What is a Good NPS Score?

Once you’ve sent out your net promoter survey and calculated your score, the question remains:

What do you actually do with it?

Whether you’re a long-time customer expert or an up-and-coming customer success specialist, your NPS score can be a powerful tool … or another data point lost along the way.

How your team uses it over time will be key to unlocking its revenue-driving benefits. Just remember: Your score is just the tip of the iceberg.

What is the average NPS score for SaaS companies?

OK, let’s get this part out of the way first: What score should your team actually be shooting for?

Short answer: It varies.

Now, strap in for the longer answer.

When the team at Bain & Company first created the NPS system as a way to measure customer sentiment, they provided the following framework for understanding your score:

• Above 0 is good
• Above 20 is favorable
• Above 50 is excellent
• Above 80 is world class

But, if it was that simple, you probably wouldn’t be wondering what we have to say.

As a benchmarking tool, NPS scores vary by industry. According to a recent survey by the Temkin Group, auto dealers on average register a 48 and enjoy the highest average of any industry. The industry with the lowest average NPS score? TV service providers at 11. 

Here are some others:

By nature, consumers are more likely to promote their favorite retail brands compared to a service provider such as your utilities company. Unless you’re just really excited about your monthly electric bill — no judgement here.

As a customer success specialist in the SaaS world, you should be coming in at or above the industry average of 30, as reported by the data aggregator Statista.

Always remember: You’re not only benchmarking against your direct competitors — you’ll also want to look inward. By measuring customer satisfaction and sentiment over time, you’ll be able to tell whether your strategy is meeting customers’ needs as well as where you may be missing the mark.

If you don’t know your score, calculating it will be your first step on the road to stronger retention.

Calculating your net promoter score

All you have to do to find your score is take the difference of the percentage of promoters within your customer base and the percentage of detractors:

Seriously — it’s that easy.

You’ll find these variables by creating a questionnaire asking how likely it is that your customers would recommend your brand to their peers.  

These surveys can be as complex or straightforward as you’d like, but generally best NPS practices dictate that you ask this question on a zero-to-10 scale, dividing your customer base into three: promoters, passives and detractors. Each category is named fairly intuitively, with promoters being those who would promote your brand and detractors being those who wouldn’t — total surprise, right?

Pro tip: NPS itself is not expressed as a percentage, but instead as an absolute number between -100 and +100. So, if 60% of your customers were promoters and 10% were detractors, your NPS rating would be 50, which is more than solid compared to the average score in the SaaS industry.

If you’re following along with that math at home, you’ve probably already come to our next question: What about that missing 40%?

Meet the passives: These are the fence sitters who enjoy using your product, but aren't necessarily running down the streets to sing their praises. While they aren’t factored into your NPS formula, this group of customers is still a valuable stakeholder when it comes to your customer success strategy.

With the right game plan, you can convert your passives into your newest group of up-and-coming promoters. However, making the wrong move may just send them tumbling back to the land of the detractors.

What NPS feedback reveals

You have your score in hand … Now what?

If you’re falling short or are looking to score even higher like the CS superstar we know you are, you’ve come to the right place.

Once you’ve calculated your score, your next step is understanding what it actually means for your users as well as your customer success team.

The results you’ve collected from your survey are a valuable descriptive metric that gives meaning to historic customer data. If your score is trending upward, a change you’ve recently made is for the better — the same can be said if you’re noticing a downward spiral. Generally, if you’re hovering near that mark of 30, you've successfully met customers' post-purchase expectations. If you’re below that or far in the negatives, it’s time for a strategic evaluation.

Using these scores, you can start identifying past trends and patterns across user segments.

There’s one operative phrase there, however: Past trends.

Although NPS data can be helpful when it comes to seeing the big picture, it can be hard to get down into the granular details and find what matters most to customers. If the customer experience could be boiled down to a single question, our day would probably be a lot shorter.

Instead of falling victim to tunnel vision, we recommend tracking the following predictive behaviors in addition to your NPS score:

• Time to first value: How long does it take a new customer to realize value from your product?

• Usage frequency: How often is a customer logging in? Which features are they using the most?
• Engagement: Is a customer interacting with in-app notifications, email campaigns or other forms of communication from your team?
• Open tickets: Is your product team flooded with help requests? It could be a sign of a bad product or poor response time.

