The company has been on a growth tear over the last few years. The cloud-based technology company has capitalised on the pent-up demand for a workplace communications tool and has become the tech darling of Silicon Valley. It recently passed 8 million daily active users with approximately 70,000 businesses paying for their services.
The company now has a valuation of $5.1 billion after a recent funding round by SoftBank. The Slack CEO says the company ‘should end up as big as Microsoft’. The company has now grown so big it's beginning to draw a competitive response from the tech giants like Microsoft who recently unveiled a new version of Teams. So how did Slack go from tech upstart to Silicon Valley royalty? The answer. Through word-of-mouth marketing tracked by NPS.
This post is about making word of mouth work for you.
It's no secret that the most credible form of advertising comes straight from the people we know and trust. According to a EduBurdiearticle, word-of-mouth recommendations from friends and family are still the most trusted source of information, with 84% of respondents across 58 countries considering it the most trustworthy.
Trust in advertising on branded websites has also increased, with 69% of respondents indicating their faith, up by 9 percentage points from 2013.
As Andrew Chen writes in an essay on scaling growth if you create experiences that your users love and they engage with your product, you can achieve major “word of mouth” growth driven by a high Net Promoters Score. Turning more customers into promoters boosts the number of times your company is recommended. This, in turn, fuels growth and is one of the few ways to reach hundreds of millions of users or revenue at minimal cost to you.
Identify What Experiences Turn Customers Into Promoters
Have you visited Slack's wall of love? They are a founders dream.
When Stewart Butterfield discusses Slack's success one core theme emerges. It's that customer feedback was central to building momentum with users. It's part of the company DNA. By continually gathering feedback Slack was able to identify small changes that made a significant impact on the companies growth.
Early on in Slack's development team members realised it was hard for new users to navigate new conversation channels at large firms. As a solution, Slack added fields to enable the description and the number of people using the channel. On the surface, it appears a trivial solution, but it was a critical issue that made Slack unworkable in large teams. Every day Butterfield and Slack customer success team read through heaps of emails and comments, forwarding product suggestions to the management team.
“We will take user feedback any way we can get it. In the app, we include a command that people can use to send us feedback. We have a help button that people can use to submit support tickets.” Slack CEO, Stewart Butterfield
Slack began to learn more about their product and understand it's market demographic very well. Slack identified three key features and got those things very right. They found the true essence of value in their product. As the article "From 0 to $1B - Slack's Founder Shares Their Epic Launch Strategy" by First Round Review highlights:
- Search Capabilities: When the search user experience has been raised so high by Google. Slack knew they needed a seamless user experience where users could find documents and conversations with ease.
- Synchronization: When a user leaves their desktop and switches devices to a phone Slack knows where every person in every conversation leaves off.
- Simple File Sharing: User of Slack interact with the product for hours a day. By adding the simple ability to share files and images quickly by dragging and dropping providing shortcuts and productivity hacks.
In short, allowing customers to leave feedback in their own words paints a detailed picture of 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.
NPS can help identify your brand’s advocates, drive your product roadmap, alert you to customers in danger of churning, and which customers you should approach for stories. Ask your biggest evangelists for reviews, tweets or customer videos. It’s really easy to reach out and tap into that evangelism. Slack CMO (2014-2017), Bill Macaitis
They use NPS as the most important metric. No wonder, it's one of the fastest growing company in the world. Below are some tried and tested techniques to get your customer talking.
Step 1. Run A Net Promoter Score (NPS) Survey:
You can’t achieve something unless you measure it. Some companies use smart tracking and referral codes to estimate the viral coefficient. But only a few businesses grow through clear social media channels. Most word of mouth happens somewhere else, where it’s hard to measure. Think coffee shop, conference, meetup, canteen and many other situations. For some products, people just won’t be into sharing their experience with strangers. Mint.com is an excellent example of a strong word of mouth growth without much true virality. People loved Mint. It had a great Net Promoter Score, and it solved a real problem for people. On the other hand, anonymous sharing app Secret spread like wildfire in 2014 reaching 15 million users only to shut down a year later because virality only accounted for the “hot new thing factor”, not the usefulness of the service.
To help us measure true long-term growth potential, we turn to Net Promoter Score. NPS is 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.
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.
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. For more information on some of the best tools to collect feedback read our customer experience technology stack guide.
Step 3. Identify What Experiences Turn Customers Into Promoters
Slack 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?”
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. It can literally tell you what your customers are saying.
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.
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.
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