And from experience, I know that most of them struggle to determine whether whatever score they\u2019ve received is good (or bad.)<\/p>\n\n\n\n
If you\u2019re one of those people, this guide will help you figure it out. We\u2019ll discuss how the NPS score works and what it means for your brand. I\u2019ll also share with you some guidelines to help you determine how well your company is doing based on your score. Finally, we\u2019ll also touch on some NPS benchmarks to give you more context into your brand\u2019s performance. <\/p>\n\n\n\n
So let\u2019s take it from the top. <\/p>\n\n\n\n
What is a Good NPS Score for SaaS?<\/h2>\n\n\n\n
A Net Promoter Score (NPS – the term is a registered trademark of Bain and Co, by the way) is a simple, percentage-based metric that reveals customer satisfaction with a brand or product. <\/p>\n\n\n\n
However, unlike other customer satisfaction surveys<\/a> like CSAT<\/a>, NPS focuses not on direct satisfaction from using a product. Instead, it measures whether customers find the product so useful that they\u2019re willing to tell others – like their friends and family – about it. <\/p>\n\n\n\n The most common NPS question asks the person to rate their likelihood of recommending the product to others directly:<\/p>\n\n\n Note – You can follow the above question with another open-ended one. We refer to it as the follow-up NPS question. <\/p>\n\n\n\n However, at its core, the survey uses the above rating question to discover, in percentage terms, how many of your customers find the product so useful that they are willing to recommend it to others.<\/p>\n\n\n\n (NOTE – If you\u2019re interested in learning more about various questions to ask in such a survey, take a look at my <\/em>guide to NPS questions<\/em><\/a>.)<\/em><\/p>\n\n\n\n Based on the ratings, the company, then, can divine its user base into three categories:<\/p>\n\n\n\n The thing is – The rating allows you to identify, in percentages, how many promoters, passives, and detractors you have. <\/p>\n\n\n\n However, that\u2019s not your company\u2019s NPS score. <\/p>\n\n\n\n The actual NPS score represents your overall net promoter score. <\/p>\n\n\n\n You calculate it using a simple formula:<\/p>\n\n\n\n Total percentage of promoters \u2013 Total percentage of detractors = NPS Score<\/em><\/p>\n\n\n And that\u2019s where things start to get tricky. <\/p>\n\n\n\n Why? Because it\u2019s easy to look at the division of customers into the three categories I mentioned above. <\/p>\n\n\n\n It\u2019s also quite easy to understand those metrics. <\/p>\n\n\n\n For example, let\u2019s assume that my company\u2019s latest NPS survey delivered the following results:<\/p>\n\n\n\n Looking at it, I can see that the majority of my customers love Refiner. They\u2019re also happy to tell others about it. Great. Those numbers above also suggest that I am doing something right. Plus, that I could expect some organic growth through word-of-mouth. <\/p>\n\n\n\n Overall, brilliant!<\/p>\n\n\n\n Of course, there\u2019s also the issue of detractors. At 20%, the number does seem quite high. I might decide to dig deeper and uncover why those people aren\u2019t happy with my product. I could send them follow-up questionnaires, interview them, and figure out how to deliver a better service. <\/p>\n\n\n\n 20% is quite a high number, after all, and as a SaaS founder, I\u2019d prefer to retain those customers for longer. <\/p>\n\n\n\n But when I apply those numbers to the NPS score formula above, I get a single value of 45. <\/strong><\/p>\n\n\n\n And that, I have to admit, tells me absolutely nothing. <\/strong><\/p>\n\n\n\n Nada.<\/strong><\/p>\n\n\n\n Zilch.<\/strong><\/p>\n\n\n\n Yet, that\u2019s what NPS delivers, ultimately. That\u2019s also why so many businesses struggle to make sense of the survey they just ran. <\/p>\n\n\n\n I promised to shed some light on this, so let\u2019s get to that, then. And first, we must address why it\u2019s hard to provide one good, solid NPS benchmark.