What is Considered a Good NPS Score and How To Improve It?
Before we get into what is considered a good NPS score, we have some good news and some bad news.
We will get the hard news out of the way first: what a good NPS (or Net Promoter Score) is depends on your industry.
- Some industries like SaaS will have an average NPS of 30.
- While others like education will score on average around 70.
You have to compare your NPS to your industry benchmark as well as your competitors and see where you rank. This will let you know how well you are truly serving your customers.
The good news: having a positive NPS score (0-30) means you are on the right track.
Source: Userpilot. Want an NPS survey like this? Jump on a call with us!
You have more customers enjoying your product than hating it.
But there is always room for improvement-especially if it sits below your industry average.
So if you want to know if your NPS score is good and how to improve it, in this post you will find:
- a definite resource for calculating NPS score
- industry benchmarks to measure yourself against
- the steps you need to take now to improve your own NPS.
Want a quick and surefire way to find out what your NPS score is? Set up an NPS survey in 5 minutes with ZERO code using Userpilot!
Table of Contents
- What Is NPS?
- How to calculate NPS score?
- What Is the Average NPS score?
- What Is Considered Good NPS Score, and What Is a Bad NPS Score?
- How to improve the NPS score? The Steps You Should Be Taking Now
TL;DR? Grab our summary:
- Net Promoter Score is the result of a one-question survey asking the users how likely they’d be to recommend your product on a scale from 1 to 10.
- NPS is the difference between the percentage of the promoters of your product (people who voted 9 or 10) and the proportion of detractors (users who selected 6 or below).
- The average NPS score depends on the industry
- A good NPS score is anywhere from 0-30, excellent is above 50, a bad NPS score is below 0
- You can start improving your NPS score by using a powerful tool to run your NPS survey either through email or within your app and comparing the results with your user behavior analytics
- Once you analyze the results you can develop in-app solutions that will address each segment of the users who responded to the survey
What is NPS?
NPS or Net Promoter Score is what many consider to be the gold standard of measuring customer loyalty.
The metric was developed by Bain and Company in 2003 and has since been adopted by millions of businesses.
You have probably seen the pop-up on plenty of websites or have sent out mass emails asking the same question.
“On a scale of one to ten, how likely is it that you would recommend [your company/product/service] to a friend or colleague?”
Depending on how you implemented the survey-and your actual product-you will be left with a variety of responses.
- 0 (not at all likely) meaning that they would rather recommend Crocs as a fashion choice than your product to their colleagues.
- 10 (extremely likely) meaning these are the people who swear by your product and would be willing to go into battle screaming its name.
Customers then fall into three categories and uniquely relate to their usage of your product:
- Promoters or power users respond with a score of 9 or 10. They are typically highly engaged users who are using all of your key features.
- Passives or fence sitters respond with a score of 7 or 8. They are somewhat loyal to your product but maybe only have one use case and could consider another option as soon as they see a better fit.
- Detractors or disengaged users respond with a score of 0 to 6. These customers see a lot of flaws in your product and may even persuade others to avoid signing up.
So, how do you actually take these responses and turn them into a score and what is considered a good NPS score?
It comes down to basic math.
How to calculate NPS score?
To calculate your NPS score all you have to do is tally up your three categories and convert them into percentages. Scores can range from -100 to 100.
Next, subtract the percentage of detractors from the percentage of promoters.
The number you are left with is your NPS score!
For example, let’s say you launch a NPS survey in your app and 100 users answer it.
- 50 respond with 9 or 10, so they fall in the promoter category and qualify as 50%.
- 30 respond with 7 or 8, fall in the passive category and qualify as 30%.
- 20 respond with less than 6, so they fall in the detractor category and qualify as 20%.
50% – 20% = 30%
So your NPS score is 30!
What is the Average NPS score?
So if your score is 30, does that mean you can take a break from product management?
Like we mentioned in the intro – the average NPS varies between industries.
What might seem low to you might actually be high for your industry or vice versa.
The reason for the variations is because no customer is alike. Customers for different industries will have different expectations and will be more likely to answer surveys in certain ways.
Some products are also inherently easier to produce satisfactory results. (Well, software is not one of them. Ice-cream on the other hand…)
Let’s take a look at the average NPS score across several common industries from the Retently 2020 NPS Benchmark report.
