SaaS NPS Guide: Benchmarks + How to Measure
Sure, your customers might like you.
But do they like you enough?
One of the best ways to determine that is through their likelihood of promoting your brand to others.
Enter: Net promoter score (NPS).
It’s a simple yet effective metric that can help a SaaS company understand how its customers perceive their products, services, and overall brand.
Now you might be wondering…
In this article, we’ll explain all you need to know about the net promoter score in detail— what it is, how to conduct an NPS survey, the net promoter score formula, and best practices to improve your NPS score.
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This Article Contains
- What Is SaaS NPS?
- 6 Essential Steps to Create a SaaS NPS Survey
- Do’s And Don’ts When Creating Your NPS Survey
- Importance of SaaS NPS Surveys
- 4 Best Practices to Improve SaaS NPS
Let’s dive in.
What Is SaaS NPS?
Net Promoter Score, or NPS, is a metric that quantifies customer satisfaction and loyalty through a simple survey.
The survey typically asks, “On a scale of 1-10, how likely are you to recommend (software name) to your friends and family?”
It’s followed by an open-ended question asking what can be improved or why they rated the product as such.
Unlike other SaaS metrics that measure only customer satisfaction, NPS can shed light on:
- Customer happiness
- Customer experience
- Customer loyalty
Don’t confuse it with the customer satisfaction score (CSAT).
NPS tracks long-term customer loyalty, while the customer satisfaction score tracks short-term customer loyalty.
Now that we got that out of the way, let’s get back to our NPS breakdown:
What Does an NPS Survey Look Like?
Here’s a sample NPS survey from WPForms:
When Should Companies Start Tracking for NPS?
The NPS metric is used by a wide range of companies across different industries, like retail, telecom, health care, and air transportation.
In the SaaS industry, most companies would start tracking NPS once they move past the initial traction stage— a phase where customer loyalty slowly grows.
During this phase, the customers that have tried your product since its launch are probably going to stay for some time, especially if they like your product.
Tracking NPS from this stage onwards is really helpful as you get to know how your current customer base feels about your product. You’ll be able to gain insights into what you need to work on to attract even more customers.
So now, how do you track your net promoter score?
6 Essential Steps to Create a SaaS NPS Survey
Creating an NPS feedback form is pretty straightforward, but ensuring the survey is a success is a different story.
Let’s see how you can create a successful NPS survey. 10+
1. Plan the Survey
There are two ways to conduct a net promoter score survey:
- In-app NPS survey: Here, pop-up messages appear in the app after the customer interacts with a particular feature. Or you can send an in-app notification with a link to the survey after a specific milestone.
- Email NPS survey: Here, you send your customers a personalized email containing the survey link after they reach a milestone or make a subscription payment.
Both are just as effective when getting responses, but you can do both simultaneously if you want a larger sample size.
How often should you measure NPS?
Another thing to consider is when to launch your NPS survey.
There’s no point in sending a survey if your users have yet to try out the new feature or if you’ve just onboarded a new customer.
Well, they haven’t got enough time to experience the new features.
The best time to send one out is after a specific milestone— like one month after launching the new update or after onboarding your new client. By then, your users would have experienced the software enough to give spot-on responses.
You should also consider how long you’re going to conduct the survey. Most NPS feedback forms last for a month. This is so you can get enough responses for the NPS score to become significant.
2. Create the Questionnaire
A net promoter score survey typically consists of around two to three questions, and the first one is the most important!
All NPS surveys typically start with this one NPS question— or a variation of it:
“On a scale of 0-10, how willing are you to recommend (software name) to your friends and family?”
The next two questions are typically open-ended to give respondents more freedom in voicing their concerns about the software. Like:
“What is the reason for your score above?”
Or something like this:
“Are there any other concerns that we should know about?”
The first NPS question can give valuable insight into how much a customer enjoys the application, and the next few can help identify which features need improvement. But keep in mind, you don’t want the survey to be lengthy.
You should also include a small message thanking the respondents for their input— this helps make your users feel appreciated.
3. Test the Survey
Once you’ve drafted the survey, it’s best to test it out by sending it internally— like beta testing but with your team. This helps ensure that the survey goes well and there aren’t any bugs.
If there’s any issue with the survey, you can fix it and test it again. When all is settled and ready for launch, you can confidently send the survey to your customer.
