Understanding the NPS Score: A Powerful Metric for SaaS Success

If you work in a SaaS company, you probably know how crucial it is to continuously enhance your product. You may have launched a perfect solution. But as time goes on, the client’s needs change. New technologies emerge, as well as new requirements for functionality and usability.

But how do you learn about where you stand today? Do your products and services satisfy customers? To answer these questions, you need to collect genuine feedback, preferably in a very straightforward manner.

That’s where tools like the Net Promoter Score (NPS) come into play. In this article, we’ll dwell on this metric, its importance in SaaS, and how to conduct an NPS survey right.

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I remember one project at the beginning of my career in eCommerce web development. We launched a Magento PWA and were sure of everything: from UI/UX to backend performance.

Unfortunately, we neglected one crucial thing: a simple system for gathering consumer feedback. This problem came to the surface once users started to navigate our website and faced some issues undetected during testing.

This case jolted me back to reality. When developing websites, we introduced direct channels for communicating with customers. One of them is NPS.

NPS, or net promoter score, is a means to quantify how many of your consumers would suggest your goods or services to others. It’s similar to asking, “On a scale of 0 to 10, how likely are you to tell your friends about our software?”

You may not see it, but measuring NPS can help you improve your brand image, product offering, and even search results.

Because customer reviews, mentions, and testimonials can act as strong signals for search engines. And if something is wrong, you can timely step in, fix the software, and prevent negative reports from piling up and affecting your reputation.

In our case, we needed to take Magento speed optimization steps as the website took too long to load. By doing so, we managed to enhance the user experience, which contributes to SEO too. All thanks to NPS.

You may think, why leverage NPS when there are many other ways to collect feedback, like star ratings or detailed surveys? The answer is “simplicity.” NPS asks the crucial question up front: “Would you recommend us?” Take a glance at an email from Squarespace with the NPS survey.

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Responses from the NPS survey divide the audience into three groups, depending on the given rate:

• Promoters. These are the most loyal customers who gave you 9 or 10 scores. They will or probably already have recommended your company to their friends and family.
  
  
• Passives. These are those in two minds. They rate the software 7 or 8 and may not necessarily share favorable reviews with others. On a positive note, they’re unlikely to be irritated with the product as well.
  
  
• Detractors. These users, who have given you ratings ranging from 0 to 6, are dissatisfied. They’ve encountered problems with your goods and will likely talk about their bad experiences.

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Suppose you start a PPC campaign. Simultaneously, you begin to measure the NPS score. Let’s say you see a sudden spike of Detractors and delve deeper into why it happens.

You may discover that the reason lies in the mismatch between user expectations when clicking the ad and the content they see. By eliminating this problem, you not only boost the user experience but make wise ad spending decisions.

When I was working on a Magento PWA development project, customer feedback—especially from Detractors—helped us identify significant UX problems. As a result, our team redesigned some elements, improving the app’s usability.
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To determine your NPS, you need to send the question mentioned above and wait for responses. Then, categorize respondents into three groups discussed in the previous section. The next step is to calculate the percentage of people in each group.

Take the proportion of Promoters and subtract the proportion of Detractors:

NPS =% of Promoters –% of Detractors

You can get a number ranging from -100 to 100. To get a better understanding of your customers, ask follow-up questions, for example:

“Thank you very much for your reply. What can we do to make your experience better?”
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It can be challenging to settle on one figure as a SaaS NPS benchmark. Why?

The reason is that SaaS companies serve a wide range of industries, from eCommerce and banking to education and government bodies. Each sector will require different functions and rate the provided capabilities according to how they meet their goals.

Bain & Company (the creators of NPS) state that a good NPS ranges between 50 and 70. Anything above 70 is considered exceptional. But these figures depend on the industry. Even anything above 0 can be regarded as acceptable, which means you have more Promoters than Detractors.

If you got a negative figure, it’s a problem. It means more people are dissatisfied with your product, either because you focus on the wrong audience or it’s time to update the software.
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As simple as it may seem, running an NPS survey isn’t just about sending a question via email or displaying it in the app and waiting for the answers. You need to consider several factors to get the most out of your NPS survey, including:

1. Avoid overcomplicating. Let users answer the question without much thinking.
2. Ask why they gave that score. Include an open-ended question and the ability to type in the review.
3. Place a survey in an accessible location—maybe after a support chat, post-purchase, or even within your app or platform.
4. Choose the right timing. For example, you should ask activated users who have a certain experience using your software. It’s also easy to ignore a survey late at night. Give people time to get accustomed to a new product or update and trigger a survey at a reasonable frequency.
5. Don’t make the survey take too long to respond. You can also indicate the number of minutes needed to rate the product.
6. Use feedback to improve the product and business operations. Show your customers that their feedback is valuable and that you act on their suggestions.
7. Employ dedicated tools for tracking the NPS. Some of the most popular ones are Userpilot, Hotjar, Nicereply, and SatisMeter. They help you segment the audience, analyze the sentiment behind their reviews, and automate the process.

For instance, you can see a screenshot of the Hotjar interface below. The software lets you create an NPS survey from a template, use an AI generator, or design it from scratch.

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In the SaaS industry, customer satisfaction goes beyond the product quality itself. It may include other factors, from onboarding to customer support and ongoing engagement. Let’s take a look at some examples.

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A product’s basic functionality is unquestionably necessary, but what sets you apart from rivals is frequently its additional features.

Suppose you have an app. Some people may find it less appealing than others if it lacks a live chat feature. With the introduction of some parts to your app, the NPS may rise.

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Another crucial aspect of customer satisfaction is customer support. The product may be of high quality. But there are issues requiring instant intervention from your team. If something goes south, a client expects quick and efficient solutions, which leads to better NPS scores and loyalty.

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The product may be packed with helpful features. But can users access them in a convenient and intuitive way? Your UI/UX design should guide people from one page to another, allowing them to cover all the purchased capabilities. No wonder it will contribute to higher NPS metrics. 

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Customers want to receive fair value for their money. So you should benchmark your pricing against competitors and ensure users get what they pay for. To improve your NPS, you may need to optimize your pricing models, include more packages, or provide a custom plan.

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Another way to show clients you value them is to seamlessly introduce them to your software. Onboarding may come in various forms:

• a welcome email;
• educational content;
• a meeting with your specialists.

This way, you set the tone for further interactions and boost the chances of getting positive feedback. The need for enhancing the onboarding process is among the top customer success trends nowadays.

A case in point is Captions. This AI scriptwriter delivers an email once the free trial period starts. The company states that it wants you to harness the tool's full potential, thus enumerating all the features accessible during the trial period.

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How do you tell users about your news, updates, or problems? If you adhere to open and proactive communication, you can count on a favorable impact on NPS ratings. It also promotes trust and loyalty.

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An NPS is a crucial indicator of whether you are moving in the right direction. Collecting feedback and fixing business problems improves your customer relationship, builds loyalty, and paves the way for long-term success.

However, you can’t just set this tool and leave it as it is. User requirements change, and so can the number in this metric. What seemed shining in the past may turn out unimpressive now.

That’s why you should get back to NPS surveys to get the latest insights into your business performance and be open to making adjustments in response to this feedback. So, any SaaS company, big or small, embark on this journey and let the NPS be your compass.

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