<\/p>\n\n\n\n\n Most SaaS founders I talk to (Refiner works primarily with software companies) expect an NPS benchmark they could compare themselves to. <\/p>\n\n\n\n Many of them feel disappointed when I tell them that such a thing doesn\u2019t really exist. <\/p>\n\n\n\n But that\u2019s what it is. Although you might find NPS benchmarks elsewhere on the net, you must remember that the score is probably, one of the most challenging metrics to benchmark. <\/p>\n\n\n\n (This also means that many of the benchmarking datasets you find do not paint the whole picture.)<\/p>\n\n\n\n There are many reasons for that:<\/p>\n\n\n\n What\u2019s more, many of those factors would be relevant to the company only – its product, the price (and the relationship between the price, product, and perceived value), for example. <\/p>\n\n\n\n Similarly, the company\u2019s relative performance in its industry can affect the score. Satisfaction in services, for example, depends largely on the client\u2019s preference and their perception of the price. As a result, NPS scores among service providers can vary between extremes, making benchmarking practically impossible. <\/p>\n\n\n\n Some industries are famous for ridiculously low customer service<\/a>\u2014airlines, insurance companies, banks, to name a few. So naturally, the likelihood of those companies receiving high NPS scores is unlikely. <\/p>\n\n\n\n That said, not all airlines deliver poor customer service. But their scores might be affected because of the overall negative perception of the industry at large.<\/p>\n\n\n\n The result – Well, the idea of what constitutes a good NPS score might differ greatly between industries. <\/p>\n\n\n\n Changing a builder to another provider is easy. In most cases, the new provider can pick up where the previous one left off without much trouble. <\/p>\n\n\n\n But changing an accountant, a bank, or insurance company is a completely different cup of tea. You may have a whole history with the provider. It\u2019s not going to be that easy for the new one to replicate the same level of relationship with you. Similarly, moving to another provider might mean jumping through many hoops and going through an adjustment period that can also result in financial losses for a time. <\/p>\n\n\n\n In such a case, you might find yourself sticking with the current provider and tolerating their shortcomings regarding product or service delivery. <\/p>\n\n\n\n This also means that you might be likely to rate them higher in the NPS survey. Because choosing a lower rating could prompt you to consider switching\u2026<\/p>\n\n\n\n SaaS products solve serious business pains, typically. Accounting or invoicing software helps companies manage their finances and get paid faster. Live chat software will help them connect with customers with ease. Refiner, a customer survey software<\/a>, helps brands evaluate their customer satisfaction. <\/p>\n\n\n\n Naturally, anyone using these products will have a strong engagement with them. In many cases, their business\u2019 existence depends on those products.<\/p>\n\n\n\n But the situation is different for products with a lesser impact on the person\u2019s life. In such a case, the person might not even notice if a product suddenly disappears. <\/p>\n\n\n\n Take online record stores, for example. Sure, they\u2019re important for any music fan. But there are so many such stores out there. So even if one store closes, a customer will likely find another one to buy their records from relatively easily. What\u2019s more, they, most likely, get their records from several stores anyway. <\/p>\n\n\n\n In other words, their engagement with the brand is different and less personal. <\/p>\n\n\n\n How does this affect the NPS score? Well, because the engagement with the survey will be different between those two examples above. A SaaS customer might be more likely to consider their reply deeply and provide very accurate feedback. To the other customer, the NPS question might not even be relevant. <\/p>\n\n\n\n This isn\u2019t a largely considered issue regarding a good NPS score. But it can affect benchmarking quite seriously. <\/p>\n\n\n\n You see, in some countries, a rating of 8\/10 will be considered great. In others, it might mean nothing more than \u201cOK.