Net Promotor Score - Essentials

May 2, 2020

In short, NPS it is the SaaS industry standard for measuring customer loyalty. It aims at understanding customer loyalty by gauging answers to simple questions such as how likely customers are willing to recommend the product to their friends or colleagues.  

The scoring is done from 0 to 10 and every customer is grouped (Detractors, Passives and Promoters) based on the score chosen.

Customer Grouping

Detractors: Score level 0 – 6

These are customers who are unhappy with your product. CSMs must be extra careful with such customers as they can hurt brand value through negative word of mouth.

Passives: Score level 7 – 8

Indifferent customers who can be turned into Promoters by helping them achieve what they want within the product. On the other hand, they could also very easily switch to competitor products.

Promoters: Score level 9 – 10

These are loyal customers who keep buying and referring to others.

NPS Survey Questions

On a scale of 0-10, how likely are to recommend (product/ service name) to a friend or colleague?

On a scale of 0-10, how likely are you to recommend our business to a friend or colleague?

Follow Up Questions To the Survey

What is the primary reason for your score?

How can we improve your experience?

What can we do to make you a happier customer?

How to Calculate NPS

The calculation is straightforward – out of all the respondents, NPS is the difference between percentages of Promoters and Detractors. For example, if Promoters make up 30% and Detractors 20%, then the NPS will be 30 – 20 = 10.

How is NPS useful?

Helps in understanding the majority

Any CSM will face problems in connecting with a major part of his/her accounts. Sending them a quick NPS will help in understanding their perspective and show them you care.

Where do you stand in the industry

Get an idea about how you compare with your peers – your score might be high but that doesn’t always mean that it is good if it is on the lower end of your industry standard.

Identify ways to improve

Once you get an idea of where you stand, teams can have that as benchmark and try to improve in the upcoming surveys. The improvement could both be at a relationship level and product feature wise.

Written By - Chameli Kuduva, Founder - SaaS Insider