NPS for SaaS: Calculation, Benchmarks, and Growth Strategies

Contents

What is NPS? (Net Promoter Score definition)
How to Calculate Net Promoter Score? (NPS Formula)
What’s a good Net Promoter Score for product companies? [SaaS NPS Benchmark]
Transactional vs. Relational NPS Programs
How to Utilize NPS Survey to Grow Your SaaS Product & Marketing?
Final Takeaways on NPS survey for SaaS
Frequently Asked Questions

Have you ever wondered why some SaaS companies consistently outperform their competitors? And why do some fail to leave a mark?

It’s pretty simple.

The answer lies in their ability to measure and act on customer satisfaction.

We believe that success in business results from your impact on the people you touch. Many companies completely ignore this fundamental idea.

If you’ve been in the SaaS business for long, you know how crucial a high retention rate is for survival, especially in today’s complex business landscape. You might be collecting various metrics, yet still struggle to keep track of customer loyalty and customer satisfaction.

The solution? You need a solid metric for the job – the Net Promoter Score (NPS).

It’s a powerful metric that cuts through the noise. By asking one simple question, you can gauge customer loyalty, predict growth potential, and discover actionable insights.

In this article, we’ll explain everything you need to know about net promoter score, like its definition, how it’s calculated, and how you can use NPS to improve your product, marketing, and retention rate.

What is NPS? (Net Promoter Score definition)

Before we get into the nitty-gritty details, let’s start with the net promoter score definition.

NPS is a powerful customer loyalty metric that measures how likely your customers are to recommend your product or service to others.

It was first developed by Bain & Company in 2003 and has been adopted by millions of businesses worldwide since then. It’s a time-tested metric that is based on a single question:

“On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?”

Today, thousands of innovative companies, including Apple, Intuit, American Express, GE, Philips, Facebook, Rackspace, LEGO, and more use NPS. Most of them use it to track the loyalty and engagement of their customers.

This simple yet powerful metric has become the gold standard for measuring customer satisfaction and loyalty across industries.

For a SaaS company, NPS is particularly valuable because it provides a clear, quantifiable way to understand customer sentiment and predict future behavior.

The idea is simple – to treat customers so well that they become loyal promoters. This means that customers who are willing to stake their reputation by recommending your product are your most valuable assets – they are advocates of your business who can drive organic growth.

How to Calculate Net Promoter Score? (NPS Formula)

This next section is about net promoter score calculation. An NPS score measures customer loyalty. But, how to calculate the net promoter score?

Based on a single-question survey and reported with a number ranging from 0 to 10, NPS survey respondents are categorized into three distinct groups:

Promoters: These are your loyal and enthusiastic customers who typically respond with a score of 9 to 10. They’re more likely to remain your customers longer and actively recommend your SaaS product to others. They are the ones who fuel your growth.
Passives: These are satisfied customers but are equally vulnerable to competitive offerings. They respond with a score of 7 to 8 but are not enthusiastic enough to promote your product.
Detractors: These are usually unhappy customers who usually respond with a score of 0 to 6. They might damage your brand through negative word-of-mouth. They’re at high risk of churning and could influence others not to try your product. You should keep an eye on them.

The net promoter score formula is pretty straightforward:

NPS = % of Promoters – % of Detractors

For example, let’s say you surveyed 100 customers, out of which you’ve got 40 Promoters (40%), 35 Passives (35%), and 25 Detractors (25%).

NPS = 40% – 25% = 15%

So, your NPS would be 15%.

The final score can range from -100 (if every customer is a detractor) to +100 (if every customer is a promoter). Remember that Passives don’t directly affect your NPS score, though they represent an opportunity for improvement.

What’s a good Net Promoter Score for product companies? [SaaS NPS Benchmark]

Generally, an NPS above 0 is considered good, while a score of 50 or above is considered excellent.

However, what constitutes a good score can vary significantly based on factors like industry, market segment, product maturity, target audience, and so on. So, a low score for you might actually be high for some other industry or vice-versa.

