Author Archives: Dana Severson

About Dana Severson

Dana Severson is the Director of Marketing at Promoter.io and cofounder of Startups Anonymous. Former founder & CEO of Chasm.io/Wahooly and AngelPad Alum. In addition to focusing on growth at Promoter, Dana is a weekly columnist for Inc.com

LiveChatHero

How LiveChat Used Customer Loyalty To Grow To Nearly 19k Customers (without spending money on sales and marketing)

One of the most common reasons why companies decide to start measuring their Net Promoter Score is to understand the precise needs of their customers and to be able to address each one on an individual basis. The net result is most often an increase in customer retention and an overall improvement in customer loyalty.

At the end of the day, customer loyalty is the ultimate goal for EVERY company. With St. Patrick’s Day right around the corner, you could say it’s the equivalent of the pot of gold at the end of a rainbow.

Customer loyalty isn’t always easy to attain however. It’s only achieved when a company can exceed the needs and desires of their customers. This means an exceptional customer experience along with a superior product.

 Exceptional Customer Experience + Superior Product = Customer Loyalty #NPS #Custserv Click To Tweet

Since loyalty is tied directly to the customer’s overall experience, we often see that NPS becomes a tool most utilized by customer support or customer success teams.

The other half of Net Promoter is growing your business through advocacy (i.e. your loyal customers). This is one of, if not the most lucrative benefits of measuring NPS. For most companies, it’s the added bonus to increasing customer loyalty and retention. But for a marketing department, it’s an all-access channel to increasing revenue without expense.

Most companies don’t start measuring NPS as a marketing initiative, but that’s not the case with LiveChat.

LiveChat is a fast-growing customer success software with offices based in both the US and Poland whose name aptly describes exactly what the company does — provides a tool for chatting with customers in real-time (or live) while they are on your site.

Since pivoting from an on-premise software solution to a SaaS solution in 2010, LiveChat has been on a strong growth trajectory. As of today, they serve almost 19,000 customers, adding 400 net new customers per month! What’s more, they’ve grown without spending any money on outbound marketing or sales.

While most SaaS companies are investing heavily in Facebook ads, SEM (search engine marketing), PPC (pay per click) and internal sales teams, LiveChat has been focusing exclusively on inbound channels — SEO, branding, content and … NPS.

At LiveChat, NPS lives within the marketing department. Their focus is on solving customer issues to increase loyalty (and preventing negative word of mouth) as well as leveraging promoters for growth.

What makes their approach unique is the fact that they treat NPS as a marketing initiative first.  

However, unlike the natural approach of most marketers, they still respond to each and every customer personally, without the use of automation (the way it should be done).

In most cases, when someone identifies themselves as a promoter, the LiveChat team will engage with that customer through a personalized message along with a direct request for a referral or asking them to leave a review on one of the many sites they use — G2 Crowd, Capterra, TrustPilot, etc.

Activating Your Promoters

As we’ve mentioned in previous posts, roughly only 20% of your total promoter base is actively endorsing your brand and/or referring new customers your way. Activating the other 80% of your promoters is often times as easy as simply engaging with them with specific requests. You could be asking for a referral or a review as LiveChat does. The fact is, EVERY one of your promoters have already indicated they’d recommend you to others, you just need to guide them on how best to do it.

“We’ve identified and know that a large number of our new customers come in as a result of the many customer reviews we have out there.” – Daniel Zieliński

LiveChat’s customer engagement doesn’t just end with an ask though. Daniel Zieliński, who heads up their NPS initiative originally came from a customer success role, so he understands the importance of closing the loop with each and every customer.

In the case of detractors and passives, Daniel will initially engage with the customer in an attempt to initially solve their problem and prevent any negative public comments. He’ll then pass the discussion along to the customer success department to ultimately resolve any larger issues.

Promoters can be more than a recommendation

Often times companies will take promoter feedback at face value without digging deeper. In most cases, a promoter may give you a 10 and state something like, “I love everything about the product”, as the reason for their score.

