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

papa johns nps

What Papa John’s and Domino’s Can Show Us About The Dangers of Negative Customer Sentiment

Unless you’ve been sitting under a rock for the past week, you’ve likely seen a headline or two about Papa John’s latest debacle.

After their quarterly earnings report came out recently, investors reacted negatively causing the stock to drop significantly in a single day.

But that wasn’t the big news.

The notable frontman, Founder and CEO, John Schnatter, stated on a call that the company’s downturn was due in large part to the NFL and the ongoing national anthem protests.

Many people disagreed with his theory, instead blaming the quality of their product (or rather, lack thereof) as the reason for their decline.

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As one of the biggest sponsors of the NFL, the company clearly has the data to determine the impact their marketing efforts have had on their sales, so we’re not here to dispute their claim.

It’s seems odd however, that if they had been listening to the voice of their customers, they could’ve been prepared for the backlash they are now experiencing.

Based on a quick search, there is some evidence to suggest that Papa John’s has been measuring their NPS score. Even if that’s true, it seems likely that they haven’t been actually listening to the feedback from their customers.

When executed correctly, NPS should serve as a preemptive measure in addressing AND predicting negative word-of-mouth before it occurs.

The value of this benefit cannot be overlooked, especially in negative PR situations, such as the one that Papa John’s currently finds themselves in.

Of course, NPS alone could not have completely prevented the negative messages from occurring (every brand has some level of detractors), but it absolutely would have made the company aware of the potential dangers (i.e negative customer sentiment) ahead of a disaster.

How Domino’s Recovered From Negative Customer Perception

Papa John’s certainly isn’t the first to suffer from negative customer criticism online. In fact, in 2009, their close competitor, Domino’s was surprised by a prank video that had gone viral.

The video, posted on YouTube and amassing over 1 million views within the first day, featured two employees performing unsanitary acts, such as sticking cheese up their nose and spitting on food.

The prank led to an onslaught of negative social publicity from customers, including those critiquing their product as “edible cardboard”.

dominos nps

Unfortunately for Domino’s, the attention came as a surprise and at a time when they were actively revamping their recipe based on earlier critical customer feedback they had gathered.

dominos criticism

However, since they were already aware of their customer’s sentiment, Domino’s had the ability to respond accordingly.

They started by quickly addressing the video in a carefully crafted response, targeted at the specific issues they were hearing.

Knowing who their loyal customers were allowed the company to reach out and leverage them for support. This included asking them to help share/spread their response.

Ultimately, Domino’s took their customer feedback to an extreme level.

In late 2009, the company launched a massive nation-wide advertising campaign acknowledging the negative customer sentiment and admitting that their product was terrible.

The (brilliant) campaign was designed to not only recognize the voice of their customer but also to introduce a completely revamped recipe, which had required 18 months and millions of dollars to perfect.

As a result of both listening and responding to their customers, Domino’s was able to take a potentially company-crippling viral disaster and turn it into a massive win.

In 2008, the company’s stock was worth just $4 per share. In 2017, Domino’s became one of the fastest growing stocks on the market, trading at over $215 at their high point.

More importantly though, they’ve been able to get even the staunchest of pizza critics, and former Domino’s detractors (AKA New Yorkers) to become promoters once again.

Only time will tell if Papa John’s will have the ability to recover from this most recent crisis, but if they can learn anything from their competition, it’s to strategically embrace the voice of their customer.

Negative Word-of-Mouth Can Impact Any Company

These two examples help illustrate the importance of understanding, responding to, and leveraging customer sentiment at ANY and EVERY point in time.

While these two scenarios feature massive consumer brands with hundreds of thousands (or perhaps millions) of customers, negative word-of-mouth can impact a company in any industry and at any stage of growth.

A TARP study revealed that while positive experiences are only shared with a few people on average, negative experiences get shared with an average of 12 people by comparison.

What’s more, they found that each of those 12 people tends to mention the occurrence with 6 others.

Ultimately, that leads to negative word-of-mouth experiences spreading 30 – 35 times greater than positive ones.