According to NPS benchmarks, the average NPS score for SaaS is 36. So anything above 36 would be considered good, according to CustomerGauge reports.

The creator of NPS says anything above 0 is good, but anything above 50 is considered excellent, and above 80 is world-class. However, these numbers don’t tell the whole story.

For instance, B2B SaaS companies typically see higher NPS scores than B2C products. This is because B2B purchases often involve thorough evaluation processes and long-term commitments.

Enterprise B2B SaaS solutions frequently achieve scores in the range of 30 to 50, while B2C SaaS products might consider a score of 30 or above as strong.

Additionally, different customer segments may have different expectations because no two customers are alike.

Enterprise customers often give lower scores due to higher expectations and complex requirements.
Small business users might be more forgiving but also more price-sensitive.
Technical users typically provide more critical feedback than non-technical users.

However, in highly competitive markets, even a seemingly modest NPS score can feel like a big achievement. What actually matters is how you stack up against direct competitors rather than arbitrary benchmarks.

The numbers tell a different story. The absolute number matters less than:

The insights you gather from the NPS survey and feedback
Your score relative to your direct competitors
The actions you take to improve your SaaS conversion funnel

So, what you can do is maintain an upward trajectory and understand the stories behind your scores rather than focusing on reaching a specific number. Well, the concept might sound simple, but the journey toward building an army of promoters is more challenging than expected.

Transactional vs. Relational NPS Programs

When it comes to NPS surveys, the two most common types are transactional NPS surveys and relational NPS surveys. Understanding the difference between the two can help you gather more targeted feedback and make informed decisions about your product and customer experience.

Transactional NPS (tNPS) is a type of NPS survey that is triggered by specific interactions or events in the customer journey, like a support call. For example, the survey might ask questions about your onboarding experience if you’ve just finished the onboarding process of a new SaaS product.

This is particularly valuable when measuring the effectiveness of your SaaS signup page, as it helps you understand how well your onboarding process meets customer expectations.

For SaaS companies, other critical touchpoints might include:

Following a support ticket resolution
After a renewal or upgrade
Post-feature launch or major update
After completing a key workflow in your product

The timing of the feedback is the key here and is dictated by the timing of the event. The best part is that it provides immediate, context-specific feedback. When a customer rates their experience right after an interaction, you can identify exactly which aspects of your product need immediate attention.

tNPS gives you a granular view of the different areas of your product or service that need improvement.

Relational NPS (rNPS), also called relationship NPS, is a type of survey that measures customer satisfaction and loyalty on a higher level. It focuses on the long-term relationship between your customers and your product.

Unlike transactional NPS surveys, relational NPS programs are not related to any one specific interaction. Typically, these are gathered on a periodic basis (quarterly, monthly, or annually) regardless of specific interactions.

They help you understand:

Long-term customer satisfaction trends
Overall perception of your brand
Strategic product-market fit
General customer loyalty levels
Competitive positioning

Timing might be dictated by multiple factors, but usually within a fixed cycle so that the data can be compared to prior periods.

Which one should you choose?

Ideally, the most effective NPS program will likely collect both transactional and relational measures. If you do both types of measurements, you’ll likely find different NPS results.

You can use relational NPS programs if you need to track long-term trends and overall customer satisfaction. Use transactional NPS surveys to gather feedback about key customer interaction moments.

Additionally, you can compare both metrics to identify any gaps between specific experiences and overall satisfaction.

The fact is that both relational and transactional NPS programs can create both structural and operational changes in the business.

Remember to avoid survey fatigue by spacing out your NPS requests appropriately. Although not all the time, even the most loyal customers of yours can get annoyed if you ask for feedback too frequently.

How to Utilize NPS Survey to Grow Your SaaS Product & Marketing?

The ideas behind NPS seem so simple and intuitive that you may be thinking that implementation will also be simple.

Well, it isn’t.

The SaaS companies that have successfully adopted NPS have learned that it takes time and hard work to establish reliable measurements, to understand what the scores tell you, and to create processes that actually bring about change.

So, after you get user responses, what should you do?