That’s a fantastic comment to hear, and this is a customer that is definitely ripe for a referral or some other kind of growth based promotion.

But, wouldn’t it be great to know even more? Why do they love your product so much? Maybe loving your product isn’t the best you can do.

What if they had more to offer than simply promoting you to other likely customers?

That’s what Zieliński likes to find out.

In a recent exchange, LiveChat had a customer who had given them a “10” and stated “It’s awesome.” as the biggest reason for their score.

Wanting to know more, Zieliński followed up with the customer, thanking them for their support and asking if there was anything more they could do to make it even better than “awesome”.

It turned out that this customer had an idea to improve their product and was willing to go as far as creating a mock-up of how it should work (see mock-up below).

mockup_personal greetings

Customer Mock-up

It just so happened that the product development team at LiveChat had been considering a similar enhancement, but was still hung up on how to best execute it.

This promoter was able to help the dev team visualize how the feature should look, which they loved and built out and pushed live in the next two weeks!

The feature, LiveChat personal greeting, ended up becoming a big hit!

Finished product

Finished product

“Thanks to Harry (the customer), when you see someone from Paris browsing your website, you can instantly deliver a personal message in the right language or ask them how the weather is in Paris, etc.”, Zieliński stated.

Closing the loop with every customer, from detractors to promoters, is one of the most value-rich actions you can take within your NPS program. Sometimes that can mean something as simple as thanking them for their feedback and other times it could be engaging on a much deeper level.

Not every customer will provide you with a referral or a mock-up for your next great feature, but engaging with them will show that you listen and care about what they have to say. Whether the customer loves you or not, showing that you care is the key to driving long-term loyalty.

For LiveChat, a company that doesn’t spend money on any outbound marketing initiatives, increasing brand loyalty is the major key to their continued growth.

Through NPS, Daniel and his team have been able to turn loyalty into referrals, which currently represents roughly 30 – 40% of their overall revenue.

Ultimately, your current customers represent your biggest opportunity for growth (both product and revenue). And, as LiveChat has learned, you don’t need to spend an enormous amount of money to access them.

If you’re willing to commit to taking the necessary steps to running an NPS campaign the “right way”, you’ll see amazing results. Just ask Daniel.

——

NPS-Playbook-Cover-ThumbP.S. We’re giving away all of our best practices, strategies and tactics for implementing, measuring and acting on NPS successfully for SaaS companies – from beginning to end. Over the past few years, some of the top companies in SaaS including LiveChat, MailChimp, Intercom, Adroll, ConvertKit and more have turned to Promoter.io for our guidance and expertise.

All of those lessons and guidelines are now available to you for free in the book below. Download and give it a read today!

Dana Severson

Dana Severson is the Director of Marketing at Promoter.io and cofounder of Startups Anonymous. Former founder & CEO of Chasm.io/Wahooly and AngelPad Alum. In addition to focusing on growth at Promoter, Dana is a weekly columnist for Inc.com

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marketing fail

Why Marketing Campaigns Fail

I have something to confess to you. It’s embarrassing, and I was struggling about whether to tell you about it. But first, I have a question for you …

Why is it that most of your marketing campaigns aren’t as effective as you’d like them to be?

Come on now, it’s just you and me here chatting. You know what I’m talking about. You had grand plans, didn’t you? You thought that last one was really going to go viral, right? But it never hit that critical mass, did it?

How do I know? That’s where my confession comes.

My last campaign for Promoter.io bombed.

That isn’t quite honest. It did get a lot of views. But those views never turned into paying customers, so really it just made a lot of noise for no return.

But why did my campaign bomb? I have spent a lot of time thinking about that, and I think that the answer to that question might just be applicable to you and your marketing campaigns. It’s always easier to laugh at someone else’s misfortune, so maybe by studying my failure, you might gain insights that will prevent you from making the same mistakes.

Let me tell you a little bit about this campaign. Elections in 2016 had been a huge hot button issue. We thought it would be interesting if we ran a national Net Promoter Score® survey in order to gather sentiment that might give insight and clarity to the election. So we invented something new … The Net Presidential Score.

