Net Promoter Score (NPS)

What is Net Promoter Score (NPS)?

NPS (Net Promoter Score) is a customer loyalty and satisfaction metric measured through a single question: "How likely are you to recommend our product/service to a colleague or friend?" Respondents answer on a 0-10 scale and are categorized as Promoters (9-10), Passives (7-8), or Detractors (0-6).

NPS is calculated as: (% Promoters - % Detractors). The result ranges from -100 (everyone is a Detractor) to +100 (everyone is a Promoter). While simple, NPS has become a standard metric for customer sentiment and loyalty.

Why It Matters

NPS correlates with business outcomes. High-NPS companies grow faster, retain customers longer, and benefit from word-of-mouth marketing. Promoters become referral sources and renew at higher rates; Detractors churn and spread negative sentiment.

NPS also provides early warning of problems. Declining NPS often precedes revenue churn by 1-2 quarters, giving time to intervene. It's a leading indicator of customer health that financial metrics lag.

Benchmarks

• Excellent NPS: 50+ (B2B SaaS average is 30-40)
• Good NPS: 30-50 indicates solid customer satisfaction
• Average NPS: 10-30 is typical for B2B SaaS
• Poor NPS: Below 10 signals significant customer experience issues
• B2B vs B2C: B2B typically scores 10-20 points higher than B2C

Best Practices

1. Survey continuously, not annually - Real-time NPS feedback from recent customer interactions is far more actionable than annual snapshots. Survey after onboarding, support interactions, and milestones.

2. Follow up on every response - Reach out to Detractors within 24 hours to understand and address concerns. Thank Promoters and ask for referrals or reviews. Close the loop with every respondent.

3. Segment NPS by customer type - Calculate NPS by plan tier, industry, company size, and tenure. Understanding which segments are satisfied or unhappy reveals where to focus improvement efforts.

4. Track NPS trends over time - Single NPS scores are less important than trajectory. Is NPS rising or falling? Trends indicate whether customer experience is improving or degrading.

5. Correlate NPS with behavior - Do high-NPS customers actually renew and expand? Do low-NPS customers churn? Validate that NPS predicts outcomes in your specific business.

Common Mistakes

• Surveying too infrequently to get actionable feedback
• Not following up with Detractors, missing recovery opportunities
• Treating NPS as a vanity metric without correlating to actual behavior
• Surveying without closing the loop, so customers feel ignored
• Focusing on the score rather than the qualitative feedback

Key Takeaways

• NPS measures customer loyalty and likelihood to recommend
• Scores above 50 are excellent; 30-50 is good for B2B SaaS
• NPS predicts churn and growth; declining scores precede revenue problems
• Follow up on every response to close the feedback loop
• Segment and trend analysis provides more insight than aggregate scores