What is Net Promoter Score (NPS)?
Net Promoter Score measures customer loyalty and satisfaction by asking one simple question: "How likely are you to recommend us to a friend or colleague?" on a 0-10 scale. Respondents are categorized as Promoters (9-10), Passives (7-8), or Detractors (0-6). NPS is the most widely used customer experience metric in the world.
The Formula
NPS = % Promoters − % Detractors Range: −100 (all detractors) to +100 (all promoters)
Passives (7-8) are excluded from the calculation but represent at-risk customers who could become promoters or detractors.
Worked Example
A SaaS company surveys 200 customers: 110 rate 9-10, 50 rate 7-8, and 40 rate 0-6.
- Promoters = 110 ÷ 200 = 55%
- Passives = 50 ÷ 200 = 25% (not used in formula)
- Detractors = 40 ÷ 200 = 20%
- NPS = 55% − 20% = +35
📌 An NPS of +35 is considered good for SaaS. The 25% Passives represent an opportunity, targeted engagement could convert many to Promoters.
Why This Matters
Churn prediction
Detractors churn at 2-4x the rate of Promoters. Identifying and proactively addressing detractor concerns is the most efficient way to reduce churn.
Organic growth
Promoters generate referrals that have 4x higher conversion rates and 16% higher LTV than non-referred customers. High NPS companies grow 2x faster than competitors.
Product roadmap input
Follow-up "why" questions from NPS surveys provide qualitative data that shapes product development. Detractor reasons reveal critical gaps; Promoter reasons reveal differentiators to double down on.
Common Mistakes
❌ Surveying only happy customers
Cherry-picking survey recipients inflates NPS artificially. Send surveys to all customers, including those who recently had support issues or are in their first 90 days.
❌ Treating NPS as the only satisfaction metric
NPS measures loyalty intent, not actual behavior. Pair it with retention rate, usage metrics, and CSAT for a complete customer health picture.
❌ Not acting on the feedback
Collecting NPS without follow-up processes wastes the data and annoys customers. Close the loop, contact detractors within 48 hours and share insights with product and CS teams.
Industry Benchmarks
| Category | Good | Average | Poor |
|---|---|---|---|
| B2B SaaS | +40 to +60 | +20 to +40 | Below +10 |
| B2C Tech | +50 to +70 | +30 to +50 | Below +20 |
| World-Class Companies | +70+ | +50-70 | Below +50 |
Source: Bain & Company NPS Benchmarks
Benchmark data sourced from Bain & Company NPS Benchmarks.