, and business intelligence solution development. He studied market research, statistics, operations research and database design and holds a Bachelor’s degree in marketing and a Master’s degree in management science from Cal State University, Fullerton.