Most successful businesses have one thing in common, which is, a bunch of loyal customers. And when it comes to SaaS business, the importance of Customer Loyalty even increases as loyal product users attract more users to your business and dissatisfied customers can even shoo away your potential customers by sharing their lousy experiences.

But how would you identify your loyal customers? You should have the right information before considering any customer as loyal or disloyal. Here comes the need of a powerful metric like Net Promoter Score that can help you to gauge Customer Loyalty.

NPS® is not only a useful and widely accepted metric to measure Customer Loyalty, but it also acts as a key indicator to measure the performance of your SaaS product and customer success teams. It is a great way to collect SaaS Feedback about your product and know how much loyalty your products and services are able to generate for your business.

In this article, we will explore what Net Promoter Score is, why it is important for your business and how you can measure it for your SaaS product. Let’s get started!

What is Net Promoter Score?

NPS® or Net Promoter Score is the most effective and widely accepted Customer Success Metric that businesses use to collect Customer Feedback in SaaS and measure Customer Loyalty. It provides insights into how your customers perceive their experiences with your products and services and how likely they found your product worth recommending to their friends and known ones.

An NPS Survey is a short survey containing a couple of questions. The first question asks for a rating from 0 to 10 from the customers, and the next asks the reason for that rating. The main question of the survey which is also known as Ultimate Question is:

How likely are you to recommend our product to your friends and colleagues?

A rating scale of 0 to 10 is provided to the customers where 10 means ‘Most Likely’ and 0 means ‘Not at all Likely’ to recommend.

On the basis of their experiences, customers choose a score from 0 to 10 to rate their experience with your product.

Based on their ratings, customers are divided into three categories, viz., Promoters, Passives, and Detractors.

Promoters are the customers who give a rating of 9 or 10. They are considered as the most satisfied and loyal customers who are most likely to continue using your product and recommend your product to their friends and known ones.

Passives are those who give a rating of 6 or 7. They are usually satisfied customers but not truly happy or delighted with your product. They are likely to switch to other products if they are offered a better deal.

Detractors are those who give a rating of 0 to 6 and are considered the most dissatisfied customers. They are not only most likely to churn but are also likely to spread bad word of mouth for your product in the market and prevent new customers from investing in your product.

How to Calculate NPS®?

To find the Net Promoter Score, you need to first calculate the percentage of Promoters and Detractors with the simple formula below.

% Promoters = No. of Promoters/Total Respondents x 100

% Detractors = No. of Detractors/Total Respondents x 100

For calculating the Net Promoters Score, you need to subtract the percentage of Detractors from that of Promoters. 

Net Promoter Score = %Promoters - %Detractors

Net Promoter Score can lie from -100 to 100. More the Net Promoter Score, the better it is. Let’s explore some reasons to measure Net Promoter Score for your product.

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Why should you Measure NPS® for your SaaS Product?

Net Promoter Score is not only a metric to measure Customer Loyalty but also a rating to track and showcase the performance of your product in the market. Let’s understand this better why we should measure Net Promoter Score by exploring some benefits of Net Promoter Score for SaaS.

Let’s learn more about these benefits of measuring NPS in SaaS.

1. It is simple and easy to use

Net Promoter Score is simple and very easy to use to measure Customer Loyalty. As NPS Survey is a very short couple-question survey. It is easy for you to create it, as well as easy for your customers to respond. If you use a tough and lengthy survey instead, there is a high chance of getting less responses from your customers.

2. It can boost Customer Loyalty and growth

With NPS, you can not only measure Customer Loyalty but can also increase it by taking the right action on the NPS Survey responses. Responses to an NPS survey helps you know about customers’ loyalty, and thus you can make efforts in the right direction to improve it and grow your business.

3. It helps you identify your strengths and weaknesses

By analyzing the responses to an NPS Survey, you get to know about the strengths and weaknesses of your product. When customers rate your product and share the reason for their rating, you get to know what most product users liked or disliked about your product. This helps you work in the right direction to eliminate the weak points and develop the strengths of your product. 

4. It helps you segment your customers

NPS is a great CX metric that helps you segment your customers on the basis of their responses to your NPS Survey in the categories of Promoters, Detractors, and Passives. On the basis of this segmentation, you can do effective targeting of your customers and take the right decisions and actions to develop great products and better experiences. 