4. Run the Survey and Wait
Finally, it’s time to launch the survey. You can let your tech team update the software to include a pop-up notification or use NPS survey tools like Retently, SurveySparrow, and Qualtrics.
Regardless of which method you use, once the survey is out, all you have to do is wait.
But what if your response rate is very low even after a week or so?
You can send a reminder notification or email to gently remind them to fill in the survey.
5. Calculate Net Promoter Score
Once you have your responses, it’s time to calculate the SaaS NPS score.
First, categorize your responders as:
- Promoters (rating of 9-10): These respondents are the happy customer group, and they’re willing to promote your SaaS product.
- Passives (rating of 7-8): The 50/50 or “meh” customer segment. They’re not exactly happy with your software, nor do they hate it.
- Detractors (rating of 0-6): The dissatisfied or unhappy customer group— is most likely to switch to another competitor.
Once you’ve separated your respondents, you can start calculating your NPS metric score. Here’s how it’s done:
|NPS = Percentage of Promoters – Percentage of Detractors|
Now, let’s look at an example.
Suppose your survey receives 100 responses, with 60 promoters, 25 passives, and 15 detractors.
Your NPS score would be = 60% – 15%
From the score above, it means that there’s a 45% chance that your customer base will stay loyal to your product and recommend it to others. Although 45% seems like a small number, it’s definitely better than getting a zero or negative score.
Even so, what exactly is a good NPS score range?
Good NPS Range
The NPS rating can range between -100 (if your respondents are all detractors) and 100 (if your respondents are all promoters).
Getting a -100% or 100% NPS metric is impossible because your product must be super horrible or unrealistically excellent.
So what is a good net promoter score for SaaS products?
The industry average NPS is 31%, so any score above 31% is considered a good score.
Even so, you shouldn’t just focus on reaching the industry average NPS score— instead, aim for higher net promoter scores (we’ll get into how to improve your NPS score a little later).
SaaS Net Promoter Score Benchmarks
For a SaaS net promoter score, there are two different benchmarks:
1. Internal Benchmarks
This involves looking at the net promoter score you’ve received in the past and comparing it with your current score. Ideally, this only works if you’ve kept the same parameters such as how long you ran the survey.
In case your NPS rating has dropped, something’s gone wrong and needs addressing ASAP.
2. External Benchmarks
Refers to comparing your business’s NPS with the industry benchmark, or those in the same region as you.
When comparing your net promoter score with an NPS benchmark, you should also consider some factors that can affect your NPS:
A. Niche Competition:
More competitive niches will have a varying range of good NPS scores compared to a less competitive and unique niche.
For example, a unique industry, like the luxury electric automobile industry, would have a higher average NPS, compared to an industry that’s flooded with competition, like the regular automobile industry.
When there’s more competition, there’s more options for customers. So they can be more discerning and jump ship easily. Additionally, the more niche a market, the easier it is to satisfy niche interests!
B. Customer Tolerance Levels
Some customers are willing to give multiple chances to the software they’re using, while others might immediately leave at the first red flag they find.
For example, customers using tools that handle sensitive information, like finance software, will have a much lower tolerance level for inadequate service.
C. Vendor Switching Barriers
This is closely tied to our first point about competition.
SaaS has a considerably low entry and exit barrier, making it easier for an unhappy customer to switch from one brand to another. This is because of the similarity in products and varying subscription prices available in the market.
When this is the case, it’s much easier for a customer to be stingy with their NPS scores as there’s so many other options available.
If this is your first time tracking net promoter score, don’t be discouraged if you score less than the industry average NPS.
As long as your first NPS score is higher than 0%, you have more promoters than detractors, and there’s still room for improvement.
Now, let’s see how you can analyze your NPS results.
6. Analyze the Results
After calculating your NPS results, the next thing to do is to analyze them.
Here’s how you can do it:
- Categorize the responses: Separate the responses based on payment plans, user demographics, specific features, customer segment, etc.
- Take note of follow-up responses: Identify similar feedback or issues faced, and tag them as positive, negative, or neutral comments. Use these comments as keynotes for planning the next update.
- Cross-reference with previous surveys: Observe any changes in your NPS score— did it improve, is there a change in respondent demographics, did the latest update make any progress, etc.