Could we predict who would become the next POTUS by NPS score?

Could we predict who would become the next POTUS by NPS score?

You can read about it more on our blog but it worked much like any regular NPS survey. We asked on a scale from 0-10 how likely you would be to recommend each presidential candidate to your friends and colleagues. Then we posted the results for the world to see.

At the time we came up with the idea, it seemed like just the kind of campaign that could go viral. Who knows … maybe we would even be invited to discuss the idea on TV. The sky was the limit.

And if you looked at our analytics, you might have called it a success too.

But the conversion rate from views into customers was next to nil. I sat down with one of our advisors recently and explained the campaign to him. I asked him where did it go wrong? What he told me was really insightful.

He said that he always looks at marketing campaigns through the lens of a Venn Diagram. He took a napkin and drew three overlapping circles.

Venn Diagram

In the first circle was what your product does. In the second circle was what customers want — their deepest desires. In the last is what the press/media/Facebook/Twitter wants.

Here is where I first wanted to interject. I wanted to argue with him. Facebook and Twitter in the same group as press and media? But then I realized that Facebook and Twitter are two of the primary places that I get my news these days, so I just kept quiet.

The Presidential election stunt was clearly aimed at the press/media part of the Venn diagram. It also overlapped nicely with the product circle. But why did it not end up converting to paying customers? Because it missed the third part of the Venn diagram.

The Presidential election stunt didn’t overlap at all with the deepest desires of our ideal customer.

How many times have you watched a funny commercial on TV and had no idea what they were trying to sell? Same problem. The campaign might be viral. It might show off your product. And still nobody cares.

Who gets this right? There are plenty of examples. In TV, Budweiser almost always hits the trifecta. Funny commercials that go viral, show off the product, and overlap with the deep desires of their customers. Another TV example is the Axe body spray commercials or Old Spice.

Or, how about this video that has been seen over 33 million times:

One of the most brilliant examples of a company hitting the trifecta was done recently by a Promoter.io customer, Jet.com.

Careculator

During this past Holiday season, Jet.com launched a campaign called “Careculator”. The concept was to put a price tag on your friendships online — via Facebook.

The way it worked was you’d connect your Facebook account and it would analyze and calculate the amount you should spend on each friend on Christmas. The calculation was based on the number of times your friend had engaged with you (i.e. liked your post, commented, shared, etc.).

As a marketer, I was impressed. Like, seriously impressed.

Price of friendshipThe calculator was fun and ingenious, but what really made it smart was that they made it super viral. I mean, of course I’m going to share the amount my friend is worth on Facebook. In my case, it was my wife. And I was sure to rub salt in the wound.

But, what really completed the trifecta was the final component to the campaign, which was to recommend gifts that were available on Jet.com that fit within the dollar amount calculated for each friend.

Brilliant.

They absolutely nailed the trifecta.

Product/Customer/Media. You need all three. You can’t just pick two. The graveyard of failed marketing ideas is full of ideas that just pick two.

So don’t let yourself fall into the trap. Let our failed campaign serve as a reminder for you.

Dana Severson

Dana Severson is the Director of Marketing at Promoter.io and cofounder of Startups Anonymous. Former founder & CEO of Chasm.io/Wahooly and AngelPad Alum. In addition to focusing on growth at Promoter, Dana is a weekly columnist for Inc.com

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Cti7Q-eXgAAfq2m

The Anatomy of a Customer [Infographic]

If you’ve read, “The Anatomy of a Passive Customer” or my most recent post describing what’s a “good” Net Promoter Score, you’ll know that I don’t hide the fact that I’m a fanboy of Southwest Airlines.

I will go out of my way to endorse and recommend them to anyone that asks (or doesn’t ask), just like I’m doing right now.

In terms of customer loyalty, I am what’s considered a “Promoter” of Southwest. Someone that buys repeatedly and goes out of my way to encourage others to do the same.

