The Importance of NPS Surveys and Mastering the Basics in Building Products

The Importance of NPS Surveys and Mastering the Basics in Building Products

Net Promoter Score (NPS) surveys have become a popular tool in understanding customer satisfaction and loyalty. However, their effectiveness in building products can be subjective. While NPS offers a directional insight, it does not provide a complete story. In fact, only 31% of respondents found NPS surveys helpful in this regard. This is not surprising, considering that NPS is often treated as a "single source of truth" within organizations, despite being a numerical representation of qualitative data.

To truly understand customers and build better products, a holistic approach is necessary. NPS surveys can be just one tool in a larger toolkit of surveys that capture various aspects of the customer experience, such as demographics, competitive product usage, and entertainment preferences. At Netflix, for example, NPS data was collected but rarely used. Instead, they relied on a more reliable proxy metric for product quality - the percentage of members who canceled each month. This metric, which measures customer retention, provides a clearer indication of product quality as it reflects what customers actually do, rather than what they say.

Even within NPS surveys, there are interesting insights to uncover. For instance, Netflix's experience in South America revealed that while the NPS score was high, customer retention was poor. This discrepancy was attributed to cultural differences, with Brazilians being more generous "graders" compared to Australians and Germans. This demonstrates that NPS should not be taken at face value and that qualitative analysis is crucial for forming hypotheses and guiding future experiments.

In addition to understanding customer sentiment, it is important to never overlook the basics when building products. Scott H Young emphasizes the significance of mastering the elemental components of any skill. Just as coding has commands, painting has brushstrokes, and comedy has jokes, mastery of the performance stems from mastery of these foundational elements. It is often the basics that matter most, yet they are often neglected due to their obviousness.

Returning to the basics can be achieved through various strategies. One approach is to change the environment in which you practice your craft. By altering the context, you can force yourself to focus on the fundamental components and improve your overall skill. Another effective strategy is to redefine your goals and set a different standard for what you want to produce. This shift in mindset will require you to adapt your actions and ensure that you are continuously honing your foundational skills.

Furthermore, analyzing and reflecting on your work after the fact can reveal areas for improvement. By observing your performance and critically assessing your execution, you can identify gaps in your mastery of the basics. This self-reflection allows you to make necessary adjustments and refine your skills.

In conclusion, while NPS surveys provide an easy-to-understand signal of customer sentiment, they should not be solely relied upon in building products. Instead, they should be part of a comprehensive survey toolkit that includes various data sources. Additionally, mastering the basics is essential for skill development and product excellence. By focusing on the elemental components of your craft and continuously improving, you can elevate your performance and deliver exceptional results.

Actionable Advice:

1. Embrace a holistic approach to understanding customer sentiment by incorporating various survey tools in addition to NPS.
2. Analyze customer retention rates as a proxy metric for product quality, as it reflects customer actions rather than just their feedback.
3. Prioritize the mastery of the basics in your craft by changing your environment, setting different goals, and reflecting on your work after the fact.