...And how to measure it.
It seems every piece of startup advice out there tells you to build something people need / want / love.
It's great advice, but I'm skeptical that many founders start businesses to build something people don't want.
Striving to build something people love is obviously a sensible idea, but how do you measure for that? How do you prove you're building something that's truly delighting users?
You can measure daily / weekly / monthly active users (DAU / WAU / MAU) but that just shows people are using your product. They don't necessarily love it.
One step further, you can charge for your product and see how much people are willing to pay for it. You can measure Average Revenue Per User (ARPU) but this is still a second-order result of someone loving your product. They may be begrudgingly paying for your service and actively seeking a replacement to get them out of the horror they're experiencing while dealing with your awful UI. Or they might be in love with your product and telling all their friends about how incredible your Super-Awesomizer-Filter feature is.
Talk to your users
The best way to truly understand whether you're building something people love is to ask them.
Sounds obvious, but it's still extremely rare that product focused people in software companies actually reach out and talk to their users. It seems people don't have time. But the value in talking to even one user is huge when compared to not speaking to any.
There are a few challenges, though, in asking hundreds or thousands of users what they think of your product:
- Unlike reporting on DAU, or ARPU, you won't have a complete data set. You'll only have a sample – some, if not most of your users won't respond to a survey or even a short email asking them for feedback.
- It's extremely difficult to turn thousands of emails into actionable information. You have tons of handy, interesting emails to read, but you have no way to measure whether people are happy or satisfied with what you're building. You have to translate their message into "loves us 😘" or "doesn't love us 😭".
Net Promoter Score (NPS)
The good news is there's a tried and tested method for measuring customer satisfaction – whether people love what you're building. It's called Net Promoter Score (NPS) and it was introduced in 2003 by Fred Reichheld in this Harvard Business Review article.
Whether you know it or not, you've almost certainly seen an NPS survey before. It's a simple question:
“How likely is it that you would recommend our company / product / service to a friend or colleague?”
You can then answer this question on a scale from 0 – 10 – with 10 being the highest accolade a user can give you. You can ask for more feedback beyond this – following up with a question on why the user gave the number they did naturally forces a more insightful answer.
At this point you might be wondering why this is now a standard for measuring customer satisfaction. Well, wonder no more – the beauty of NPS is in the scoring and how you can bring all your responses together into one number that summarises your performance as a business.
Promoters, detractors, and passives
- Promoters are those who responded with a 9 or 10 to the NPS survey. They are considered to exhibit value-creating behaviours – for example they're likely to recommend you to a friend, buy more of your product, or upgrade in the future.
- Detractors are those who responded with a 0 – 6 and are considered to be unlikely to exhibit value-creating behaviours.
- Passives are those who responded with a 7 or 8 and sit between the Promoters and Detractors.
The final NPS is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. Passives count towards the total number of respondents, but have no impact on the final score.
Your NPS, therefore, ranges from -100 (you're definitely not building something people love) to 100 (rock on! You're definitely building something worth shouting about).
A few services you can use to track NPS today
In the spirit of my last post about getting stuff done, you don't want to take 3 weeks before you can get some insights on NPS.
No joke, you can sign up for one of the following services and start getting this actionable information on your user base today. If you're curious about whether your users are satisfied with what you're building, I can't recommend it strongly enough that you start measuring NPS the minute you finish reading this post.
So, there we have it. Step 1: build something people want. Step 2: Measure. Step 3: Iterate. Step 4: Rinse and repeat.