Negative word-of-mouth experiences are spread 30 - 35 times greater than positive ones. Click To Tweet

To makes matters even worse, it’s been proven that negative experiences spread twice as fast as positive ones, as well as have an average of 2.4% greater impact on your financials.

That’s all to say that regardless of your industry, customer type, stage of growth, etc, you need to understand the true sentiment of your customers, the drivers of that sentiment and what your customer personas are before any potential crisis destroys your business.

With word-of-mouth marketing (both positive and negative) impacting the majority of all purchases made today, you need to have a constant pulse on the customers that are driving it. Net Promoter is the most proven and effective way to do that if used correctly.

So, what are you waiting for? Sign up for a free trial of Promoter 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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Sightbox net promoter

How Sightbox Went from Launch to Acquisition In 18 Months By Focusing on Customer Happiness

According to research done by the Vision Council of America, approximately 75% of all adults need some form of vision correction.  

If you are (or were) part of the 75% like me (I had corrective surgery several years ago), you know how big of a pain in the butt it can be to maintain your prescription each year, not to mention the costs, especially if you wear contact lenses.

Enter Sightbox, a subscription-based company for contact lens wearers, that reduces the headaches and costs of maintaining your vision correction.  

Sightbox-Vision-Care-for-Contact-Lens-Wearers

Just last week, the Portland-based company announced that after only 18 months since their launch, they’ve been acquired by the health behemoth, Johnson & Johnson.

Prior to this announcement, the 20-person team at Sightbox had managed to raise $4.2 million in venture funding and amass 1000’s of customers in the short time they’ve been in the market.

How did they do it?

Richard Kotulski, Marketing Manager at Sightbox believes that their explosive growth has a lot to do with their ability to maintain a high-level of positive customer sentiment. The focus on the customer experience has led to strong retention (aka renewals), along with a consistently excellent NPS score of 59, which translates into advocacy.

Before we go into their process of maintaining customer excellence, let’s first take a look at why customers have sought them out in the first place.

Imagine you’re someone that wears contacts.

If you’re like the majority, your insurance coverage probably doesn’t cover much beyond your annual eye visit, and that’s if you’re lucky.  

In order to supply yourself with the contacts you’ll need for any given year, you’re required to first have an annual exam. If you don’t already have an optometrist, you’ll need to find one on your own, book an appointment and likely pay out-of-pocket.

Once you have your prescription, you then will be able to order your contacts. For most people, the only option is to buy the year supply all at once, which can cost a pretty penny.

This is where Sightbox saw a market opportunity.

Paying for the expense of the visit and a year’s supply of contacts up front isn’t reasonable for most people, so Sightbox decided to create an easier and more affordable way to do it.

Their model is pretty simple. For a flat monthly fee, Sightbox will find you a convenient eye doctor, book and pay for the appointment, and then send your needed supply of contacts on a monthly or quarterly basis.

sightbox process

In the end, their customer not only saves time and money, but it also removes the burden of having to repeat the process each year.

While Sightbox runs as a subscription business, billing on a monthly or quarterly basis, customers are required to sign a one-year contract in order to work with them.

This approach has helped the company maintain high customer retention, but it’s still an area that receives a lot of focus.

That’s where NPS has come in for Kotulski and his team.

Scheduled Survey Cadence

To ensure that the company is getting the most relevant sentiment from their customers at the right time, Sightbox sends each customer two NPS surveys during each year of their relationship.

First NPS Survey

The initial survey is sent 2-weeks after the customer receives their first initial box of the year. This is what some companies would call the “moment of truth” survey.

For Sightbox, it’s less about reaching customers at a time when they’re deciding to stay or leave, and more about ensuring that their experience, up to this point in the lifecycle, has met or exceeded their expectations.

From an improvement standpoint, the initial surveys can be really useful in increasing your conversion rate. Often times, especially when using customer attribute data and tagging to narrow your NPS results, you’ll be able to identify, with pinpoint accuracy, the exact reason(s) why customers aren’t converting or completing their purchase.

