Net Promoter Score® (NPS)
Net Promoter Score® (NPS)* has become a defining benchmark metric for most companies. It offers a simple way to track customer sentiment, satisfaction and loyalty. Below we outline how to calculate it, track results, and apply findings across your organization.
What is a Net Promoter Score?
Net Promoter Score® (NPS) is a customer satisfaction benchmark that measures how likely your customers are to recommend your business. It’s calculated through a survey to customers with the following question: How likely are you to recommend us to a friend or colleague?
The answers are scored on a scale from 0 to 10, which is divided into three groups:
- Promoters (Customers who scored 9 or 10)
- These are loyal enthusiasts who are likely to keep renewing and refer your product/services to others
- Encourage respondents to share their story on review sites (and tailor thank you gifts accordingly
- Passives (Customers who scored 7 or 8)
- These are satisfied but unenthusiastic customers who can be particularly vulnerable to competitive offerings
- Work with these respondents to further identify their exceptions or “buts” (e.g., product features, current engagement)
- Detractors (Customers who scored 0 to 6)
- These are unhappy customers who are at risk for churning and have the potential to do damage to your brand through negative word-of-mouth
- It’s critical to respond directly and in a timely manner to these respondents (and preferably with a multi-touch approach to ensure follow-through)
How to calculate your NPS score
Once you’ve collected customer responses (which are valuable on an individual level), an NPS score is simple to calculate and straightforward for your company to assess overall customer sentiment.
Take your total responses from a given time period and calculate the percentage of promoters, passives, and detractors within that total. Then subtract the percent of detractors from promoters (the passives will not factor into your final calculation).
Example: You have 57% Promoters, 23% Passives, and 20% Detractors (57% – 20% = NPS of 37)
Get tips on when to survey customers, follow-up survey actions, and NPS best practices in our NPS cheat sheet.
What is a good NPS score?
Your NPS will fall inside a range of -100 to +100. A positive score is generally a win, as this means you have more promoters than detractors. But overall, a good score depends on industry, company size, and business maturity. The most important thing is to benchmark against yourself to make sure you improve (access to industry or competitor scores also helps for general context).
A few scoring benchmarks to keep in mind:
- Any score above zero means you have more promoters than detractors—a majority of promoters is the goal.
- Based on global NPS standards, any score above zero is considered “good.”
- A score above 50 is excellent, and anything 70+ is “world class.”
Learn more about taking NPS results and building benchmarks for company growth:
When and how to send NPS surveys
Your company should send NPS surveys on a regular or periodic basis to keep a pulse check on customers over their lifetime and across their experiences with your products, services, and staff. In addition to routine survey sends, consider event-focused or transactional surveys for when a customer interacts with your company on a more individual level (e.g., new product purchase).
Keep the following checklists in mind for all your NPS surveys.
Routine NPS surveys
- Measure regularly (monthly/quarterly/annually) as opinions and products change over time.
- Don’t send too early in the customer lifecycle—give customers time to experience the product or service.
- Ask a pivotal follow-up question, such as “What was the most important reason for your answer/score?” The comment box helps you get at the core of customer feedback. Issues aren’t always directly related to your products, and giving them a broad question helps to keep feedback broad and flexible.
- Don’t only batch and blast—send based on behavioral triggers to ensure a uniform comparison across journey phases and customer events.
- Alternatively, don’t be afraid to include infrequent users and even non-users (think: decision makers at your customer’s company) which can provide a well-rounded view of sentiment that can be segmented later.
Behavioral/transactional NPS surveys
Consider the following opportunities based on customer activity:
- Before/after a subscription renewal
- End of a free trial
- After customer onboarding or training
- After X interactions with Customer Success
- After a new product launch
- After a closed support ticket
The benefits of tracking NPS results
The Net Promoter Score offers an insightful layer when considering customer churn data and strategy. NPS can indicate both customer loyalty (a direct vote of confidence) and potential business growth (public endorsement). Depending on the level of feedback, it can also offer details on customer dissatisfaction, product issues, and competitor advantages. If deployed and tracked regularly, it’s a trove of trending data on customer lifetime value and satisfaction over time.
Benefits of tracking and operationalizing NPS:
- Easy to deploy and benchmark
- Clear method for closing the feedback loop
- Direct measure for customer loyalty or improvements
- Support for referral marketing program
- Additional step in churn strategy (supporting detractors)
However, NPS should not be a primary or “be all end all” metric for Customer Success teams – it’s simply one piece of the metrics puzzle to inform a larger customer and business strategy. If it’s tied to compensation, it should be companywide, since NPS results connect back to many facets of the business (sales, product, marketing, finance, etc.).
Dig more into how NPS can push your whole business forward:
- Complete guide to NPS: the ultimate question
- Where do you stand? 5 hot topics of debate in Customer Success
Additional resources on NPS and SaaS metrics
- Net Promoter Score cheat sheet
- Coach the Coach: Net Promoter Score (NPS) Calls
- The crucial nuance behind seven top Customer Success metrics for SaaS companies
- SaaS retention benchmarks: How does your company compare?
*Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.