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TG3 SaaS/Glossary/Net promoter score
SaaS metrics glossary

Net promoter score (NPS).

The survey question every SaaS asks and few use well. Here is how net promoter score works, what good looks like and where it misleads.

Definition
Net promoter score (NPS) measures loyalty by asking how likely customers are to recommend you on a 0 to 10 scale, then subtracting the share of detractors from promoters.

NPS is a useful trend line and a dangerous single number. It tells you sentiment is moving, not why. Treat it as one input among many, not the metric you steer the whole company by.

How to calculate it

How to calculate net promoter score.

NPS = % promoters − % detractors
Promoterscustomers scoring 9 or 10
Detractorscustomers scoring 0 to 6
Passivesscoring 7 or 8, counted in the base but not the score

The score moves the conversation, the follow-up question moves the business, see customer health score.

Benchmarks

What a good net promoter score looks like.

Benchmarks vary wildly by industry, so a number that looks great in one category is mediocre in another. Your own trend over time is far more useful than a borrowed benchmark.

The real value is in the verbatim comments, not the number. A rising NPS with no idea why is luck. The follow-up question, why did you give that score, is where the insight lives.

How to improve it

How to use net promoter score well.

01

Read the comments

The number is a headline. The written reasons are the story worth acting on.

02

Track your own trend

Compare NPS to your past self, not a benchmark from a different industry.

03

Close the loop

Follow up with detractors. The recovery often matters more than the score.

04

Do not steer by it alone

NPS is one input. Pair it with usage and retention before you act.

Common questions

Questions about net promoter score.

What is net promoter score?+

A loyalty metric based on how likely customers are to recommend you, scored from minus 100 to 100.

How is net promoter score calculated?+

Subtract the percentage of detractors, who score 0 to 6, from the percentage of promoters, who score 9 or 10.

What is a good net promoter score?+

It varies hugely by industry, so your own trend over time matters more than any benchmark.

Why is NPS criticised?+

Because the single number hides the why. Used alone it misleads. The follow-up comments are where the value is.

Customer health scoreNet revenue retentionChurn rateLifecycle marketing

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