- Contact your respondents: Connect with them, and thank them for their responses.
- Try upselling or cross-selling your product: Offer your other products or price plans to the promoters that might suit them better. But remember, don’t make it sound too pushy or forceful— remain genuine and helpful.
- Address specific feedback immediately: Identify crucial feedback that indicates problems with the software and solve them ASAP. 🏃💨
- Follow up with your detractors: Contact them and offer compensation or a solution to their issue with your product. The goal here is to make them give you a second chance.
- Plan immediate updates: Analyze the open-ended responses, and identify which features need the most improvement and which are missing but often requested. Use these points as insights for immediate future updates.
When you’ve thoroughly analyzed your NPS result and responses, it’s time to put your findings to good use. You can use your NPS score to improve customer success, launch appropriate product or service updates, and reduce customer churn.
You can identify which feature needs updates or debugging using the NPS score and NPS data you’ve received. The faster you solve the issues a customer faces, the higher the chance they might stay with your product and recommend it to others. It also increases customer happiness.👍
So how do you design an NPS survey that’s apt for getting the desired results?
Here are some tips.
Do’s And Don’ts When Creating Your NPS Survey
Just like creating an advertisement, NPS surveys should make your customers feel like they want to give a response. Here are the do’s and don’ts to increase your response rate:
- Create your NPS survey page in line with your brand image.
- Give your NPS survey a simple yet effective title to help your respondents understand the purpose of your survey.
- Keep your questionnaire short and simple.
- Use personalized notifications— you can include the user’s name, period of usage, and frequently used features.
- Add a checkbox asking the respondents for permission to contact them for further discussion regarding their experience.
- Use too many colors, boxes, or tacky designs 🤮.
- Write long and winding questions — you’ll confuse your respondents and yourself later.
- Spam your customer with notifications or emails about the survey.
- Not following up on your users’ responses — it makes them feel like filling out the survey was a waste of time and they’re unappreciated.
- Close the survey too early or let the survey sit for too long— the data collected wouldn’t be accurate or become outdated.
Now, if you’re wondering why you should track net promoter score, let’s discuss that next.
Importance of SaaS NPS Surveys
Here are some reasons why conducting SaaS net promoter score surveys is essential:
- Get insights about customer satisfaction: See how your customer base feels about the product and gain insights into customer experience, customer churn, customer satisfaction, and customer retention.
- Create a feedback loop: Gain insightful feedback from your loyal customers and use them as important keynotes to improve customer experience and satisfaction.
- Identify a product’s strengths and weaknesses: Use customer feedback to identify bugs or issues that can be fixed to improve your software, and see which features you could upsell.
- Anticipate future growth and churn rates: Predict your company’s churn by comparing your current net promoter score with the industry benchmark or a previous Saas NPS score.
Wondering how you can boost your net promoter scores?
Here’s what you can do:
4 Best Practices to Improve SaaS NPS
Here are a few ways you can improve your business’s NPS score:
- Always turn customer feedback into action: Always respond to positive and negative feedback. Make sure to close the feedback loop with your customer base, and let them know that their concerns are heard.
- Create in-depth onboarding modules: Providing your customers with enough onboarding modules can help them understand the products better. It’ll also be best if you can provide video tutorials or interactive walkthroughs to help your customer base to navigate through your features easily.
- Provide adequate training for your customer support team: Often, a low net promoter score is caused by a bad customer support experience. To prevent that, it’s best to train your support team with enough training and guidance to give the best customer service possible.
- Engage in omnichannel customer support systems: Having multiple channels to get support can help resolve customer queries quickly. Offering a self-service chatbot, live chat, email support, and even tele-support can allow your users to choose their preferred channel, resulting in better customer satisfaction.
Ultimately, higher customer satisfaction = more promoters.
So, if you want to boost your NPS score by the next survey campaign, you should give these points a serious thought.
Grow Your SaaS Product With NPS!
Tracking SaaS net promoter score is important in understanding how your loyal customers feel about the product. Using the NPS data collected, you can also plan for the future and what changes need to be added to the software.
From identifying bugs to product strengths, and weaknesses, the short questions in an NPS survey can give valuable insight into your product.
So, if you’re itching to see if your product is doing well, the net promoter score is the way to go!