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by Mikhail Dubov on 2 Jun 2015

How to grow your company by doing one simple thing

Slack Daily Active User Growth
Slack Daily Active User Growth

Slack is on fire. The company has record-setting growth metrics. It has reached a $1 billion valuation in just one year and three months. Their viral growth is down to the wildfire that is word of mouth marketing.

Slack Daily Active User Growth

__This post is about making word of mouth work for you. __

It is not news that the most powerful marketing impression is a personal recommendation. Twice as many consumers trust a recommendation vs paid advertisement. Recommendations come from highly satisfied customers also known as Promoters. Turning more customers into Promoters boosts the number of times your company is recommended. This in turn fuels growth at very little cost to you.

Below are some tried and tested techniques to get your customers talking.

Step 1. Run a Net Promoter Score (NPS) survey:

You can’t achieve something unless you measure it. Some companies use clever tracking and referral codes to estimate viral coefficient. But only a few businesses actually grow through clear social media channels. Most word of mouth happens somewhere else, where it’s hard to measure. Think coffeeshop, conference, meetup, canteen and many other situations. For some products people just won’t be into sharing their experience with strangers. Mint.com is a good example of <a href”http://www.quora.com/How-did-Mint-acquire-1-0m+-users-without-a-high-viral-coefficient-scalable-SEO-strategy-or-paid-customer-acquisition-channel”>strong word of mouth growth without much of true virality</a>. On the other hand, Secret spread like wild fire over social networks in 2014 only to shut down this year because virality only accounted for the “hot new thing factor”, not the usefulness of the service.

To help us measure true long term growh potential, we turn to Net Promoter Score. NPS is basically a simple survey asking your customers what the likelihood is of them recommending your business on a scale of 0 to 10. And before you ask, yes, this is an 11-point scale. And no, it does not make any sense. Such is life.

Net Promoter Score Example

Based on their answers, it then categorises your customers into one of three groups: Promoters (9–10), Passives (7–8) or Detractors (0–6). The more Promoters you have the more customers you will acquire through recommendations.

Net Promoter Score was introduced in 2003 by Bain & Co as “the one number you need to grow”. It is a number that, roughly speaking, tells you how much your customers like you. It is calculated as follows:

## NPS = % Promoters (9–10) — % Detractors (0–6)

A good NPS is typically considered anything above 70%, with over 85% being outstanding. This is however a very rough guideline, the real value of NPS comes from understanding how to improve it within the context of your own company.

Step 2: Collect feedback

Make sure you follow up with an open ended question of why the customer gave the score they did.

Free Form Text Analysis

The challenge here is to collect enough quality comments as to why respondents gave the recommendation score they did. You can also ask your customers to tell you what would it have taken them to give you a higher score.

Customers can often tell you fascinating things about your business that you would otherwise miss. A great example of this is the snack box delivery company Graze.

Graze had been providing customers with their own afternoon tea blend alongside a small square of cake to create an ‘afternoon tea’ product. After receiving a lot of feedback through customer emails direct to their CS team as well as comments in surveys, they realized that their customers loved this tea blend so much they wanted to be able to purchase it as a standalone product. Graze have since launched their ‘tea box’, containing 24 teabags of their unique afternoon blend and uptake among their customers has been very strong.

Step 3. Identify what experiences turn customers into Promoters

Graze is genuinely obsessed with customer feedback. Every day their team reads through heaps of emails and comments, forwarding product suggestions to the management team (who also love reading this stuff). Great as this approach is, it is hard to scale.

“Every CEO should be able to answer this question: what are the top 3 reasons why people recommend and do not recommend your brand?”

Bill Macaitis, CMO, Slack

An alternative solution to manually reading customer comments is to get a computer to do it. Chattermill.io for example, has specialist software that can detect sentiment and themes in customer feedback with precision not too far from that of humans. It can literally tell you what your customers are saying.

Top Promoter and Detractor Reasons

In short, allowing customers to leave feedback in their own words paints a detailed picture what triggers a positive or negative experience. With this knowledge you can make confident decisions on what to amplify and what to fix. As you do so, you will start to see more of your customers turning into Promoters. Slack does not stop at making you their user. They want you to shout about how awesome Slack is on every corner. They use NPS as the most important metric. No wonder, it is the fastest growing company in the world.

Step 4. Rinse and repeat

A lot of companies collect NPS but don’t utilise it to full potential. The reason you should be using it is not because Bain said so, but because it gives you a pulse of your business. What good is a pulse that is collected once a year. Twice a year? NPS just as your other KPIs should be collected regularly, as often as possible. There is nothing stopping you from collecting it daily if you have enough customers. If not, consider weekly or monthly.

The trick is obviously not to spam your customers but also not to spend all your time building surveys, sending emails, maintaining spreadsheets with response data etc. Again, an automated solution makes life much easier. At Chattermill, we hook directly into your CRM or email marketing tool and make sure a sample of your customers gets surveyed every day / week / month.

Fundamently people flock to popular, recommended things. Get more of your customers to become Promoters, the best advertising space you can get.

Use Chattermill to turn customers into Promoters. Bloggers also have to pay the bills.


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    Mikhail Dubov

    Founder and CEO of Chattermill, I am deeply passionate about building products that enable businesses to do great things for their customers. I have previously worked as a banker, a consultant and a software engineer.