Second NPS Survey

Since each customer relationship is based on an annual agreement, it’s important that Sightbox has a good sense of customer sentiment ahead of renewals.

In order to effectively achieve this, the second NPS survey is sent to the customer 3 months ahead of their renewal date.

At this point in the life cycle, the customer has had plenty of time to fully experience the service and should have a pretty strong sentiment towards the brand one way or the other.

Based on that sentiment, Sightbox is able to accurately predict how likely each customer is to renew their subscription when their contract expires and react proactively.

Bucketizing Renewals

Being able to predict churn is one thing, but being able to prevent churn is an entirely different beast.

In order to properly triage their customers following the completion of their second survey, Kotulski and his team place them each in a ‘renewal bucket’ which helps dictate what needs to be done next.

For those of you familiar with NPS, their buckets align with the scoring for each category of sentiment (promoter, passive, detractor).

  1. Promoter bucket – These customers are obviously the most likely to renew. They are communicated to as such by being placed into a process that moves them towards renewal.
  2. Passive bucket – A score of 7 or 8 is an indication to the Sightbox team that this customer may require a bit of assistance to overcome any negative or passive sentiment before they are likely to renew.

    In most cases, Kotulski has found that these customers are looking for slight improvements to be made in order to continue.
  3. Detractor bucket –  As you would assume, customers who have provided a detractor score are presented with more hands-on customer support intervention. Kotulski mentions that in many cases, they will receive a direct phone call from someone on the team.

Regardless of which bucket a customer qualifies for, Sightbox closes the loop with each and every customer that responds, which, if you follow this blog to any degree, you know is the key to driving the most bottom-line value out of your NPS efforts.

Improving Retention Through Measured Feedback

While Kotulski states that only 1 out of every 6 responses they receive is negative in nature, that hasn’t prevented them from improving their retention from the critical feedback they do receive.

They group and analyze their passive and detractor feedback on two levels:

  1. Granular – This involves reacting and/or responding to feedback on an individual level. What is this “one” customer’s experience and how can we improve it for them.

    This level of granular focus means that changes that are made may not necessarily improve the experience for every customer, but rather just this particular individual.
  2. High-level – Sightbox uses keyword trends analysis (tagging) within Promoter to identify the big key issues that are impacting customers on a global scale.

    Applying trend tags, along with the individual sentiment within the feedback has helped Sightbox quickly spot the gaps in their service.

Kotulski has been able to combine these two levels of analysis to really narrow down the areas that need actionable improvement.

For example, through their high-level trend analysis, the team was able to see that ‘customer communication’ was a gap that needed to be addressed.

On the surface, customer communication can mean several things, so in it of itself, identifying a need to improve communications with customers isn’t all that actionable.

However, when they were able to combine the trending data along with granular level analysis, they were able to better understand that the communication issue had more to do with delays the customers were experiencing.

Due to the explosive growth the company had been experiencing, it had been taking longer than expected to find and book eye appointments for customers.

Because of this bottleneck and the misaligned timing expectations of the customer, the perception became that there was a lack of communication, rather than a lack of internal customer support resources.

Based on this discovery, Sightbox was able to develop a proper formula of internal booking agents needed for each set of customers as well as set the proper expectations through improved communications.

Combining both granular analysis and a broader trend analysis is critical for any company. It’s an essential step in properly identifying and prioritizing far-reaching mission-critical issues versus individual anomalies.

The role NPS has played in their success

Kotulski stated, “As a company that has seen explosive growth in the last six months we had a lot of new members to survey, but because we’re also a young company still figuring out how to scale, it was incredibly important for us to get as much feedback as quickly as possible and use that feedback for a deep dive into some of our bigger issues.

The high response rate we got from our NPS survey allowed us to have confidence that what we were hearing from our customers was representative of the overall customer experience and that we could take action on it knowing that it would really move the needle for us. Identifying those pain points early in our life means we can tweak and revise our customer experience so that it’s great for all our new members.”

