In the SaaS universe, where customer satisfaction reigns supreme, the Net Promoter Score (NPS) is your trusty “North Star.” Bet you’ve bumped into NPS surveys after flight turbulence, a cushy hotel stay, or those chatty app customer service sessions, right?
What’s the real NPS secret sauce?
It’s not just a number; it’s like X-ray vision for reading customer vibes.
Think of it as your backstage pass to understanding customer love and excitement — or the opposite, but we hope not.
We’re spilling the beans on what a good NPS score is and why a good NPS score is a SaaS game-changer. Ready to supercharge your success? Let’s dive in!
Table of Contents
- What Is NPS an Indicator Of?
- How To Calculate Your NPS Score
- How Measuring NPS Survey Data Can Help Improve Your Business
- How Is NPS for SaaS Different Than Other Industries?
- How To Run an NPS Survey for SaaS
- AnnounceKit: Measure Customer Satisfaction and Increase Loyalty With Our NPS Software
What Is NPS an Indicator Of?
NPS scores give a unique perspective into customer experience. Think of them as a temperature reading on how your SaaS offering or service is being received.
Those scores can then influence the way your business operates.
The Net Promoter Score gives insight into a customer’s happiness with your product, and subsequently their loyalty. Happy customers share their content with others, so an NPS score can also be a key indicator in measuring future “promoters”.
NPS scores are a simple, but effective, metric that SaaS companies can use to better understand their performance through a customer’s eyes.
How Does an NPS Score Work?
NPS offers a straightforward measurement of customer sentiment and gives, essentially, a roadmap for how to implement meaningful changes to grow the customer base and keep recurring revenue high.
Because customer satisfaction holds so much weight for SaaS companies, NPS scores often influence the way sales and marketing might address or improve customer loyalty initiatives.
It’s important to note that measuring performance is always relative to what benchmarks equate to success for a business, so what is considered a “good” NPS score for SaaS can vary.
Think of the scale of “good” to “bad” NPS scores as a variation of the “beauty is in the eye of the beholder” sentiment.
What Is a Good NPS Score for SaaS?
Industry, focus, inputs, competition, the value of certain metrics to the company, and the unique customer base will all factor into what’s considered a “good” NPS for a SaaS company.
Industries aside, the higher the NPS score, the better, but the averages will greatly differ from industry to industry.
Generally speaking, the relative accepted industry guideline for interpreting NPS scores for SaaS companies rank:
- A positive NPS from +1 to +100: An NPS score in this range would suggest that a SaaS company has more promoters than detractors.
- A neutral NPS from 0 to +1: An NPS score sitting around zero may suggest that the number of promoters and detractors are about the same, indicating a need for improvement to convert more customers into promoters.
- A negative NPS from -100 to -1: A negative NPS score indicates that a SaaS company has more detractors than promoters and that significant changes need to be made to improve customer contentment and advocacy of your service.
Across the board, the general trends highlighted in NPS scores can give valuable insight into customer satisfaction and how an audience is responding to attempted strategic improvements over time.
What Is the Average NPS Score in SaaS?
The 2023 average NPS score in SaaS hinges around 40-41.
Industry-leading Saas NPS scores include:
- Zoom: 72
- Netflix: 67
- PayPal: 65
While the industry average is relative, evaluating your NPS score compared to others in the industry empowers you to make informed decisions based on real-time feedback.
Why Is Your NPS Score Important?
Net Promoter Score is a powerful metric that is arguably the most relevant for measuring customer loyalty.
An NPS score is vital in gauging:
- Word-of-mouth influence: Positive customer experiences and recommendations have a significant impact on business success. NPS software helps you identify and nurture promoters while mitigating the risk of negative word-of-mouth.
- Customer satisfaction and loyalty: Understanding your customer’s likelihood to recommend your product provides a clear indicator of their satisfaction and loyalty. Use NPS to drive customer-centric strategies and foster long-term relationships.
- Competitive advantage: By benchmarking your NPS against industry standards, you can gain insights into how you stack up against competitors, and identify areas where you excel and how you differ.
It also enables your SaaS company to make data-driven decisions by using both quantitative and qualitative data to optimize your product, service, and customer experience.
NPS data is relevant to every level of a SaaS organization, from executives to frontline staff.
SaaS companies can use their NPS scores to accurately forecast business growth, customer loyalty, and overall brand satisfaction to better understand the factors that drive repeat business and identify opportunities for improvement.