\u201d<\/p>\n\n\n\n Such discrepancy in the perception of the score means that any benchmarking data unless it relates to scores collected from a single location, will not paint the whole picture simply. <\/p>\n\n\n\n Now, just to be clear, my goal for stating all of the above isn\u2019t to discourage you from identifying your good NPS score. But, hopefully, it explains why it\u2019s so hard to find uniform data and NPS benchmarks. <\/p>\n\n\n\n And having said all that, there are ways to determining YOUR good NPS score. Let\u2019s take a look at them now. <\/p>\n\n\n\n First, let\u2019s cover the \u201crules of thumb\u201d regarding NPS scores. <\/p>\n\n\n\n A quick note about those \u201crules of thumb.\u201d They are generic. They don\u2019t take any of the challenges we discussed above into consideration. So, treat them as an indication of how well you\u2019re doing only, and dig deeper. <\/p>\n\n\n\n (Well, the above is true unless you got a minus score, of course. In such a case, no further research is really necessary.)<\/em><\/p>\n\n\n\n Yes, I know. I told you all about the challenges and the cons of NPS benchmarks. But if you can find any such data, it might give you some indication about your industry averages. <\/p>\n\n\n\n Now, to be clear – It\u2019s not something that I\u2019d base my research on entirely. <\/p>\n\n\n\n But it could be a good starting point for evaluating your score further. <\/p>\n\n\n\n NPS is versatile. It\u2019s not often used to its full potential, though. Many companies research only the overall likelihood of a person recommending their product or service. <\/p>\n\n\n\n But you can evaluate the same attitude based on the person\u2019s other interactions with your company. <\/p>\n\n\n\n These micro-surveys can help you dive deeper into the areas of your business customers find satisfactory or not. <\/p>\n\n\n\n You know – Not all channels you use to send the survey – email, website widget, live chat link, etc. – deliver the same results. <\/p>\n\n\n\n Or else, not all customers respond the same way to email surveys or widgets. For example, widgets might generate a spur-of-the-moment response, while the email might create a more intentional answer.<\/p>\n\n\n\n Needless to say, evaluating scores by channel might deliver a clearer insight into your customers\u2019 attitudes towards your product or the brand. <\/p>\n\n\n\n Finally, don\u2019t use a single score as a definite indicator of your customer loyalty. Instead, run NPS surveys regularly and use the very first score you got as the benchmark. <\/p>\n\n\n\n Over time, you will quickly see whether your score is improving (i.e., more customers become promoters). Compare each score with changes or initiatives you launched before that to see what moves the needle in the right direction and double down on that. <\/p>\n\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Are you wondering what a good NPS score for your SaaS brand is? Looking for NPS benchmarks for SaaS to compare your performance with? You’re in luck. That’s exactly the information you’re going to find in this guide. We’ll cover: So, let’s get to it… Why is benchmarking NPS so important to your SaaS? NPS […]<\/p>\n![\"\"](\"http:\/\/ec2-34-253-215-75.eu-west-1.compute.amazonaws.com\/wp-content\/uploads\/2021\/07\/Screenshot-2021-07-07-at-17.29.04-1024x487.png\")
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How to Calculate Your NPS Score<\/strong><\/h2>\n\n\n\n
![\"NPS](\"http:\/\/ec2-34-253-215-75.eu-west-1.compute.amazonaws.com\/wp-content\/uploads\/2021\/07\/NPS-score-formula-1024x384.png\")
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The Challenges with Benchmarking and Evaluating NPS Scores<\/strong><\/h2>\n\n\n\n
Many different factors can affect NPS scores <\/h3>\n\n\n\n
NPS scores vary greatly between industries<\/h3>\n\n\n\n
Customers have different tolerance levels across industries too<\/h3>\n\n\n\n
Similarly, customer engagement will differ between products<\/h3>\n\n\n\n
Finally, different cultures will express \u201cgood\u201d in different ways<\/h3>\n\n\n\n
How to Determine a Good NPS Score for your SaaS<\/h2>\n\n\n\n
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Here\u2019s how to decide whether your NPS score is good or not. <\/h3>\n\n\n\n
#1. Compare with known benchmarks in the industry<\/h4>\n\n\n\n
#2. Segment the score to identify how various specific areas of the business\/product perform<\/h4>\n\n\n\n
#3. Segment the score by channel <\/h4>\n\n\n\n
#4. Benchmark yourself <\/h4>\n\n\n\n