And, as for why they chose Promoter.io …

“We looked at many different NPS solutions before choosing Promoter and there was no contest between them. Promoter offered the most robust set of analytics, integration, and facilitation. It’s not just about the score, but about the conversations that the score starts.

We didn’t use any other product because we could see that Promoter was hands down the best option out there.”

Was their successful NPS results a factor in the acquisition of Sightbox for Johnson & Johnson? No doubt.

But, one thing that Kotulski knows for certain is that “happy customers” and true customer advocates have been their biggest propeller of growth so far.

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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Increase survey response rates

7 Secret Ways to Increase Your Survey Response Rate

Several years ago, before I was a part of Promoter.io and familiar with the Net Promoter System, I had put together a survey for a group of early users of my newly minted startup.

I had spent at least a few hours carefully wording each question to ensure that I received the precise data I was looking for.

It was pretty darn exciting. Armed with the vast amount of knowledge that my users were about to provide me, I was going to at least triple my growth (so I thought).

Once the survey was refined to my satisfaction, I quickly sent the email out and waited in anticipation, constantly refreshing the page as the excitement of what was to come is too much to bear.

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A few responses start to trickle in and then … things went dark.

The kernels stop popping. It was cooked.

I panicked.

Maybe it was because of the time zone differences? Maybe my emails went to SPAM (as I frantically sent a survey to a friend just to be sure). I know, maybe everyone is busy right now and they’ll get to it in a few minutes.

The justifications began to build up.

The reality was: I messed up.

Well, not really. I just wasn’t armed with the knowledge of what I’m about to bestow upon you.

The truth is, most companies get this totally wrong, including even the most successful company in the world.

But, listen up, I’m not going to let you make the same mistake that I made. I’m about to give you 7 secrets to massively increase your survey response rate that even Apple isn’t aware of:

Send your survey from a human, not a department or company

This may seem obvious, but all too often, companies want responses to go to an email address that everyone on a team has access to.

What you need to know is that nobody wants to respond to a bot (i.e. support@company.com), they want to know that their voice is being heard by an actual person.

You can even create a fictitious email address or alias, so long as it looks like a human.

BONUS: If you want more honest answers, send the survey from someone that the customer doesn’t deal with on a regular basis.

Set expectations in your subject line

If you’re sending a survey that’s going to take 20 minutes to complete, let them know that this is going to suck up front.

Ha, just kidding. Don’t ever send a 20-minute survey to begin with (more on this below).

What you should do however is make them aware of how easy this will be to complete.

Something like, “Two Quick Questions” or “Have 60 seconds? We’d love your feedback!”.

Minimize the burden they instantly feel when they see a request to complete a survey.

Make your call-to-action very clear

Don’t muddy your email with a bunch of links elsewhere.

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Most of us get link happy when sending our customers an email and start using it to drive traffic to whatever page we’re trying to promote.

Don’t do that here.

Surveys should have a single CTA. Link to the survey and that’s it. Period.

BONUS: If you can embed the first question/action in the email itself, you’ll dramatically improve your response rate.

Ask no more than 2 to 3 questions

I know this is hard.

Trust me, I know how tempting it is. If I have my customers attention I want to ask every question under the sun.

This is super important for you to know though. (Which is why it’s bold.)

Statistically, every question you ask after 2 or 3, you’ll see a 30-50% reduction in response rate.

Yes, that means that if 10% of your customers answer your first two to three questions, only 5% may answer the fourth (this is called survey abandonment).

I mean, let’s not be oblivious to our own behaviors. This is just human nature.

(This is part of why NPS surveys sent through Promoter see an average response rate between 30-40%.)

Caveat: There are obviously exceptions to this. Some surveys (outside of Net Promoter) require more questions (true research, etc). More often than not however, people ask unnecessary questions which burden the customer.

Don’t ask questions that you can find out on your own. It’s a waste of time for your customers and you’ll hurt your response rate and validity of your data in return.

More on this topic here.

Send Reminder Surveys

I’m going to assume that you’re familiar with the benefits of sending a reminder email in sales or just general customer outreach.