Here’s how you can use the net promoter score survey to drive growth for your SaaS:

Segment Your Survey Results To Find Target Audience (Product & Market Fit)

Segmentation is the key to unlocking the true potential of your NPS survey data. By analyzing NPS responses across different user segments, you can get a more granular view of your customer base and pinpoint exactly where your product-market fit is strongest.

Understanding your target audience isn’t just about demographics – it’s about identifying who truly resonates with your product.

This way, you can identify potential areas of strength and weakness within specific groups, which ultimately allows you to create highly targeted marketing campaigns. For instance, segmentation allows you to identify hidden Detractors and pinpoint the exact cause of their dissatisfaction.

Take inspiration from Superhuman founder and CEO Rahul Vohra, who revolutionized how we think about product-market fit. He developed an engine that systematically measured and optimized product-market fit using survey responses. His approach revealed that by focusing solely on power users who would be “very disappointed” without the product, you can achieve true product-market fit.

Similarly, by segmenting NPS responses, you can identify your most enthusiastic users and understand their patterns and what makes them tick.

For starters, you can break down your NPS responses by:

User role and job title
Location (urban vs. rural areas)
Company size and industry
Revenue tiers or subscription tiers
Usage patterns and feature adoption
Demographics, needs, and behavior
Segmenting customer base before sending out NPS surveys

Look for patterns in promoter responses – they are your loyal customers. What common characteristics do they share? What problems are they solving with your product?

Use these insights to refine your ideal customer profile and focus your marketing efforts where they’ll have the maximum impact. Combine NPS scores with behavioral data to understand customers’ sentiments better.

Encourage Promoters to Leave Reviews & Participate in Case Studies

Your Promoters are more than just satisfied customers – they’re your brand advocates who can significantly boost your social proof and market credibility.

When a customer gives you a high NPS score, it means that he is not only happy with your product but willing to vocalize their satisfaction. This is a golden opportunity to amplify their positive experience. Ask them for a case study or testimonial that you can use on your website.

Remember, your NPS feedback is a goldmine of product optimization opportunities.

Create a strategic approach to converting Promoters into brand advocates:

Follow up with Promoters to thank them and invite them to share their experience
Make it easy for them by sharing direct links to popular review platforms like TrustPilot, Capterra, G2, etc.
Offer incentives like extended trial periods or account credits for comprehensive reviews
Identify Promoters who have inspiring success stories to share
Create a structured case study process that respects their time while capturing valuable insights
Share their success stories across your marketing channels (of course with their permission)
If you can, feature them in your customer spotlights or success story blog series

This move allows you to capture both quick wins and strategic areas of improvement. Remember, your goal isn’t just to fix what’s broken – it’s to enhance what’s working well and make it accessible to more users.

Personalize your outreach. High-value Promoters who have been with you for a while might be perfect candidates for video testimonials. Track which Promoters participate in these activities and acknowledge their contributions – perhaps through an exclusive customer advisory board or beta testing program.

Pro tip: Create different tiers of engagement opportunities. Some Promoters might love to leave a review but not participate in a case study, while there might be some who’d probably love to become full-fledged brand ambassadors. Having multiple options is a bonus.

Encourage Promoters to Use Your Refer a Friend Program

Ask your promoters to refer a friend as part of the survey. This is a great way to connect your NPS survey with your referral program. In the end, you can encourage them to recommend your brand and increase referrals.

These customers have already indicated they are willing to recommend your product – making it easy and rewarding for them to follow through. You want your most loyal customers to tell others about you. But, you need to identify these customers first.

Here’s how you can create a seamless transition from NPS survey to referral action:

Immediately after a promoter submits their response, provide them a personalized invitation to your referral program
Offer special incentives exclusive to promoters who participate
Share success stories from other customers who have benefited from referrals
Provide pre-written social media posts and email templates they can use
Consider creating a VIP program for promoters who actively refer new customers

Track the conversion rate from promoter to referrer, and test different incentive structures to optimize your referral program’s performance.