5. It helps to predict and prevent churn

When it comes to anticipating customer churn, NPS is effective as it tells you about your Detractors. Detractors are the most dissatisfied customers and have a high chance of churning. When you identify them with the help of NPS survey responses, you can take instant action to resolve their issues which ultimately helps to improve SaaS Customer Experience and prevent churn.

Let’s learn some cool tips to make the best use of Net Promoter Score for our business.

1. Look for NPS Benchmarks

Look for NPS Benchmarks for your industry. But do not solely rely on those benchmarks and judge your product. Also consider the previous NPS of your product or company, and the trends and changes in that score over time. Focus on continuous improvement of your product and ensure your NPS is improving each time.

2. Use NPS to segment your Customers

NPS Survey results are a great way to segment your customers and take action accordingly. Use NPS survey results to identify your happy, neutral, and unhappy customers and work on the direction of shifting all of them to the category of promoters customers. Make enough efforts to satisfy the dissatisfied customers, but do not forget your happy customers also. They are the ones that can be your most loyal customers and can bring in more business. So take proper action to reward their loyalty also so that their loyalty further increases.

3. Use In-Product Surveys

Your customers are thinking about your product and their experiences with it the most when they are using it at the moment. So what can be better than in-product surveys to collect SaaS Feedback through NPS Surveys! Using In-product surveys will help you get more responses and with better accuracy. 

4. Measure NPS at the right time

Send your NPS Surveys at the right time. When you want to gauge User Experience with a particular feature or aspect, use Transactional NPS Surveys that are triggered based on the user actions and transactions. When you want to analyze NPS trends and track improvement in the NPS of your product, use Relationship surveys that are sent regularly in the form of monthly, quarterly, or annual surveys.

5. Take Action on NPS Survey Results

Conducting NPS Surveys and not doing anything on the responses is the same as not using NPS surveys at all. So always take the required actions on your NPS Survey results.

• Leverage Promoters to market your product - When you have identified your promoters, use this information to market your product. Remember that Promoters are the ones who agreed to recommend your product to others, so why not request them to do so? Request them to share their feedback on popular review platforms like G2, GetApp, and Capterra. You can also share links with them that redirect them to the exact web page in a single click where they can share their reviews and ratings of your product quickly and easily.
• Seek Suggestions from Passives - Ask the Passives what you can improve about your product and seek their suggestions. Of course all suggestions can’t be worthy, but you can definitely get some useful suggestions that you can actually implement to improve your product. Thank Passives for their suggestions and when you follow any of such suggestions, personally contact the customers who shared those suggestions. Thank them and tell them that you are following their suggestions and making respective changes to your product. This will boost tier loyalty and can convert them into Promoters.
• Follow up with Detractors and make improvements - Follow up with detractors, apologize to them for their bad experiences and ask them what didn’t work for them and where things went wrong. Make every effort you can to resolve their issues and improve their experiences, and tell them what you are doing for them. When they recognize your efforts, it will change their perceptions and they can even turn into promoters in the near future.

So take proper actions and close the SaaS feedback loop effectively to utilize all the hard work you have done of conducting NPS Surveys to collect SaaS Feedback.

Using Zonka Feedback to Measure Net Promoter Score

To measure the Net Promoter Score of your product or business, use an effective SaaS Feedback Software like Zonka Feedback. Zonka Feedback helps you create and send powerful NPS Surveys to collect feedback and identify your promoters, detractors, and passives.

After receiving NPS Responses, you can use its NPS Calculator that helps you easily measure your Net Promoter Score without any manual calculations. With its advanced features like real-time feedback alerts, you can get notified in real-time about your survey responses and detractors by setting the criteria of the alerts by yourself. You can take instant action on this information to improve Customer Experiences and prevent churn.

With its advanced NPS Dashboard and reporting capabilities, you get various reports like Snapshot Report, Trends report, Locational Analysis report, and more with which you can also track your company’s performance and the NPS trends to ensure that it’s improving for your product.

The NPS tool also provides a free trial. You can try Zonka Feedback for free for 7 days and see how it works for your business.