Sending a reminder email for a survey is no different.

In fact, what we’ve seen at Promoter.io is that by sending a reminder to complete your survey between 3 to 7 days will boost response rate by up to 15% with just a single reminder.

If you’re concerned with customers getting upset and unsubscribing for “bombarding” them a reminder survey, we’ve found that only a ½ of a percent will actually unsubscribe on average.

That’s all to say that the benefit (15% boost in response rate) far outweighs the cost (.5% unsubscribes).

Just do it, but only send one reminder.

Follow up personally with EVERYONE that responded

By following up, I don’t mean, send them a reminder (like I mentioned above). I’m talking about replying and “closing the loop” with each customer that completed your survey. Individually.

This probably sounds like a daunting task because, well … it is.

You’re also probably wondering how this could possibly increase your response rate considering they’ve already responded.

Fair question, more on this below.

I’m not going to sugar coat it, this isn’t going to be easy. And, quite frankly, it’s not supposed to be.

How does that saying go? “Nothing worthwhile is easy.” Or something along those lines.

And, before you get ahead of me with your thoughts of fancy automation triggers, this is one message you CAN NOT automate. I know, I know … blasphemy.

(I’m not going to get into why you can’t automate here, but we did write a post about it.)  

Why is this sooooo important?

Let me give you an example:

Imagine you’re at a restaurant. You just finished your meal and the manager comes to your table to ask how your experience has been.

After a minute of providing some praise and constructive feedback, the manager stares at you blankly and walks away.

Ridiculous. Right?

It seems absurd that this would ever happen in real life, but this is exactly what happens when you don’t respond to your customers feedback online.

It may not feel as personally insulting, but if that’s your justification, you’re missing the point.

The greatest value that will come from your survey, happens post survey.

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When you follow up with your customer after they complete your survey, three really important things happen:

  1. Your customer feels valued. This is all they ever want. I mean, why did they fill out your survey in the first place? It certainly wasn’t for you. It was for them. They wanted to be heard.Thank them. Acknowledge them. Tell them that you care. Do that and you’ll have a customer for life.
  2. Opportunities Emerge. You may think that all of the answers you need will come from the survey questions you ask.

    That indeed is partially accurate, but not fully.

    The real gems emerge in the discussions that follow. (One of our customers launched a new 7-figure revenue channel that all started as a result of a single discussion with a customer post-survey. No joke.)

    These discussions occur with your customer because you had the wherewithal to personally follow up, which … ta da … gets them to respond back.

    Every single response to your survey is an opportunity: to build a stronger relationship, to ask for referrals, to upsell/expand customer spend, to proactively recover a customer who is about to churn and looking at alternative solutions, to capture direct and meaningful product feedback and more. Treat these follow-ups as such.

    BONUS
    : In addition to acknowledging their feedback, be sure to slip a question or call request in your follow up.
  3. Action happens. Did you get positive answers back from your customer?

    Great! Ask them to leave you a review on G2 Crowd/Siftery/Yelp/etc. Or, join your referral program. Or, an endless number of ways they can help you drive growth.

    The fact is, the average company generates roughly 50% of their revenue from their existing customers (and in some cases even more).

    The other fact is, your survey likely won’t (on its own), inspire your customers to go out and sing your praises to others.

    But your follow up will.

    What if you got negative responses back from your customer?

    Great! Well, not so great, but not terrible either. Why? Because you can follow up with them and fix their issues before they head to your competition.

    In the world of Net Promoter Surveys, a customer that has identified themselves as a detractor (gives you a score between 0 – 6) will churn within 90 days (on average). You can drastically reduce your churn by simply … you guessed it … following up. :)

So, what does any of this have to do with increasing survey response rates?

Let’s go back to my example.

Imagine you’re back at the same restaurant (in spite of the socially awkward manager that never acknowledged your feedback at your last visit). This time, the manager approaches you again and asks if you’d be willing to provide some feedback yet again.

Are you going to do it?