But just as I’m an advocate for their brand, they also have their fair share of detractors and passive customers as well.

Companies live and die by the customers they keep.

Companies live and die by the customers they keep. Click To Tweet

That’s why it’s incredibly important to not only identify your customer’s sentiment, but also to understand what impact their loyalty (or lack thereof) can have on your business.

The Infographic below will give you an inside look at Promoters, Passives and Detractors and what they can mean to the health of your company.

The Anatomy of a Customer

 

Dana Severson

Dana Severson is the Director of Marketing at Promoter.io and cofounder of Startups Anonymous. Former founder & CEO of Chasm.io/Wahooly and AngelPad Alum. In addition to focusing on growth at Promoter, Dana is a weekly columnist for Inc.com

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Good NPS Score

Answering the Ultimate Question: What’s a Good NPS Score?

The Promoter team recently got together for a team outing — we went and saw the movie “Snowden”. If you haven’t seen it, I’d highly recommend you do.

Following the movie, we all had our opinions. Some of us looked at the story that was told, others looked at how the story was told.

It was a brief reminder that no matter what you do as a company, you can’t please everyone.

No matter what you do as a company, you can’t please everyone. Optimize on those you can. Click To Tweet

Honestly, the best you can do, is optimize for one of the groups that you can please the most.

As nice as it might be, some of your passives and detractors will just simply never come around to giving you anything higher than an 8 on an NPS survey. The honest truth is that, as a company, you should be ok with that.

As I write this, I’m sitting on a plane, flying back to my home state of Minnesota. And, if you’ve read some of my previous posts, you could probably guess which airline I’m on — Southwest.

I’ve openly confessed my unbridled love for this company and brand. I’m a promoter of Southwest Airlines in every sense of the word.

But guess what? Not everyone is.

Some people don’t care for their cattle call seating. Other people are turned off by their lack of First Class. And others don’t appreciate the personality, and laissez-faire attitude (personally, I love it).

Recently the CEO of Delta Airlines stated that he couldn’t understand how any air traveler would appreciate the Southwest Airlines approach, let alone how anyone could actually fly with them.

Because everyone has unique tastes and opinions, Southwest Airlines doesn’t have a perfect NPS score of 100 (actually there isn’t a company in existence that I’m aware of that does).

top nps scoresDon’t get me wrong, Southwest is no slouch when it comes to their Net Promoter Score. It’s in the 60’s, which is still excellent by NPS standards (and the highest among all airlines).

Of course they would love a score of 100, but they understand, just like any other business on the planet, that an NPS score of 100 isn’t a realistic goal or expectation.

Doing so would mean that they would need to appeal to all customers … making changes in the the very same approach that has brought them to be considered one of the top companies in customer satisfaction, loyalty and retention.

Simply put, going after a perfect NPS score would actually give them the opposite result.

Does that mean that Southwest, or any other company for that matter, should ignore their detractors?

Absolutely not.

But, it does mean that it’s largely unrealistic to expect that 100% of your detractors can be converted into passives or promoters.

Detractors come in many different varieties. Some are very pliable and only a few degrees away from becoming a happy customer. Others, for whatever the reason, will never come around no matter what you do.

Your job is to identify and optimize on the former.

So you might be left wondering … if the goal isn’t to get to 100, then what is the goal?

In other words, what is a good Net Promoter Score? Or, the question we hear most often, “Do we have have a good score?”.

And, if you’re asking this question, don’t worry, you’re not alone. This is one of the most often asked questions by those that employ the methodology.

The most honest and straightforward answer is that, by itself, the score is largely meaningless. However, I do recognize that people enjoy using it to measure their overall progress and to compare their performance in a competitive landscape.

With that in mind …

What’s a good Net Promoter Score

Based on the global NPS standards, any score above 0 would be considered “good” (50 and above being excellent while 70 and above is considered “world class”).

Global NPS scale

Simply put, any positive score means that you have more promoters (advocates willing to recommend you) than detractors (unhappy customers and potential negative word-of-mouth).

