The Difference Between Transactional and Relationship NPS
One of the biggest advantages of Net Promoter System© is its versatility. From the end of every quarter to just after a major transaction, NPS© gives your business the ability to get real feedback from customers at any moment in the customer lifecycle.
This creates an interesting question: Is it better to survey customers on a regular basis, such as at the end of every quarter, or to survey customers after an important event or transaction?
These two surveying methods are widely used in the world of customer feedback. The first — an annual, monthly or quarterly survey to assess a customer’s relationship with your business — is called relationship NPS, also knows as on-demand NPS.
The second — a targeted survey after an important event or transaction — is called transactional NPS.
Both methods have advantages and disadvantages for your business, as well as specific characteristics that make them best for learning more about how your customers view your product, service, and brand.
In this guide, we’ll look at the key differences between relationship and transactional NPS to help you understand how each survey method can help your business grow, increase retention and generate more meaningful, actionable feedback from your customers.
Relationship NPS: What is it?
Relationship NPS is designed to assess your business’s relationship with its customers. Most businesses send relationship surveys at standard intervals, such as once every quarter, once every six months or once annually.
Because relationship surveys are sent on a scheduled basis and aren’t tied to any specific event, they’re ideal for generating feedback on the strength of your working relationships with clients and customers.
Relationship NPS use general, nonspecific language that doesn’t mention any specific purchase or event. There’s no mention of recent account activity or purchases — instead, clients and customers are asked a standard NPS question.
Transactional NPS: What is it?
While relationship NPS is general and designed to assess the strength of your relationship with a client or customer, transactional NPS is designed specifically to assess the customer’s opinion on a certain transaction.
For example, your company might send a Net Promoter Score survey immediately after a client places an order. In this case, the NPS survey is transactional, as it’s designed specifically to measure how customer’s satisfaction changed after a recent interaction with your product or service.
Transactional NPS surveys use specific wording that mentions the transaction. Instead of being asked how likely they are to recommend your business in general, a customer might be asked to rate your company “based on their most recent purchase or order.”
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Transactional or Relationship feedback?
There’s no “perfect” type of feedback for any business. Both transactional and relationship NPS have different advantages and disadvantages, some of which can make one form of feedback more suitable for your business than another.
For example, transactional NPS feedback is ideal for learning about how a customer’s opinion of your business can change based on a specific product, service or offer.
If you’ve just launched a new product and want to get an accurate feel for how your audience is responding to it, a transactional NPS survey is far more likely to produce meaningful data than a relationship NPS survey.
Because transactional NPS data is always tied to a specific product, service, offer or event, it’s also extremely easy to act on. With a large enough amount of data, you can quickly spot faults, weaknesses, and opportunities to optimize or improve a product based on customer feedback.
Finally, transactional NPS data is immediate. Rather than having to wait months to survey your customers and view any change in sentiment towards your business, you can generate instant data that lets you make effective changes to your product or service very quickly.
There are also weaknesses to transactional NPS. Because it’s tied to a specific event, it’s very time-consuming without automation. Luckily, specialized NPS software makes sending event-based surveys to customers quick and simple.
Relationship NPS also has several major advantages. First, it’s ideal for looking into how your customers view your business over the long term. Since you’ll have multiple data points every year, you can track long-term progress and changes to customer sentiment.
By surveying customers to generate relationship NPS feedback, you’ll also be able to look at changes in sentiment on a granular basis. This can be helpful in discovering weak customer relationships for your team to improve and prioritize.
Finally, relationship survey data is comparable to benchmarks. This means you can compare your business’s Net Promoter Score to industry leaders using NPS Benchmarks, giving you a look at how your product, service and customer satisfaction stacks up to the competition.
The biggest downside of relationship NPS data is the amount of time required to generate it. As simple as NPS automation software makes gathering data, you’ll still need to wait for months to see any improvement in your Net Promoter Score and typical customer sentiment.
How to use transactional survey data
We’ve written extensively on how to use relationship NPS data effectively, from timing your surveys properly to assessing your company’s Net Promoter Score against benchmarks.
However, transactional NPS is a completely different ball game, with new rules, best practices and tactics.
As a general rule, it’s best to focus on transactional surveys when you have a large number of customers, each of whom spends relatively on your products and services. In this situation, the reaction of a customer to a transaction is more important than their relationship with your brand.
This means a B2C business with a $50 product is more likely to benefit from transactional NPS than a B2B agency that sells $10,000 per month professional services.
Transactional NPS is also best used when you need specific information about a new product, service or offer. Since relationship NPS is all about long-term sentiment analysis, it will rarely produce any meaningful transaction-specific insights.
With both types of NPS survey data, there’s a risk of over-surveying your customers. Focus on infrequent surveying — once per quarter, at most, for relationship NPS, and once for every large purchase for transactional NPS data — and you’ll get the best mix of frequency and data quality.
Collect transactional and relationship NPS
Some businesses benefit from a focus on transactional NPS. Others benefit from a focus on relationship NPS. Some businesses, particularly those that sell products and services to the same customers over time, benefit most from a combination of the two forms of feedback.
No matter what type of feedback your business values most, you’ll find it faster and easier to survey your customers, generate actionable feedback and calculate your Net Promoter Score using Retently.
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