SaaS NPS (Net Promoter Score) Guide: Running a Health Check on Your SaaS Business
Not all SaaS metrics are reflected in dollars. NPS is one of them. Your final result is a score, not an amount. And the higher the score, the better job your team has done and the more cash you can anticipate.
Without any further ado, let’s get to the bottom of SaaS NPS:
1) discover what it is,
2) how you can calculate it,
3) why you have to know your NPS,
4) what free tools are available to measure that score,
5) and how to grow your NPS.
What is NPS for SaaS companies?
NPS is a customer experience metric that shows how satisfied your customers are from your services and how likely they are to recommend your company to other people. As you can see, you get feedback on two different questions which are closely interrelated to each other.
A person who is ready to recommend your company to another person must have had a positive experience with you (that seems quite logical).
Our guide aims at revealing Net Promoter Score benchmarks so you have happier customers and your customers have better service providers!
How to calculate your SaaS NPS? It’s simple
The main question is the same for all types of industries. You ask your customers: On a scale from 0-10, where 10 is absolute yes and 0 is absolute no, how likely are you to recommend our company to your friends and colleagues?
After you have the answers, here’s what you do.
First, you classify the respondents into 3 categories: Detractors, Passives, and Promoters.
If a customer chooses a number between 0 and 6, he/she has experienced low-quality services or is disappointed with you. If a customer chooses 7 or 8, he/she is neither happy nor unhappy. Maybe they will not spread negative information about your company or services but they will not actively promote you either.
And if a customer chooses 9 or 10, he/she definitely likes your company and services, you have managed to meet his/her criteria and he/she will be ready to recommend you to others.
So how to calculate NPS?
Your Net Promoter Score formula: Percentage of promoters – Percentage of detractors = your SaaS NPS.
Let’s assume you received 100 responses to your survey:
12 respondents were Detractors (12%)
28 respondents were Passives (28%)
60 respondents were Promoters (60%
Subtract 12% from 60% which equals 48%. Your NPS is 48, not 48% as this metric is an integer, not percentage.
Your NPS for SaaS can be a number from -100 to 100 depending on the provided results: the higher the score, the less work you have to do.
Now you might be interested in what’s the average for SaaS? Generally, if your NPS is above 0, it’s considered “good”. If it’s above 50, the quality of your services is “excellent”. And if above “70”, you are doing really, really great!
The score is necessary but only that is not enough. That’s why including a follow-up question will provide the actual foundation for your future activities.
A follow-up question maybe something like “Why did you choose that score?” and let the customer clarify his/her answer with a few words.
That will allow him/her to formulate their experience in their own sentences and provide a complete answer. After all, your biggest goal is to reveal the factors that cause a good or bad reaction.
4 reasons why you should care about your SaaS NPS
#1 You will find what circumstances or failures cause a negative reaction and take measures to destroy them (stop/review activities that create detractors).
#2 You will discover what features or approaches help your customers feel happy and satisfied and do your best to show the same attitude again (repeat activities that create promoters).
#3 You will be able to figure out how to make your company a better destination for your customers-yet-to-come.
#4 You will have the opportunity to reach out to the discontent customers as soon as possible and solve their problems to change their negative opinion about your company.
How to increase your customer survey response rate?
Attracting more and more customers to answer these short questions is also a key element. Maybe you will send the survey to 150 customers but only 30-35 will respond to you. To ensure a higher response rate, follow these simple but important tips.
#1 Pay attention to your email subject line
ARPU may mislead you if you don’t track it in the context of your MRR or ARR which again changes. So calculating this metric requires calculating another metric too to stay up-to-date and precise. You put almost double efforts in revealing one single metric.
That’s why avoid general subject lines like “Feedback survey” and instead write something similar to “How was your customer experience? Tell us in 2 minutes”. That personalization will increase customer engagement.
#2 Create a conversational message
High-paying customers may result in a positive ARPU, while your metric may be growing only due to a small number of customers paying extremely high. In reality, only those few customers may be “maintaining” your business. But what about diversifying revenue flow?
The content inside your email should also be written carefully. You can write something like “Dear customer, we want to conduct a short survey to find out how we can improve our services and make you happier. Please answer these 2 questions regarding your experience with our company.”
Don’t forget to insert a clear CTA with a link to the survey page. Minor errors can confuse your customers and hold them back from satisfying your request.
#3 Don’t ask many questions
You already know the main two questions that are worth asking: “How likely are you to recommend our company to your friends and colleagues?” and “What’s the reason for your answer?”. You may want to include more questions like “What needs to be improved?” which is again Ok and can give you more insights. We are sure you will be concise and clear and won’t include questions that will not impact your decisions.