The truth is, you may still do it because it’s a personal setting and you don’t want to be rude. But online … hell no.

If you want to increase your survey response rates over time, let your customer know that you’re listening. It’s as simple as that.

The greatest value that will come from your survey, happens post survey. Click To Tweet

Send more than one survey each year

Several years ago I worked for a national magazine as an Advertising Director.

Every few years we would do these readership studies to gather the demographics, sociographics, etc. from our readers. (For the record, the response rate to those studies was close to nil.)

These weren’t for our knowledge, they were done as a data-gathering practice to pad our media kit for advertisers.

Of course, only the most enticing of data would make it to our presentation.

We only did them every few years because we knew if we did them more frequently the data may no longer be in our favor.

The reality is, customer data and customer sentiment changes rapidly. This is especially true with online businesses or and product or service that is used frequently.

Unlike the advertising business, most companies don’t do surveys to pad their numbers, they do it to gain knowledge. Factual knowledge.

As a result, most companies will survey their customers multiple times per year. SaaS companies and other high-touch organizations do it quarterly (which we tend to recommend for most). Service businesses may do it bi-annually.

The point is, you may not get a customer to respond to your first or second or even third survey. But chances are you will on your fourth, or fifth. Especially if you are transparent as a company with what you are learning from your customer engagement efforts (share with all of your customers regularly).

In marketing, it’s common knowledge that it takes 7 or more touches before a prospect will take action. Sending a survey can be similar in that way.

If you want to increase your survey response rate over time, send more than one survey a year … and be consistent about it.

One Last Thing (Something that you shouldn’t do)

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You may believe that providing your customers with an incentive (compensation, gift card, discount, etc.) would be a good way to boost response rates.

Without a doubt, that is true. You will indeed get a higher response rate.

BUT … it comes at a cost.

And, I’m not talking about the cost of the incentive itself.

The bigger cost is the informational cost. Or rather, the cost of inaccurate or biased responses.

Simply put, when you incentivize your customer to complete your survey, you instantly change their motivation and behavior.

Two things happen:

  • They give less consideration to the questions as their motivation shifts from “being heard” to “getting paid” and “getting done with this survey as fast as possible”.
  • You introduce guilt bias. That is, the customer feels compelled to provide more favorable answers due to the perception of a quid pro quo.

The big question you need to ask yourself is: What’s more important? Quantity or quality?

Follow the other 7 Steps above and you can have both!

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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survey incentive

This is Why Survey Incentives Don’t Work

I received an email the other day from a company (with a product that I use) that was offering me a chance to win a $300 gift card in exchange for completing their survey.

While I was tempted, I decided to pass on the survey.

Why?

Because my time is a precious asset and one that I’m not willing to gamble on … at least not without knowing the odds.

Had this company mentioned that the email was only sent to 20 people, so I knew my odds were 20:1, I might have considered it.

But, here’s what I did know … or at least perceived to know based on the email:

  • If they’re incentivizing me to take a survey, there must be a lot of questions, which means a lot of time
  • This is a mass email, so it’s likely that 1000’s of people are getting the same email (making it even less relevant to me)
  • I never win anything, so why would this time be different

The truth is, I don’t know if anything I perceived to be true, actually is. This is just what I’ve been led to believe based on my previous experiences. That’s my reality.

But, just because I’m not willing to gamble my time doesn’t mean that others won’t, so I’m sure that they got some customers to respond. How many is anyone’s guess.

Now, imagine that instead of a lottery, they had offered me a guaranteed $5 Amazon gift card for completing the purchase.

This is now a proposition that I can properly analyze.

What I know is that on the other end of this survey, I’m making five bucks. What I still don’t know is how long it will take me to earn it.

While the certainty of compensation is enticing, I would likely at least click on the link to see how long this survey will take to complete.

I may answer a few questions and hope to see a status meter of some kind. Without one, I’m unlikely to stick around very much longer.

At the end of the day, there is a point in which the value of the $5 gift card no longer exceeds the value of my time. When this occurs, I’m gone.

