Whether it's to improve product features or how your team interacts with customers, the most valuable insights will come directly from the horse's mouth. Net Promoter Score (NPS) is one of the best ways to measure how happy your customers are with your product or service. That being said, it's not always clear how to make your NPS score actionable.

The difficulty lies in the way NPS is measured: customers' happiness is based on a simple, no-nonsense formula. However, happiness is complex.

Boiling this down further to a single number can sometimes leave you with more questions than answers:

What is my NPS score actually measuring? What's is its true value to my business? And, how should I apply it?

I've found that NPS is most valuable if it's considered an indicator. It's shouldn't be an end-all-be-all. Here's how I approach getting the most out of our NPS, and how it helps shift our focus towards better service, better feedback loops and a better experience overall.

Define What Success Means And Move From There

Success for us meant benchmarking our NPS score and moving upward from that point. We admitted we wanted to see other companies' numbers (who doesn't, right?). People are competitive. But was getting a higher score than another company worth investing time and energy in?

This was a question our team needed to reflect on and answer. We decided it shouldn't be our focus. Why?

Our main goal, always, is retention. But higher scores don't necessarily correlate to higher retention (more on this later).

That's why we shifted our focus to use NPS as an indicator: to focus more on better service, better feedback loops, and a better experience overall. And that started with everyone being on the same page.

You Can't Track Movement Until You Have A Clear Starting Point

For this reason, our strategy for benchmarking our scores began from the inside-out.

Our first move was internal. We included an NPS question on a quarterly survey for our community.

Then, we sent out an NPS survey to our client base (external) over a 3 week period. I was surprised at how drastically different the response rates were. Our internal response rate was 80%, while our external response rate was in the single digits. Yikes.

A few major differences: our internal survey was anonymous, within a larger survey, and completions were put into a drawing for a prize. In contrast, our external survey was not anonymous, was sent as an individual message, and the incentive was just extra effort for our clients (giving their thoughts and feedback).

What We Learned From Benchmarking An Internal Vs. External Score

Looking back, of course our internal response rate was much better: We gave them a clear action with direct incentives in a format they wanted to respond in. For our clients, however, it was just extra effort on their end. Something hardly anyone has time for.

We put ourselves in our clients' shoes to see why there might have been such a low response. For starters, there were multiple contacts working in different capacities and not all of them were engaging with us every day. We came up with key questions to guide us:

1. How can we align ourselves with our clients in a way they care about about that won't cause them extra work?
2. How can we work into our client's processes instead of forcing them to work inside ours?

Why NPS Suggests But Never Tells

There were a few indicators that reflected NPS works as a suggestion but lacks perfect accuracy.

For instance, certain clients were referring accounts to us, though they had never responded to our NPS email. From an NPS perspective, a no-response might look like a detractor. But in this case, the detractor was actually referring clients to us.

Alternately, we also found that a client who responded positively about referring an account didn't always translate to retention. We have clients that are big proponents for us and refer their friends, while they themselves don't have product-market fit or get acquired and can no longer use our service.

Another insight, but on the internal side: when we separated out the "management" level from the "team member" level, we found that our managers had a higher NPS score than team members. As to be expected, managers have a higher level of engagement, but this data is an insight for our operations team to work on engagement within the team member level.

Why do I look at these together? Benchmarking both client happiness and internal team happiness go hand in hand. When your internal team is working well, that experience translates externally to clients.

To Summarize

When using NPS, make sure you and your team define what success looks like, and use NPS to help track this.

Benchmark your score, set goals for upward movement, and then discover insights from what the data is telling you.

Are you tracking both internal and external NPS? I'd love to hear your insights!