#4 Tell about it in advance
Sending an email to your customers with a great subject line and authentic message will greatly increase your response rate. Another approach is not just to send that email but tell your customers about your upcoming request in advance.
For example, if you have a phone conversation or a video call with him/her, you can tell at the end “Hey, thank you for the call. We are going to send a short survey to you regarding your experience with our company. Hope you’d like to take part in it and share your comments”.
These 4 approaches will help you get more and more valuable responses that in turn will bring more accurate data about what actually needs to be improved.
FREE online tools you can use to ask your customers for feedback
Your questions are ready, it’s time to insert them into an online tool. You will have all your data in one place and it will become easier for you to analyze reports.
1. Google Forms
Once you have a Google account, you can choose Forms from Google apps and add your question. Google Forms doesn’t restrict you with the number of answers you can collect. So it’s the old, classical tool to get the desired answer.
2. Zoho Surveys
With Zoho’s Free plan, you can conduct unlimited surveys, collect up to 100 responses, download your reports as PDF.
No limitations for survey responses. You can insert opening and closing messages, share surveys with email and have access to basic survey themes. And with $0 investment.
4. Survey Anyplace
If your SaaS business is small and you have <20 customers yet, you can use this tool as it allows to get 20 monthly responses. You can insert images too.
When you choose Typeoform’s basic plan, you can collect 100 responses per month and generate reports.
You can improve your SaaS NPS! This is how…
That’s actually the short answer. For a longer answer, let’s understand the main difference between customer service and customer experience. When you reply to a message, solve an issue, that’s customer service.
But what customers feel after interacting with you is customer experience. And these two factors determine whether he/she is going to be loyal to you and recommend you to others. In a nutshell, service is what you do, the experience is how they feel.
Let’s see what we have prepared for you to consider.
#1 Be responsive
Your customer support and customer success teams should always be quick-witted. Your customer’s question may be connected with a software feature, financial transactions or anything else. If you have a 10-day old unanswered email in your inbox (for example), your customers probably haven’t found a proper solution to their problem for a long while and are a bit annoyed.
#2 Learn from previous mistakes
Your customers don’t churn? That would be fantastic but probably that’s not possible. Those who provide negative feedback about your team or services are likely to churn very soon. Or if your customers churned and you are still unaware of the reason, at least find out why they walked away from you.
#3 Reward and thank your customers
That’s not about making a 95% discount on your services or working for them for free. You can send them a free giveaway (an e-book or a piece of content of their interest) that is not available publicly or invite them to take part in a webinar, online event, contest that is again not available to everyone.
#4 Don’t promise more than you can give
Do you make exaggerated claims regarding how skilled your team is or what benefits your customer will receive from your software? Writing in beautiful words is not considered an exaggeration or deceit but make sure you communicate the right message without any intention of misleading your visitors.
#5 Acknowledge the uniqueness
You may have 2 or 4 buyer personas but every customer is specific with his/her attitude and character. Some are gentle, others are tough, some love asking dozens of questions and are impatient, others are positive and thankful. Don’t treat all of them with the same approach because this way you disregard their uniqueness.
#6 Keep in touch
Create opportunities where your customers can engage with you and always learn something new from your content. Insert a Subscribe button on your website to notify them about your new blog posts or special offers via email, share edutaining posts on your social media accounts, congratulate them on special occasions, build relationships.
#7 Be available on different fronts
That doesn’t mean you have to accept requests via all social networks on Earth. But you can choose the main accounts where your audience is most likely to prefer for contacting you and also provide a working email address.
Inserting a Contact us form or a Live chat window on your website will again be useful for your company-customer interaction. These means not only facilitate the communication process but also increase your credibility online.
#8 Don’t be rude/angry
Hiring professional support specialists or training newbies properly will exclude the cases of making angry customers even angrier or responding to a confused customer with a rude tone of voice. Your customers don’t have to know everything about your company and software, so if they need explanations, onboarding or make you tell the same thing twice, put yourself in their shoes and be polite.
#9 Don’t rely solely on automation
Chatbots reply quickly and try to help the visitors as much as possible but frequently a robot may not be able to react correctly to specific requests. And your customer will waste time trying to connect to a real person. Even if you consider chatbots a sign of technology development, human-human interaction hasn’t lost its value. In many cases, only humans can identify or solve the problems other humans face.
#10 Work for customer success
If you are in SaaS, customer care is not enough. You should help your customers reach success with your software. As your customers are primarily business people with X business goals, you should ensure they manage to overcome their business problems with your software.
Do you measure your NPS? Are your customers satisfied with your services?