So, (asking for a friend) how do we actually put an NPS into motion?
That’s where AnnounceKit comes in — Our software platform requires no development or design resources; aka, it’s as user-friendly as you can get.
Set up personalized surveys and start gathering feedback…without having to Google every step of the setup.
How To Calculate Your NPS Score
SaaS companies typically send out NPS surveys to their customers with one question: “On a scale of 0 to 10, how likely are you to recommend our product to a friend or colleague?”
The NPS score can range from -100 to +100 and is based on the responses to this question.
How the customer responds will segment them into one of three groups:
- Detractors (NPS 0 to 6) are the customers who have had negative experiences with your service or product and are therefore unlikely to recommend it.
- Passives (NPS 7 or 8) aren’t regarded in the NPS equation.
- Promoters (NPS 9 or 10) are loyal company enthusiasts who are satisfied with your product or service and would recommend your product to others.
To calculate your NPS score, take the percentage of promoters minus the percentage of detractors.
For example, if 60% of respondents were promoters and 20% were detractors, your net promoter score would be 40 — right on average for an SaaS company. Pat yourself on the back.
What Is a Good NPS Score for B2B SaaS?
The average Net Promoter Scores for B2B industries range from 39 to 65, with the B2B SaaS average sitting around 40-41.
Looking at that range, we can assume anything above that 40-41 score would reasonably be considered “good”.
The higher your NPS is, the more likely it is that your customer referrals will convert into new leads, hence more revenue for your company.
Evaluating an NPS score should be part of a larger customer improvement movement, with a focus on understanding what drives the score to produce long-term customer success.
Leverage AnnounceKit’s NPS benchmarking tools to compare your scores against industry standards and stay up-to-date with how your NPS stacks up against your competitors.
What Is a Bad NPS Score for B2B SaaS?
Now for where you’d rather not be — in the B2B SaaS world, an NPS under zero, shall we say, “leaves room for improvement.”
But remember, beauty (or what’s considered “good”, anyway) is in the eye of the beholder. A strong, or poor, NPS score will vary from company to company based on their:
- What metrics they value; and
- Their unique customer base.
How Measuring NPS Survey Data Can Help Improve Your Business
What’s most important when evaluating an NPS score is to look at the trends and changes over time.
Regularly measuring NPS and taking strategic actions based on customer feedback is essential for maintaining and growing a strong customer base in the SaaS industry.
Collecting additional qualitative data and feedback from your customers can provide deeper insights into their specific needs and areas for improvement.
AnnounceKit’s NPS software gives you new insight to better understand and enhance your customer loyalty.
With Announcekit you can make data-driven decisions based on NPS feedback (the roadmap to the changes your customers will respond to) and drive improvements to better optimize your customer experience.
How Is NPS for SaaS Different Than Other Industries?
Across industries, the basic measurement of customer loyalty and satisfaction is the same — but there can be some differences in how NPS is used and interpreted in the context of SaaS, because of the distinct characteristics of the industry’s business model.
SaaS NPS scores are most helpful when coupled with other industry-specific metrics, including:
- Customer Lifetime Value (CLV)
- Churn rate
- Monthly recurring revenue (MRR)
- MRR Growth rate
- Renewal rate
- Revenue retention
How To Run an NPS Survey for SaaS
The first, and most strategic decision you’ll likely make, is where to send your NPS survey — email, website, social media, etc.
As you’re building your NPS survey, carefully consider:
- Which type of NPS survey you want to run.
- How your NPS questions are worded and how many you include.
- A clear survey name and title description.
- Your visual elements and branding.
- A sign-off to thank respondents for their time.
AnnounceKit simplifies survey distribution to a specific audience, allowing you to:
- Segment your audience: Don’t want to send a survey to your entire customer base? No problem. Customize your NPS surveys to gather feedback on specific touchpoints or overall user experience. No coding or design resources required.
AnnounceKit: Measure Customer Satisfaction and Increase Loyalty With Our NPS Software
Our suite of solutions features NPS software with an intuitive dashboard that visualizes and segments feedback in real time, allowing you to:
- Identify key drivers behind customer happiness
- Monitor and track trends, changes, and improvements
- Generate insightful reports for data-driven decision-making
- Identify seasonal variations
- Assess the impact of your initiatives on customer sentiments
Our robust data analytics help can even help increase your NPS score over time by identifying performance trends, isolating areas for improvement, and assessing the impact of any changes made.