How to Measure and Interpret Net Promoter Score (NPS) in SaaS

1. What is NPS?

Net Promoter Score (NPS) is a customer experience metric that measures how likely your customers are to recommend your product or service to others. It’s typically collected through a single-question survey: “How likely are you to recommend us to a friend or colleague?” Respondents answer on a scale from 0 to 10.

2. How is NPS calculated?

Based on the responses, customers are grouped into three categories:

• Promoters (9–10): Loyal enthusiasts who refer others
• Passives (7–8): Satisfied but unenthusiastic
• Detractors (0–6): Unhappy customers who may churn

The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters:

NPS = % Promoters - % Detractors

The score ranges from -100 to +100.

3. Is NPS a reliable metric?

Why do companies use NPS?

NPS is easy to collect and understand. It’s often seen as a benchmark of customer loyalty and a quick way to track sentiment over time. SaaS companies use it to gauge whether users are happy and how likely they are to stick around—or promote the product.

But isn’t NPS a vanity metric?

It can be. A high NPS might feel good, but it doesn’t always translate into retention or expansion. For example, a customer might rate you a 10 but churn the next month due to budget cuts or feature gaps. NPS alone doesn’t reflect product usage, account health, or business outcomes.

How should NPS be used in SaaS?

NPS is most useful when it’s part of a broader Customer Health Score model. Combine it with data like product engagement, contract value, and support tickets to get a true picture of churn risk or upsell readiness. Used in isolation, NPS is noisy. Used contextually, it’s powerful.

How often should you measure NPS?

Quarterly is a common cadence for SaaS businesses, especially when tied to lifecycle moments like onboarding completion, product milestones, or renewal cycles.

FAQ

What is a good NPS score in SaaS?

Above +30 is considered good, above +50 is excellent. But it depends on your industry.

Can you predict churn from NPS?

Only partially. Low NPS may signal risk, but it's not enough alone—use behavioral and commercial data too.

Should I respond to NPS feedback?

Yes! Especially from detractors. It shows you care and can uncover actionable product feedback.

What tools can I use to run NPS?

Delighted, Hotjar, AskNicely, and in-product survey tools like Usersnap or Intercom are common choices.

Can I segment NPS by account type?

Absolutely. Segmenting by ICP, plan size, or feature usage can help you find patterns and target improvements.