Net Promoter Score (NPS)

What is Net Promoter Score (NPS)?

NPS is a widely used method in the SaaS industry to gauge customer sentiment. It is calculated by asking customers a simple question: 'On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?' Based on their responses, customers are categorized as Promoters (score 9-10), Passives (score 7-8), or Detractors (score 0-6). The NPS is then calculated by subtracting the percentage of Detractors from the percentage of Promoters. A high NPS indicates satisfied customers who are likely to advocate for the product, while a low NPS suggests areas for improvement.

A metric used by SaaS companies to measure customer loyalty and satisfaction based on the likelihood of customers to recommend the product or service to others.

Examples

A SaaS company saw their NPS increase from 20 to 40 after implementing new customer support initiatives, leading to a rise in customer referrals and retention.

Another SaaS company used NPS feedback to identify common pain points among customers, resulting in product updates that addressed these issues and improved overall satisfaction.

Additional Information

NPS is a valuable tool for SaaS companies to track customer loyalty over time and make data-driven decisions to enhance the customer experience.

Regularly surveying customers and analyzing NPS trends can help SaaS companies identify areas for growth and prioritize customer satisfaction initiatives.