With these account-level details in one hand and your NPS score in the other, your customer success team will have everything you need to start making a change for the better.

How to improve customer sentiment

Once you begin to see the patterns across your promoters, passives and detractors, it’s time to get to work. We recommend going at it with a segmented approach that speaks to the individual needs of each of your customer groups:

Promoters

It's fairly common to mistakenly assume that your promoters can be left alone. However, they represent your most valuable brand asset.

Turn your promoters into brand advocates by giving them opportunities to share their experience with your company through platforms such as:

• Case studies
• Referrals
• Testimonials

Word-of-mouth marketing can be a powerful way to provide prospective customers with evidence of your proven wins. Just remember not to rely solely on your promoters — overloading them with case study interviews and referral requests is a fast track toward the detractor route.

Passives

Although they aren't factored into your NPS score, passives represent a major opportunity. There’s still plenty of time to provide these customers with that all-important “wow” moment.

Stay on the lookout for new ways to offer value and maximize their relationship with your company:

• Ask for customer feedback: Whether it's one-on-one during a monthly call or in an in-app survey, actively working to uncover your passives' needs is an easy way to understand how you can better support them.
• Monitor product usage: If a passive is starting to use your product less and less, there could be several factors at play. Look into any recent help tickets to see if they’ve run into a problem or if login frequency has been trending downward. Or, maybe they’ve outgrown the original feature they onboarded with and are looking to get more out of your product.
• Go back to the beginning: During the sales-to-CS handoff, what long-term goals did your client outline? How have they progressed toward them since? Circling back to their original goal will help you create a success strategy more directly aligned with their company’s unique needs.

“Passing over” your passives can be a costly mistake. Unlike your detractors, they still haven’t made up their mind — meaning you can still prevent churn before it even pops up as a consideration.

Detractors

Working with detractors on a one-to-one level will be key to identifying exactly what’s causing the issue. Approaching someone who’s already frustrated with a cookie-cutter solution is a surefire way to say goodbye to the account.

There’s a very important point that a lot of experts stress when it comes to reaching out to dissatisfied customers: Keep it friendly and come well informed.

It can’t seem like your team is reaching out solely to change their mind or are just going through the motions. Here’s how Debra Squyres, VP of Customer Success at Beamery, puts it:

“It’s a good rule of thumb in any client interaction to come to the party knowing everything you can about their experience. Not only reading through their survey response, but also understanding things like what modules they use, having background on their overall experience, anything you can use to help you learn about the client in advance … Spend the time engaging with them on an action plan to get them to a better place rather than asking questions.”

While your exact strategy should cater to your unique customers, going at it segment-by-segment will allow your team to scale your approach as your organization continues to grow.

Leveraging NPS results for revenue growth: Why it pays to study

To see how NPS results can be used to enhance the user experience, we’re going to have to go back to school for a second here. Reader, meet Magoosh.

Magoosh, an online test prep company for the GRE, GMAT, TOEFL and SAT exams, considers NPS to be among the most important metrics they track. So, in 2015, when the team noticed a major dip in the NPS results linked to their GMAT studying tools, the alarms were sounded.

Something was seriously wrong.

The customer success team at Magoosh quickly found that students were getting lower scores than their systems’ algorithm predicted, creating an entirely new challenge. Which was worse for customer satisfaction — a lower predicted score while studying, or a disappointing final score after the exam?

If Magoosh made a total overhaul of the system, it wouldn't be clear as to whether it would benefit users — or the company's NPS results —  until testing was conducted months later. So, instead of pushing their NPS survey after the GMAT like they would traditionally, they brought their questionnaire inside the studying tool.

Not only did this approach allow Magoosh to measure the changes to the scoring algorithm, but students were able to flag any issues they had in real time.

All in all? Test takers began scoring a full nine points higher, and the brand’s word-of-mouth marketing skyrocketed.

The moral here is clear: Happy users make for a happy company.

Getting started with NPS surveys

When used alongside other predictive indicators of customer behaviors, your NPS survey can be a powerful tool that provides clear insight into the end-to-end user journey. And, by measuring your score over time, you’ll be able to build a post-purchase experience that drives value for your customers and your bottom line.

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