Net Promoter Score (NPS) is a customer satisfaction metric that measures the likelihood of customers recommending a company to their friends or colleagues. NPS is calculated based on a single question: “On a scale of 0 to 10, how likely are you to recommend [company name] to a friend or colleague?” Based on their response, customers are categorized into three groups:
- Promoters (score 9-10): These customers are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8): These customers are satisfied but unenthusiastic and vulnerable to competitive offerings.
- Detractors (score 0-6): These customers are unhappy and can damage the brand through negative word-of-mouth.
The NPS score is calculated by subtracting the percentage of detractors from the percentage of promoters. NPS scores can range from -100 (if every customer is a detractor) to +100 (if every customer is a promoter).
A good NPS score for SaaS (Software as a Service) depends on several factors such as industry, company size, customer base, and target market. However, in general, a positive NPS score of 30 or higher is considered good for a SaaS company.
A score of 30 or higher indicates that a significant percentage of customers are promoters, which is a good sign for the company’s growth prospects. However, it’s important to note that NPS is just one measure of customer satisfaction, and companies should use it in conjunction with other metrics like customer retention, churn rate, and customer lifetime value.
Additionally, NPS scores should be compared to industry benchmarks to get a better sense of how a company is performing relative to its competitors. For example, according to a 2020 report by Delighted, the average NPS score for SaaS companies is 31, with scores ranging from -41 to 78. Therefore, a score of 30 or higher would put a SaaS company in line with the industry average.
In conclusion, a good NPS score for SaaS depends on various factors, but a score of 30 or higher is generally considered positive. However, companies should not rely solely on NPS to measure customer satisfaction and should use it in conjunction with other metrics to get a comprehensive view of their performance.