Customer churn or a stream of bad reviews can break any SaaS.
If you’re in the SaaS business, you know how vital a high retention rate and positive word of mouth are for survival.
Simply speaking – unless you have a decent number of happy subscribers willing to recommend you, your growth chances are slim.
But it’s one thing to know all this and another to keep track of customer loyalty and customer satisfaction. To measure them, you need a good metric for the job. Namely, the Net Promoter Score (NPS).
This tried-and-tested metric has made its name in the SaaS world in the past decade. And despite some doubts surrounding it, it’s much more than just a buzzword. The catch? You have go beyond shooting a survey into the online space and calling it a day.
In this article, we will discuss:
What the benefits of measuring NPS for a SaaS business are
Net Promoter Score (NPS) is one of the most effective and easy-to-use tools for gauging customer loyalty. It provides insights into brand perception, growth potential, and buyer personas. Your business can use the feedback gathered in NPS surveys to better the customer experience and boost your brand image.
detractors (the respondents who chose the scores of 0 to 6)
passives (7 to 8)
promoters (9 to 10)
To calculate NPS, deduct the percentage of detractors from that of promoters:
If you gather a lot of responses, use an NPS calculator. Or have your NPS software do all the calculations for you. In Survicate, you can access your score and the response breakdown in the build-in analytics panel.
Why Should You Measure NPS as a SaaS Business?
Here is a quick rundown of why measuring the Net Promoter Score is good for your SaaS.
It's easy to distribute as an online survey
Net Promoter Score works super well as an online survey.
You can send the surveys via your website, by email, or inside your product. The latter works particularly well for SaaS businesses. They let you catch your clients at the right time and place – when they’re already engaged with the product.
Net Promoter Score is measured with a simple survey. It doesn’t require a team of trained researchers, which makes it a perfect choice even for small SaaS teams. Analyzing NPS survey data is also fairly easy.
Another advantage of Net Promoter Score is its popularity. Chances are, at least some of your competitors measure it. You’ll quickly find benchmarks and industry averages that you can compare your score.
You’ll discover if your customer success program is up to your niche standards. Or maybe it’s much better, and you can turn your stellar customer loyalty into a USP (Unique Selling Proposition)?
It helps anticipate churn rate & growth prospects
When you know your current number of detractors and promoters, you’ll predict your growth and customer churn better.
The only path to profitable growth may lie in a company’s ability to get its loyal customers to become, in effect, its marketing department.
It helps pinpoint your product’s strengths and weaknesses
No marketing campaign will help you if your product doesn’t solve your users’ problems.
NPS campaigns are a great source of information about what works in your product - and what doesn’t. Ask your respondents open-ended questions to identify what promoters enjoy and what detractors hate. Or match feedback and feature requests with user behavior data (more on that later).
What Is a Good NPS Score for SaaS?
A positive (any score above zero) Net Promoter Score shows you have more supporters than detractors. 0-30 is a good score, while 30 to 70 could be considered great. Above 70 shows the company has excellent customer experiences.
But few companies can reach this threshold. The best approach is to learn the NPS benchmarks for SaaS companies. Then, make sure you remain above the industry average.
There are various ways of running NPS surveys for a SaaS company. The multiple options allow you to connect with the customers on a preferred platform.
Here are some common methods to should try out:
Email NPS surveys
NPS emails are a tried-and-tested way of running a survey campaign.
There are two ways of surveying your customers through email: with a clickable survey link or a survey embedded into the email body. The second method is much more convenient for the user and generates a higher response rate.
If you run your surveys with Survicate, you can embed your surveys even if you don’t use any email software. And it’s even easier if you send your emails with Intercom, Hubspot, Mailchimp, or any other of our supported integrations.
Email surveys are suitable for relationship NPS surveys. Still, their response rates might be lower. Email surveys demand your users to take multiple actions (open email, open survey page, fill in the survey).
