Understanding NPS
Net Promoter Score (NPS) is synonymous with Customer Success. Understanding your business NPS is critical for planning, adapting and growing. First framed by Fred Reichheld in a Havard Business Review in 2003, the NPS is now a critical part of every SaaS platform who truly value their customers and ultimately, their survival.
At it’s core, NPS is a super simple metric used to understand customer satisfaction. NPS is achieved by asking customers how likely they are to refer your product / solution on a scale of 0-10 to friends, family or colleagues.
Scoring
Net Promoter Score = % Promotors - %Detractors
| Score | Result |
|---|---|
| 0 | Detractor |
| 1 | Detractor |
| 2 | Detractor |
| 3 | Detractor |
| 4 | Detractor |
| 5 | Detractor |
| 6 | Detractor |
| 7 | Neutral |
| 8 | Neutral |
| 9 | Promotor |
| 10 | Promotor |
Why it works
It’s simplicity. It’s a super easy metric to collect which correlates strongly to the potential growth of the business. Over the years, many have written about the pros and cons of NPS, but ultimately, no better metric exists at present as an indication to health.
What’s the ideal NPS score?
As with most things, there’s not one size that suits all. An NPS score should simply be positive and heading in one direction, up!
The balance of scale isn’t exactly your best friend when it comes to NPS. With 70% being reserved for detractors and only 20% for promotors, it’s inevitably going to be an uphill battle to increase NPS.
The main aim with NPS is to get a benchmark, and then pull whatever levers possible to improve it over time.
If you're having difficulty calculating your NPS. There is a fantastic, free to use calculator available on delighted.com which you can access here