Net Promoter Score can be a very useful metric for SaaS businesses. It measures user loyalty and satisfaction, and when followed over time, it helps the business understand how effectively they are meeting their customers' needs.
The way it works is simple:
For any business, a Net Promoter Score (NPS) above zero is considered to be "good," while a score above 20 is "great" and a score above 50 is "excellent."
As we mentioned above, NPS is usually a one-question survey that asks customers how likely they would be to recommend your service to someone else. It's a weighty question, because it's really asking the customer to rate how happy they are with your product and how loyal they feel toward you.
The genius of the NPS survey is its rating scale:
The bias in the scale emphasizes growing your base of enthusiastic supporters — not just people who think you're pretty good.
By following up with detractors, companies can gain valuable insights into potential areas for improvement.
This feedback loop can lead to better product features, customer service enhancements and more targeted marketing strategies.
That raises the question, then. What is a good NPS score for SaaS? In truth, the answers can vary.
In 2023, the most NPS scores in the SaaS industry were in the 40-45 range. Zoom and Netflix had two of the highest NPS scores in the category, with 72 and 67, respectively.
For B2B SaaS companies, a great NPS score typically falls between 39 and 65. The bar is quite a bit higher for B2C SaaS companies, with an average score of 54.
While there are ballpark ranges, it's hard to definitively say what a "good" NPS score is in SaaS.
This is due to a number of factors, including customer tolerance for issues.
A customer who signed up for a niche, startup SaaS might have different expectations and more patience than a customer using an established SaaS like Google Workspace or Microsoft 365.
Similarly, the margin for error is slimmer in some SaaS areas. While a video streaming customer might be inconvenienced if a movie doesn't load correctly, this isn't as disruptive as a trucking GPS customer dealing with outages mid-trip.
Lastly, NPS scores don't mean a whole lot when observed out of context. While it's impressive that Netflix recently reported an NPS score of 67, it actually might be cause for concern if the video streaming giant previously measured its NPS at 85.
That takes us to the most important point of this blog post. While it can be interesting to compare yourself against peers, the best way to use Net Promoter Score surveys is to compare against yourself.
NPS survey responses contain details on the specific aspects of your SaaS platform that customers like and dislike. This can help inform adjustments that you make to your product strategy, customer service and marketing.
And when observed over time, your NPS trend illustrates how effectively you are meeting your customers' needs over time.
NPS feedback provides actionable insights that can help shape strategies aimed at increasing customer loyalty. By noting standout features, bugs, deficiencies and commonly requested additions that align with the product roadmap, NPS feedback helps SaaS companies prioritize product improvements.
Setting up continuous customer feedback loops, based on the "build-measure-learn" process, and conducting customer interviews offers a dynamic approach to gathering feedback. This allows for the translation of NPS insights into strategies for product enhancement.
Treating NPS as an organizational KPI helps ensure that improving customer loyalty and satisfaction becomes a shared goal across departments — from product development to customer service. This aligns every team's focus and can foster a company-wide culture focused on customer-centricity.
As with any KPI, NPS is something that you shouldn't over-focus on, but instead set a routine cadence for reviewing results. This could be on a monthly, quarterly or biannual basis, depending on your business cycle.
During these reviews, assess whether the NPS goals are still in alignment with the company's objectives or if they need adjustment in response to changing market conditions or business priorities.
As we mentioned above, NPS surveys are an excellent tool for gauging customer satisfaction throughout the product lifecycle. Because of this, you can use NPS metrics throughout the customer journey to enhance the experience for them.
Regularly collecting NPS feedback is crucial, but the real value lies in the analysis. Segment the responses by promoters, passives and detractors to understand their experiences deeply.
Analyze the feedback to uncover patterns and areas needing improvement. This targeted insight allows for precise adjustments in your product or service, enhancing user satisfaction and loyalty.
Establish proactive communication with your users. This involves more than responding to inquiries and complaints; it means engaging customers regularly through newsletters, user community forums and personalized updates about product enhancements.
These communications keep your users informed and engaged, making them feel valued and more likely to recommend your product.
Utilize the feedback from your NPS surveys to inform your product development cycle. Prioritize features and fixes that directly address the pain points of detractors and the desires of promoters.
By visibly integrating user feedback into product updates, customers see their input has a direct impact, which can convert detractors to promoters and enhance overall loyalty.
Encourage and reward users who promote your product. This could be through a referral program that offers discounts or additional features for both the referrer and the new customer.
Such incentives not only foster greater loyalty among existing customers but also help in acquiring new ones who arrive with a positive impression.
Ensure your users can maximize the value of your product through regular training sessions and robust support systems. Webinars, detailed guides and a responsive support team can greatly enhance user experience and satisfaction.
Educated users are more likely to utilize your product to its full potential, leading to higher satisfaction and NPS scores.
While NPS surveys can provide helpful feedback for your product teams, they runs into the same limitation as all qualitative feedback: They can be incomplete.
That's where Archie comes in.
Archie is our AI-powered product architect, designed to help you think through the tough questions around your product and enrich the feedback you're already getting. The way it works is simple. Just give Archie a few details about your product, and it will immediately get to work giving you information about not only features and functionalities, but business and compliance requirements as well.
Let’s shift gears and explore how Archie can augment your NPS feedback. With its ability to generate detailed feature requirements, Archie supercharges the feature conceptualization phase, allowing you to break through writer's block and discover feature ideas you might not have considered.
Working in tandem with Archie’s product designer can fuel your creativity, speed up progress, aid in strategic planning and identify potential risks.
More importantly, Archie’s features facilitate the definition and exploration of ideal user profiles and product features, which are pivotal in designing your NPS surveys. Archie is free to get started.
Dealing with a lagging or flat Net Promoter Score? Using Archie, you can directly address weaknesses in your company’s NPS score through detailed analysis and ideation.
Moreover, premium Archie users can benefit from professional online sessions with 8base's product designers who provide support, insights into industry trends, best practices, and technical guidance. This collaborative approach ensures that you’re well-equipped to tackle any NPS-related challenges head-on and turn potential weaknesses into strengths.
Net Promoter Score is a straightforward way to not only measure customer satisfaction, but to also receive valuable feedback from loyal customers and unhappy customers alike. The average NPS score for SaaS companies runs the gamut, because the category is so large and diverse, so rather than using it to compare against your competitors, the best way to use NPS data is to improve your product.
We're excited about helping you achieve amazing results.