Keep in mind that no two customers are the same. Just because some customer says they’d refer you doesn’t mean he/she actually will. Simply put, not all promoters can be your brand advocates. You can only do that by leveraging the insights from NPS questions so you can understand what they like.

Utilize NPS Results To Find Missed Product Features

Your NPS responses can uncover valuable opportunities for product expansion, allowing you to identify common customer pain points.

Pay close attention to the “why” behind the scores – promoters often highlight features they love, while detractors and passives point to gaps in your offering. Based on their feedback, you may be able to get information about features they might have missed.

Create a systematic approach to feature discovery:

Tag and categorize all feature-related comments in NPS responses
Look for patterns in feature requests across different user segments
Compare requested features against your competitor’s offerings
Assess the potential impact of each requested feature on user satisfaction
Prioritize features that could convert passives into promoters

Do not just focus on explicit feature requests – look for underlying problems users are trying to solve. Sometimes the best product improvements come from understanding what needs to be done rather than implementing exactly what users ask for.

Predict Customer Churn Using NPS Survey Results

NPS serves as an early warning system for potential churn. Consistently engage with NPS detractors because they are the customers who are at high risk of churning. A low NPS score is not just a warning but also a chance to solve customer problems.

By correlating NPS scores with actual churn rates, you can build predictive models that can help you identify and retain at-risk customers before they leave for good.

It might seem like extra work but it’s worth the time and effort.

Implement a proactive churn prevention strategy:

Set up automated alerts for any sudden drops in NPS scores
Create intervention protocols for different risk levels
Track NPS trends over time to identify patterns that precede churn
Develop targeted retention campaigns for different detractor segments
Monitor the effectiveness of your retention efforts through follow-up NPS surveys

When you go the extra mile connecting with your customers after they’ve shared their experiences, it sends a clear message that you genuinely care about them. This simple gesture can turn neutral customers into satisfied customers. And satisfied customers keep coming back for more.

Most importantly, do not wait for customers to become detractors. Monitor passive scores closely. These customers are often one negative experience away from becoming detractors.

Final Takeaways on NPS survey for SaaS

Net promoter Score (NPS) is more than just a number – it’s a comprehensive system for understanding and improving loyalty. By listening to what your customers have to say and making necessary improvements based on their feedback, you can create a better experience for everyone.

This approach helps you identify your most valuable customers, predict churn, optimize your product, and drive sustainable growth.

Remember that success with NPS isn’t about achieving a perfect score, but rather about building relationships that help your business thrive. The key is to act on the insights you gather and focus on converting passives to promoters while addressing detractor concerns.

Frequently Asked Questions

What is the NPS score on a survey?

The NPS score is measured through a survey asking customers to rate their likelihood of recommending your product to others on a scale of 0 to 10. The question is simple but it helps categorize customers into promoters (9-10), passives (7-8), and detractors (0-6). The score provides a clear measure of customer loyalty and satisfaction.

What is a good NPS score?

A good NPS score varies by industry. Generally, an NPS above 0 is considered good, while a score of 50 or above is considered excellent. For SaaS companies, the average score is +36, and a score above 36 is considered good. A score above 80 is considered world-class.

Is 70 a good NPS score?

Yes, an NPS score of 70 is exceptional for any industry, especially in the SaaS industry. This score indicates that your company has a very high proportion of promoters against detractors and suggests strong customer loyalty and satisfaction.

How is NPS calculated?

NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. The formula is as follows:
NPS = % of Promoters – % of Detractors

What are the common NPS survey questions?

Some of the common NPS survey questions typically include, but are not limited to:

How likely are you to recommend our product to a friend or colleague on a scale of 0 to 10?
What is the main reason for your score?
What would make you more likely to recommend us?
What do you like most about our product?
What can we do to improve your experience
Which features do you value the most?
Did our product meet your needs?

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Article by

Ihar Vakulski

Ihar Vakulski is a founder of SaaSFunnelLab, a CRO & Growth agency that helps SaaS companies to optimize every step of their marketing funnel and run paid ad campaigns. He has worked in this niche for over 12 years, served more than 50 unique clients and has a lot to share.