Net Promoter Score (NPS) is a customer loyalty metric based on one simple question: "How likely are you to recommend [product/company] to a friend or colleague?" Responses are rated 0-10, and the score indicates overall customer satisfaction and loyalty.

How NPS Works

The question: "On a scale of 0-10, how likely are you to recommend us to a friend or colleague?"

The categories:

• Promoters (9-10): Loyal enthusiasts who will keep buying and refer others
• Passives (7-8): Satisfied but unenthusiastic customers vulnerable to competitive offerings
• Detractors (0-6): Unhappy customers who can damage brand through negative word-of-mouth

The calculation: NPS = % Promoters - % Detractors

(Passives count toward the total number of respondents but don't directly affect score)

Example:

• 100 responses
• 60 Promoters (60%)
• 20 Passives (20%)
• 20 Detractors (20%)
• NPS = 60% - 20% = 40

NPS Ranges

Score interpretation:

• -100 to 0: Needs improvement (more detractors than promoters)
• 0 to 30: Good (positive but room for improvement)
• 30 to 70: Great (strong customer loyalty)
• 70 to 100: Excellent (world-class, rare to achieve)

SaaS industry benchmarks:

• Consumer SaaS: 30-40
• B2B SaaS: 30-50
• Top performers: 50-70

Why NPS Matters

Predicts growth: High NPS correlates with organic growth through referrals and word-of-mouth.

Measures loyalty: Goes beyond satisfaction to intent to recommend (stronger signal).

Simple to track: One question, easy to administer, standardized measurement.

Industry benchmark: Can compare to competitors and industry standards.

Actionable: Follow-up question ("Why?") provides qualitative insights.

The Follow-Up Question

The real value comes from the "Why?" follow-up:

"What's the primary reason for your score?"

Promoters tell you: What's working well, why they love you, what makes you recommendable

Detractors tell you: What's broken, what's missing, why they're unhappy

This qualitative feedback is more actionable than the score itself.

When to Measure NPS

Relationship NPS: Sent periodically (quarterly or biannually) to entire customer base. Measures overall brand health.

Transactional NPS: Sent after specific interactions (after purchase, after support ticket, after onboarding). Measures specific touchpoint effectiveness.

Most companies start with relationship NPS, add transactional later as they scale.

NPS Limitations and Criticisms

Cultural bias: Different cultures score differently. Japanese respondents are harsher than Americans. Makes international comparisons difficult.

Response bias: Happiest and unhappiest customers respond. Middle of the road customers don't bother.

One-dimensional: Reduces complex customer sentiment to single number. Misses nuance.

Gaming potential: Teams might optimize for score rather than actual customer success.

Passive blind spot: Passives don't affect score but represent large, potentially at-risk segment.

No context on importance: A detractor who barely uses your product vs. a detractor who's a power user are very different.

Better Approaches to NPS

Segment by customer type: Measure NPS separately for different customer segments (enterprise vs. SMB, by industry, by plan type).

Track trends over time: Single NPS snapshot is less valuable than trend line. Improving or declining?

Combine with other metrics: NPS + churn + usage + support tickets gives fuller picture.

Act on feedback: The score matters less than what you do with qualitative responses.

Response rate matters: 50% response rate with NPS of 40 is more meaningful than 5% response rate with NPS of 60.

NPS and Product Feedback

NPS surveys are feedback opportunities:

Promoters: Ask what they love and what would make them love you more. These insights often reveal your key differentiators.

Passives: Ask what would move them to "promoter" status. Often reveals features or improvements that matter.

Detractors: Ask what's broken and what would change their mind. Critical feedback you need to hear.

Many companies use NPS responses to identify customers for deeper interviews or user research.

Improving NPS

Fix detractor issues: Analyze common themes in detractor feedback and address systematically.

Double down on promoter drivers: Understand what makes promoters love you and do more of it.

Convert passives: Identify what's holding them back from enthusiastic recommendation.

Close the loop: Respond to detractors personally. Shows you care and sometimes converts them.

Track cohorts: Monitor NPS for customers onboarded at different times. Improvements should show in newer cohorts.

NPS vs. Other Metrics

CSAT (Customer Satisfaction): Measures satisfaction with specific interaction. More tactical than NPS.

CES (Customer Effort Score): Measures how easy it was to accomplish something. More operational than NPS.

Churn rate: Measures actual behavior (leaving). More concrete than NPS intent.

Product usage: Measures engagement. More behavioral than attitudinal.

Use NPS as one signal among many, not the only metric that matters.