Have you noticed that while I’ve been evaluating my willingness to participate in this survey, I haven’t once mentioned my interest in providing feedback to this company as a motivating factor?

I mean, isn’t that really the point of any survey to begin with?

It reminds me of the early days of list building as a marketer — using a sweepstakes to build a database.

You end up capturing a lot of fresh contacts, but they end up amounting to nothing more than vapor leads.

Nearly anyone that signed up for one of these contests had no interest in what your company had to offer other than the sweepstakes itself.

When it comes to padding your subscriber count number, incentives can work wonders.

But, if you want to build an authentic database, with subscribers who have an honest interest in your product, using a sweepstakes or giveaway is the wrong approach.

The same is true for surveys.

There is no arguing that offering an incentive to complete your survey will drive a higher number of responses. Without a doubt that is true.

What you need to ask yourself is whether a higher number of responses is your only goal.

Regardless of motivation, there are very few people (if any) that are patient enough, or even willing for that matter, to fill out a long, multi-question survey. There isn’t a reasonable incentive out there that will change this fact.

Still however, most long surveys will generate a response of some kind (1- 3% generally) from customers that truly want to be helpful.

If you sent out 1,000 surveys and receive only 10 – 30 completed responses in return, it’s natural to believe that customer motivation is to blame.

As a result, many companies will decide at this point to offer a reward for completion, such as a gift card, or a sweepstakes of some kind.

Like I mentioned above, this will certainly increase the response rate, but what many don’t realize is that the cost goes well beyond the expense of the incentive being offered.

This cost comes in two forms:

  1. Financial cost: The actual expense of the discount, gift or reward.
  2. Informational cost: The cost of inaccurate or biased data.

Financial cost is pretty self-explanatory and easily predictable, the informational cost however, is much more uncertain and can be terribly detrimental to the bottom line. The two biggest factors that contribute to this cost are:

Lack of Consideration: When a customer has a financial motivation, their objective changes from providing meaningful feedback to providing quick answers, especially when it’s a long survey.

If you’ve ever had to quickly fill in the remaining circles on your Scantron form back in High School to beat the exam buzzer, you’ll have a good understanding of how incentivized customers complete your survey. (We’ve all done it before.)

Scantron

Guilt Bias: While the lack of thoughtfulness is one concern, customers who are incentivized also have a tendency to provide more favorable answers due to the perception of a quid pro quo.

This isn’t necessarily a conscious reaction, but it can become more intentional when it comes to a contest or sweepstakes where a limited number of rewards are given out. This is due to the belief that positive answers may influence the results.

The combination of these two factors ultimately means that your results will become largely meaningless.

While incentivizing your customers will undoubtedly result in a higher response rate, the cost will always outweigh the benefit.

Out of 1,000 customers, would you rather receive 20 honest responses, or 200 haphazardly filled in Scantron forms?

Most companies would prefer neither, which is why they’ll opt to try a performance enhancing incentive to begin with.

This is the reason why the Net Promoter System has become so widely adopted. NPS is a natural performance enhancer. Feedback is organic and impartial, while generating a response rate of 25 – 40% on average. Additionally, NPS results are proven to be the leading indicator of a company’s growth potential.

If you want to optimize your customer feedback, stop using survey incentives — and start using NPS.

And, if you want your influx of customer feedback to directly impact the bottom line, make sure to use NPS the right way. Book a call and we’d be happy to spend a few minutes reviewing the best practices for your company and show you how Promoter.io can help drive growth. 

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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Taxjar reviews

How Do You Outpace Your Competition? Follow This Approach From TaxJar

As Benjamin Franklin once said, “There is nothing certain in life, but death and taxes”.

While that statement is profoundly true, I’m certain everyone can agree that there is also nothing more painful in life than those same two things as well.

Where there is pain, there is usually an opportunity.

Promoter.io customer, TaxJar, is a company that’s solving one of those pains.

TaxJar is a 21-person company, currently serving over 8,000 clients, largely in the e-commerce space, which helps their customers simplify their tax requirements.