Website and in-product NPS surveys
If you’re a SaaS, most of your business happens on your website or inside your app. That’s where the majority of your customer base hangs out. Use this knowledge to meet your customers where they want to be met.
Both website and web app surveys work similarly. They appear to your customers as a pop-up survey or with the help of a feedback button.
But you don’t want to attack your users with a survey on every page and in every feature. If you use good survey software, use targeting and triggering options. You can show your surveys only to users with specific attributes, after they take the desired action, or on chosen pages.
If your business happens mostly on mobile, don’t fret. Many survey tools offer options to distribute surveys through mobile apps as well.
This survey type works for SaaS because it helps you catch your customers when they’re already engaged with your brand. It’s also perfect for transactional NPS surveys. You can ask your users about their experiences with specific features.
However, it has its limitations, too. Your users might feel the surveys disturb their workflows. And their most recent interaction with your product might affect their overall score a bit too much.
Perform some trial and error with the survey distribution methods until you find the one that works best for your audience.
How to Use NPS Survey Data to Improve Your Business?
NPS survey data will let you improve your business and boost the bottom line – no matter if you’re a product, marketing, or customer success team.
Some strategic ways you can use NPS data include:
Leverage your promoters
Your promoters state they’re willing to recommend you. Make sure they deliver on their promise.
Once you identify who they are through an NPS survey, you can start activating them. Here are a few things you can try:
Ask for online reviews (on G2, Capterra, or wherever else you need)
Ask them for a testimonial (that you can later use on your website)
Invite them to do a case study with you
Start a referral program
These ideas work great for digital marketing campaigns and will let you harness the power of positive word-of-mouth.
Follow up with detractors
Some detractors might dislike your product in general, and nothing you do will stop them from unsubscribing.
But some have just encountered friction at some point in the customer journey. And you might still have a chance to make things right before they churn or leave you a negative review.
Have your customer success team reach out to your detractors with compensation or solution to their problems. Set up response notifications on Slack, in Microsoft Teams, or another collaboration tool.
Invest in features that drive your success
Analyze the responses to the open-ended questions in-depth – they’re a mine of valuable feedback on your product.
Take note of which features stand out, which are bugged or lacking, and which are missing but often requested. Then, use the insights to prioritize your product roadmap.
Usually, product teams aren’t the ones that handle NPS surveys. But you should set up a process to pass valuable feedback to them. If you use a survey tool with unlimited seats, like Survicate, invite someone from the product team to your workspace.
But that’s not all. You can integrate your survey software with other data analytic tools that monitor customer behavior – such as Mixpanel, Amplitude, or Productboard. Then, watch how detractors, passives, and promoters interact with your product.
Close more sales by upselling and cross-selling to promoters
Customers who love your brand are more likely to try out your other products or higher subscription plans.
For example, if a customer is delighted with a trial version of your software, encourage them to upgrade to the premium version and enjoy added benefits.
Just remember to personalize the offers to the right buyer personas (or individuals, if applicable). Remain genuinely helpful, not spammy.
Net Promoter Score is an effective tool for measuring customer loyalty and overall customer satisfaction across every industry. But it’s an especially powerful tool for every SaaS. It helps:
build long-lasting customer relationships
drive positive word of mouth
improve customer experience
prioritize the product roadmap
discover software issues
SaaS companies need to choose the right NPS software to run successful surveys – such as Survicate.
After an easy, hassle-free setup, you can run simple surveys across multiple channels (email, web, and mobile). You’ll get insightful feedback to power your customer experience journeys – no dedicated team of researchers required. With unlimited seats, all your teams can harness the power of surveys with one subscription.
NET PROMOTER, NPS, AND THE NPS-RELATED EMOTICONS ARE REGISTERED U.S. TRADEMARKS, AND NET PROMOTER SCORE AND NET PROMOTER SYSTEM ARE SERVICE MARKS, OF BAIN & COMPANY, INC., SATMETRIX SYSTEMS, INC. AND FRED REICHHELD.