The more word-of-mouth and advocate mindshare that you control in your industry at any given time will have a very direct impact on your bottom-line growth and overall retention.

With that in mind,  you could use your competitor’s score as a benchmark. More specifically though, you need to take your industry into consideration as well.

The cable or telecom industry is a perfect example where the average score is at or below zero.

Another example would be a project we’re working on currently called Net Presidential Score, using NPS to measure the sentiment of the voters as it relates to each US presidential candidate. Both Hillary Clinton and Donald Trump have NPS scores well below zero. In the world of politics, a “good” NPS score, as unfortunate as it may be, is still negative.

Net Presidential Score

The bottom line is, your overall score is a result of your efforts, not the goal itself.

Even if the bar is set lower within your respective industry, your focus should be on listening to the needs of your customers and making continual improvements to serve those needs in order grow the overall sentiment towards your brand. A “good” score will follow.

Dana Severson

Dana Severson is the Director of Marketing at Promoter.io and cofounder of Startups Anonymous. Former founder & CEO of Chasm.io/Wahooly and AngelPad Alum. In addition to focusing on growth at Promoter, Dana is a weekly columnist for Inc.com

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passivepost

The Anatomy of a Passive Customer

If we define a promoter as someone who is willing to go to great lengths to recommend or personally endorse a product or service, how many companies would you call yourself a promoter of?

My guess is that you could count them on one hand.

If we define a detractor as someone who is willing to go to great lengths to share a negative experience and dissuade others from using a product or service, how many companies would you call yourself a detractor of?

Again, I’m guessing you could count them on one hand.

The truth is, most of the time, we are indifferent (or passive) to the products and services that we use. We don’t see anything fundamentally wrong to the point where we may warn others, but at the same time, we’re also not going to go out of our way to endorse them either.

This indifference is commonly tied to loyalty. Or, lack thereof. We have no problem switching to a different brand if the price or offering is even just slightly better. Being passive (or passively “satisfied”) means that it just doesn’t matter to us.

This is also the fundamental difference between traditional customer satisfaction measurements (CSAT) and methods such as Net Promoter (NPS). Satisfaction simply isn’t enough to build a strong brand and survive in a competitive business climate. You need to dig deeper.

Let me give you an example.

I’m a huge fanboy for Southwest airlines. I’ll take a layover and an inconvenient flight time just to fly on Southwest over another option that’s offering a direct flight at a reasonable hour for a lower price. I often talk about my in-flight experiences and I’m never shy to recommend them to anyone booking travel.

I’m not alone in my view either. Southwest is consistently rated as one of the top airlines year after year according to frequent travelers. Not to mention they continue to lead the industry with a world-class NPS score.

On the other extreme there is Spirit Airlines. Rated the most hated U.S. airline, not just by me, but also by the American Consumer Satisfaction Index. The downsides to flying with this carrier are too numerous to list and as a result, I have no qualms about advising others to never step foot on one of their planes — as I’ve done many times.

This is just one of the many constant negative Spirit Airline tweets

This is just one of the many constant negative Spirit Airline tweets

In between those two companies, there are dozens of other carriers that, for better or worse, don’t even register on my radar as either good or bad. They just exist and really don’t get a second thought when it comes to my travel decisions.

If I’m in a situation in which I need to choose one of these carriers, I really have no loyalty to one over the other. It is purely a price decision — they’re just a commodity in my book.

That may sound harsh, but that’s the reality of a passive relationship with a brand. You use them to get what you want and they use you in return. Neither of you are loyal to one another.

Companies with a high number of passive customers generally focus on getting sales, not customers.

For example, it feels like not a week goes by when I don’t get some impersonal mileage offer from American Airlines in either my inbox or mailbox. They are one of carriers that fit into my “passive” bucket. I’ve flown with them maybe a handful of times and only because Southwest wasn’t an option.

These offers go directly into the trash.

What American Airlines fails to realize is that it’s not the “miles” or “points” that will make me return, it’s the experience.