Here’s an example: If you’re someone that sells products on Amazon, you can choose to send your products into Amazon to be fulfilled and shipped. Those products are then dispersed to distribution centers throughout the country in order to be delivered quickly to customers.

That’s great for buyers, because now they can get their goods in “Amazon time”.

But, it’s not so great for sellers, because now they’re selling products in more than just one state. And, each of those states have unique tax requirements. Queue the migraines, right?

Enter TaxJar

They simplify this entire process through automation, so their customer doesn’t need to concern themselves with multi-state tax laws. The buyer is happy because they’re getting their products quickly and the seller is happy because TaxJar is making their job (heck, their life) easier.

That’s a winning scenario for any successful company.

But, with over 8,000 customers, it’s extremely important for TaxJar to maintain a pulse on the health of their relationships with their customers, otherwise they can risk making a painful process even more … well, painful.

The team at TaxJar turned to Promoter.io and NPS to help understand the impact they were having with their customers as well as test some changes they thought might improve the tax-paying experience.

In addition, they wanted to implement NPS to both prevent future churn and put their promoters to good use.

Note: As we’ve mentioned in previous posts, on average, only 20% of any given company’s promoters will actively endorse or refer new customers without further communication.

Activating the additional 80% requires a company to proactively reach out to their advocates and make specific requests that can directly (and positively) impact the business. These requests may include customer reviews, social shares or simply asking for them to refer someone new.

Promoter.io offers custom “Thank You” pages to make the immediate connection between excited promoters and positive shares an easy task, which ultimately impacts organic growth.

The way that TaxJar started with NPS was a bit unique.

Prior to beginning the process, they had become aware of a big gap in their product offering. Or, at least what they perceived to be a gap. But, they weren’t certain.

The team at TaxJar decided to release a new version of their app to a select group of their customers to address the potential gap.

To properly measure whether this new version actually made a difference in customer loyalty, they decided to segment their NPS into two groups:

  • Customers who have access to the new version
  • Customers on their legacy version

What they were ultimately looking to see is whether customers on the newer (beta) version had a higher level of customer sentiment and loyalty than those on the older plan.

After the results were in, they were able to properly validate their assumptions when they discovered those that had access to their beta app gave them an overall NPS score in the 80’s (world class), while those on the legacy version scored them in the 50’s (still great, but measurably lower).

Note: For early stage companies, NPS is a great measure of PMF (Product Market Fit). After a tool is on the market, NPS can help you validate your ideas/assumptions via your beta customers willingness to recommend others.

As a process, TaxJar collects their data by surveying 200 randomly selected customers each month from both groups. Those customers then receive continual surveys every few months, allowing TaxJar to maintain an ongoing understanding of sentiment.

Measuring NPS is most impactful when you do it over time, but that’s especially true for TaxJar. With different tax laws and filing dates with each unique state, each customer has unique user experiences based on their individual tax situations.

Staggering their surveys has been critical success factor and value point as it has allowed TaxJar the ability to gauge the sentiment of their customers over time, both as the product matures and as tax laws continually change at the state level.

In addition to the insights they’ve gained from their customers, they’ve also been able to drive their business forward in several other ways as well.

TaxJar thrives on the reviews from their customers, especially since many of them are Amazon sellers, who deeply understand the impact that positive reviews and brand perception themselves.

Through their NPS campaign, the TaxJar team was able to identify their promoters and activate them by asking directly for reviews of their experience.

 

With detractors, they’ve been able to differentiate themselves from their competitors by personally responding to each piece of feedback and being attentive to their needs, getting ahead of potential churn before the customer has made that decision to leave or find another solution.

TaxJar operates in a space where their closest competitor is a large company with impersonal communication. They’ve used this to their advantage by giving their detractors (and promoters) individual attention that they wouldn’t receive elsewhere.

———–

TaxJar is great example of a company that has utilized NPS to not only improve their product over time through customer insights, but also to support their passion of over-delivering on customer experience. 

As a result, they’ve found their secret to outpacing their competition.

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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