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Transcript
- Lucas: So here's a question that sounds deceptively simple: on a scale of zero to ten, how likely are you to recommend this product to a friend? Luna: Ah, the Net Promoter Score. Every brand asks it. Very few actually do anything useful with the answers. Lucas: Right. NPS has been around since 2003, introduced by Fred Reichheld at Bain. And it's become this weirdly polarizing metric. Some marketers swear by it. Others dismiss it as a single data point that tells you nothing. Luna: I've been in both camps. What changed your mind? Lucas: The data. Companies that score in the top quartile of NPS within their industry grow at more than twice the rate of bottom-quartile companies. That's from a Bain study covering hundreds of firms over a decade. When it's done right, NPS correlates with revenue growth. Luna: But correlation isn't causation. And there are famous counterexamples — like Peloton. Lucas: Perfect example. Peloton's NPS was consistently in the 70s and 80s — elite territory. And yet, in 2022, their revenue cratered. So what happened? Luna: They had loyal users but not enough new customers. The metric was measuring existing love, not market expansion. Lucas: Exactly. NPS predicts retention and referral behavior, but it doesn't tell you if your addressable market is shrinking. Peloton's promoters were recommending the bike to friends who already had one. The score stayed high while the pool dried up. Luna: So the problem wasn't the metric. It was how they interpreted it. Lucas: Right. Which brings us to the real power of NPS: the open-ended follow-up. 'Why did you give that score?' That's where the gold is. Not the number — the reason behind it. Luna: And that takes work. Most companies just send the survey and file the results. They don't close the loop. Lucas: Closing the loop is the whole point. When a detractor gives you a 4 because your checkout process was confusing, you don't need a dashboard — you need to fix the checkout. And you need to call that person and say, 'We heard you, here's what we changed.' Luna: That's where the real compounding happens. You convert detractors into passives, passives into promoters. And promoters refer. Lucas: Tesla is the classic case. Their NPS is off the charts — mid-90s in some surveys. And they've famously spent almost nothing on advertising. Their customer acquisition is almost entirely word of mouth driven by promoters. Luna: But even Tesla's score is controversial. Critics say EV owners are a self-selecting enthusiast group. The score would be different if you surveyed the general population. Lucas: Fair. But that's true of any brand's NPS — it measures sentiment among people who already engaged. It's not a market awareness score. It's a loyalty score. Luna: So if a startup asks me whether they should track NPS, I'd say yes — but only if they commit to the follow-up process. Lucas: One hundred percent. And I'd add: don't just track the score. Track the verbatim feedback and categorize it. Common themes — pricing, features, support — those become your product roadmap. Luna: You know, I recently read that the average response rate for NPS surveys is around 30 percent. So you're only hearing from a third of your customers. Lucas: That's why sample size matters. If you have a thousand responses, 30 percent is plenty. But if you have fifty, the margin of error is huge. You can't make strategic decisions off fifteen completed surveys. Luna: And there's the B2B problem. In B2B, the buyer isn't always the user. So who do you survey — the procurement manager or the actual daily user? Lucas: That's a real tension. In B2B, you might need separate NPS surveys for different roles. The CFO might give a 10 because of ROI, but the admin who uses the software daily gives a 4 because of UX. Both matter. Luna: So NPS isn't one number. It's a system of numbers. Lucas: Exactly. And if you're a small business, you can do this with a simple spreadsheet and a five-minute phone call to your detractors each month. It doesn't require a six-figure platform. Luna: Honestly, if today's episode helped you think about your customer feedback loop in a new way, that's exactly the kind of thing that keeps this show running without ads. Lucas: Yeah, listener support is what makes Marketing Made Simple possible. If you found value, you can buy us a coffee at buy me a coffee dot com slash fexingo. Luna: And we mean it. One coffee. That's it. No tiers, no perks, just knowing you're helping keep this ad-free. Lucas: So — back to the systems. Another mistake I see: companies that benchmark their NPS against the wrong industry average. A grocery store with a 40 is doing fine. A luxury hotel with a 40 is in trouble. Luna: Context is everything. What's a good NPS for a SaaS company? Lucas: Above 30 is average. Above 50 is great. Above 70 is world-class. But again — industry matters. Tech tends to score higher than insurance. And B2B software averages around 35, while consumer apps average higher. Luna: I've also seen brands game the system. They ask the question right after a successful support interaction, so they get artificially high scores. Lucas: That's survey timing bias. The best practice is to send NPS surveys at regular intervals — quarterly or biannually — not right after a specific touchpoint. That gives you a relationship score, not a transaction score. Luna: And what about the passive category — scores of 7 or 8? They're often ignored. Lucas: Big mistake. Passives are vulnerable. They're satisfied but not enthusiastic. A competitor with a slightly better feature or price can flip them. You should have a strategy to convert passives into promoters. Luna: Like what? Lucas: Follow up. Ask what would make it a 10. Often it's something small — a tutorial, a faster response time, a feature request. If you can deliver that, you've just created a promoter. Luna: So NPS is less about the score and more about the discipline of listening and acting. Lucas: Exactly. And that discipline compounds. Companies that consistently close the loop see their NPS improve by 10 to 20 points over a couple of years. That translates directly to retention and referrals. Luna: I think the biggest takeaway for me is: don't let perfect be the enemy of good. Even if you only survey a sample, even if your response rate is 30 percent — it's better than guessing. Lucas: Absolutely. And if you're just starting, keep it simple. One question. One open-ended follow-up. One call to a detractor each week. That's enough to start building a customer-obsessed culture. Luna: Alright, I'm going to go look at our own NPS data with fresh eyes after this. Lucas: Good. And if you find a detractor, pick up the phone. It might be the most important marketing call you make all week.