Truth be told, if my only goal was to get from point A to point B, any flight on any airline would do. But it’s that extra experience that draws me into Southwest and makes me a loyal customer and avid promoter.

Getting sales is easy, getting customers is not. Getting a sale is selling a product. Getting a customer is selling an experience and building a relationship.

Getting sales is easy, getting customers is not. Click To Tweet

Creating a positive customer experience is the difference between having a revolving door of passive customers or an army full of promoters.

I remember as a child that my favorite cereal was Frosted Flakes. Not because it was better than Cinnamon Toast Crunch … I mean, c’mon … but rather because it offered the best toys in the box. Kellogg’s didn’t sell me (ahem … I mean my parents) a product, they sold me an experience. And as a result, they made a promoter out of me at the ripe old age of 5.

Over the past couple of months, we’ve given you a closer look at the Anatomy of a Promoter and the Anatomy of a Detractor. This is the final piece of the series to give you a closer look at Passives and how they impact your brand.

Did you ever wonder why the NPS formula (% of promoters – % of detractors) doesn’t include passives in the equation?

15_11_18_NPS_score

Simply put, it’s because passives don’t move the needle.

Having more promoters than detractors is an indicator of growth. Having more detractors than promoters is an indicator of decline. Having more passives really doesn’t tell you much of anything — maybe other than you’re not doing enough.

But just because passives don’t move the needle, it doesn’t mean that they don’t (or can’t) make a difference. But it’s up to you whether the difference they do make is good or bad.

In order for you to properly work with and leverage your passive customers, there are some things you should be aware of beforehand:

Passive customers are likely to churn (leave you) within 6 months. Much like detractors, passives are open to alternatives. While not as urgent as detractors, on average you’ll see 20 – 30% of passives churn within 180 days or so depending on your business model.

If you want to be a leading company in your industry, it’s critical that you respond and address your passive customers needs as quickly as possible and learn what it takes to earn that recommendation.

Passive customers are not loyal to your brand. As I mentioned previously, passive customers are the quickest to switch brands as soon as something better comes along. Interesting enough, many detractors are passionate about a brand (perhaps negatively, but that can change). Passives often just don’t care.

While they’re not likely to be spreading negative experiences about you on the streets, they’re also not out singing your praises and recommending you to others.

To earn their loyalty, you need to engage in meaningful discussion and show them that you’re more than just the product or service that they purchased — you’re an experience that’s not easily matched.

They’re price sensitive. Passives generally view competitive products as one of the same, with seeing little to no discernible difference in features or benefits. That leaves only one variable for them make decisions on — price.

Unless you’ve built your model to become the low cost leader, passive customers will drive your business towards becoming the low margin leader.

Engage with your passives, find out if they’re truly only concerned with price, almost always you’ll find out that they’re not. It just takes a bit more effort to get the answer out of them.

Satisfaction isn’t the same as happiness. While passive customers may be content, that doesn’t mean they are happy. It’s hard to build a sustainable business with content (read: passive) customers.

There is a reason why these customers are only satisfied. It’s your job (with the help of your NPS survey) to figure out why. Once you do, it’s time to fix the problem of satisfaction.

—–

Passives, while not discussed nearly as much as promoters and detractors, are just as critical to the success of your NPS campaign and your company. And, since they’re not included in the NPS formula, they can sometimes get easily overlooked.

It’s important for you to understand their characteristics and treat them with the same level of opportunity and urgency as you do with your more passionate customers.

As I mentioned in The Anatomy of a Detractor, promoters and detractors are not all that dissimilar from each other. They’re both passionate customers that want your product to fit their needs.

The passion exists within your passive customers as well and measuring your NPS can help you find it.

Dana Severson

Dana Severson is the Director of Marketing at Promoter.io and cofounder of Startups Anonymous. Former founder & CEO of Chasm.io/Wahooly and AngelPad Alum. In addition to focusing on growth at Promoter, Dana is a weekly columnist for Inc.com

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