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When NPS means ‘Not Possible. Seriously?’

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Recently a competitor announced that they achieved a Net Promoter Score® of 89.9 percent. If this is the case, let me be the first to say: Congratulations! And welcome to the 80+ club! But I think I’m going to hold off on my congratulations for now. Here’s why.

This score strikes me as a more than a bit odd, because the highest recently published NPS score I was able to find from a competitor was 19. The company that published the 89.9 scored a 3 in that same report, in 2012. That’s a huge jump.

The company did not post response rates either, which is key to validating a true NPS score (more on that in a minute). Nor did they mention whether this was a survey of their entire customer base across all products, certain phases of the customer journey, or just a survey of one segment.

Another puzzling aspect to me is that this huge jump occurred while the company was in the process of being taken private, a challenging time to achieve a thirty-fold increase in customer satisfaction!

I point all this out because NPS is an important tool for us at AppDynamics, and I want to make sure its integrity is beyond question.

Here at AppDynamics, we believe in a customer-centric approach and use it to drive customer success. We think customer success comes from a variety of inputs, but above all, it’s about culture. Plain and simple, it needs to be baked in. Everyone in the company — not just the obvious customer-facing roles — needs to be a customer success champion so we can successfully empower our customers and grow our business.

We measure our success in these efforts by using the NPS methodology developed by Satmetrix.

NPS is a simple and effective way to gauge customer loyalty, document areas we can improve, implement those improvements quickly, and then survey the customer base again to see if our continuous improvement process affects the way our customers feel about us. NPS allows us to capture meaningful, actionable feedback across all our product lines, all customer segments, and all phases of the customer journey.

We monitor these customer satisfaction levels very closely to ensure customer experience is not negatively impacted by our rapid growth. Here is our score over time:

  • FY12 Q1: 72.4
  • FY12 Q4: 73.5
  • FY 13 Q2: 76
  • FY 14 Q1: 81
  • FY 15 Q1+Q2: 84
  • How NPS Works

    The Net Promoter Score was developed by Satmetrix and is based on the fundamental perspective that every company’s overall customer performance can be effectively measured by asking one simple question: “How likely is it that you would recommend [your company] to a friend or colleague?” Customers respond on a 0-to-10 point rating scale and are categorized as follows:

    Promoters, score 9-10, are loyal enthusiasts who will keep buying and refer others, fueling growth.

    Passives, score 7-8, are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.

    Detractors, score 0-6, are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

    To calculate NPS, the percentage of customers who are Detractors is subtracted from the number who are Promoters, thus arriving at “net” promoters. An NPS score can range anywhere from -100 to 100.

    Who asks the question?

    Here is the major caveat of the NPS program: The companies themselves survey their own customers. Not Satmetrix. Not an independent third-party. So it is critically important that every company strictly follow the methodologies established by Satmetrix to ensure the integrity of the survey and the results.

    This requires training and certification. AppDynamics has Satmetrix Certified Net Promoter Associates on staff, who are experts on the process and oversee all of our surveying. None of our competitors list any staff as NPS-certified in the Net Promoter Community.

    We send the survey to customers via email and provide a survey link. We validate that the responses are from customer company email addresses. We also have customers fill out handwritten surveys at company events. We store the data securely. We survey all customers at all stages of their customer journey to get a true score. We follow all the Satmetrix best practices.

    In order to have a valid score, the response rate must be above 23 percent. Our response rate is 37 percent, well above industry standards. To put this in perspective, a recent airline industry survey generated a response rate of just 9.5 percent.

    It matters to customers and to us

    Once we have our results, we close the loop, addressing any feedback provided by customers to help us improve their experience. The feedback goes to our department leaders and everyone else internally who can impact customer success. And that’s just about all of us.

    Our AppDynamics NPS score is 84 and we’re extremely proud of it. It was and is a lot of hard work to achieve this, and we know that it’s a valid, legitimate measure of our customer success program. We hope all companies, including our competitors, work as hard to ensure the integrity of the NPS program. And we congratulate those who achieve customer success. It’s quite an achievement!

    Here are the NPS scores I’ve referenced in this post:
    http://experiencematters.wordpress.com/2012/05/14/net-promoter-score-and-market-share-for-60-tech-vendors/

    AppDynamics NPS Score is referenced here:
    http://www.appdynamics.com/blog/news/appdynamics-announces-astounding-net-promoter-score-obsessive-focus-on-customer-satisfaction-pays-off/

    Read more about AppDynamics Customer Success 2.0 here:
    http://www.appdynamics.com/blog/news/customer-success-2-0-secret-ingredient-culture/

    The post When NPS means ‘Not Possible. Seriously?’ written by appeared first on Application Performance Monitoring Blog from AppDynamics.

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