So why do some industries top the list, while others hover around the bottom?
Let’s compare the top of the list and what we are most concerned about: SaaS.
The reason why the average NPS for SaaS products is so much lower than the other industries is because software companies can still operate profitably without an overwhelming number of promoters.
Especially if there are not so many alternatives on the marker or if your tool is particularly sticky (aka moving away to a competitor is more hassle than it’s worth) – your users will stick around even though they are not 100% happy with your product.
As long as the tool continues to solve business needs it will continue to turn a profit. However, the worse experience customers have, the more likely they will churn or be open to switching to another solution.
Last year the average NPS for SaaS companies was 26, so the number is trending upwards. And so should your concern for providing an amazing experience for your users.
Let’s see what is considered a good NPS score and what should be a reason for alarm.
What is Considered a Good NPS score, and What Is a Bad NPS Score?
So now that we know what the average NPS score is across industries we can talk about what is considered a good NPS score.
- Anything above 0 shows that you have more customers satisfied than not.
- You want to use your industry benchmarks to set goals for where you want to be and for what to beat.
- Do not stress if your NPS is lower than the average. Anything in the region of 0 to 30 is pretty good across industries. Above 50 is excellent.
You may be wondering: What is the best NPS score for SaaS?
One of the highest NPS scores for a SaaS company is SugarCRM at 94. This is pretty impressive considering that over 2,000,000 people around the world use their software.
Their straightforward onboarding process and video tutorials make it the CRM of choice for Fortune 500 companies like T mobile and Zurich insurance group.
So we have seen what is considered a good NPS score but what is the worst?
What is a Bad NPS Score?
The golden rule is to always keep your NPS above 0. Anytime that you have more detractors than promoters, it is time to do some serious damage control.
Detractors will be not only less loyal to your brand but also ready to drag your business through the mud.
You will also want to compare your NPS score to your competitors. If they continuously outpace you, it will also mean that more of your customers will consider them as a better alternative.
Let’s have a look at an NPS study conducted by FYI on document apps. They found that the common pain point for all the users of these document apps was poor document organization.
Ironic considering that was what they were built for, but shows if an issue continues unaddressed for years, your users will speak out. (They will also bad mouth you to your competitors.)
So we have seen what is considered a good NPS score and the negative implications of having a bad one. Let’s dive into the steps you should be taking now to improve your NPS.
How to improve the NPS score? The Steps You Should Be Taking Now
You should now know if your NPS is relatively good, great, or if you have a lot of work to do. (If you still don’t know your NPS – why not sign up for a free Userpilot trial and find out?)
The problem is that many organization only use their NPS score to give high fives around the boardroom or chastise their product mangers.
The survey is time-consuming to implement and then your left with all this data and don’t know what to do with it.
It’s like putting a magnet on a compass. You keep spinning around in circles unable to pick a direction for where to direct your resources.
That is why you need a tool to collect the data in a thoughtful and organized way, conduct a follow up qualitative survey (to find out why some of your users are happy and the others are not) and combine those insights with your product usage analytics.
This will explain why your detractors feel the way they do, and you can take action to convert them into promoters. That way you will not only raise your NPS score, but also contribute to lower churn and higher retention!
Step 1: Choose the right tool to run your NPS survey
Before you get started with running your NPS survey you are going to want a tool to collect and organize all the data and can easily combine it with your user analytics.
One of the most common is the ubiquitous Survey Monkey and then you have other standalone apps that only provide NPS (e.g. Wootric or Satismeter). Some are more advanced user engagement platforms offering NPS as one of their features (e.g. Userpilot). Userpilot offers you in-depth analytics and in-app experiences, so it’s easier to act upon your (for more information about NPS tools – refer to our previous post)
Once you select the tool to collect the data you have two ways of launching it: Email and In-app.
- Less intrusive-users open it at their own discretion
- Lower response rates-users will likely ignore most surveys in their inbox
- Better for follow-up questions
- More intrusive-could get in the way of what the user has been doing in your tool…
- Better response rates- Users more likely to answer honestly in the moment
- Easier to track responses and set up follow-up questions as well as experiences
- Can be triggered based on user behavior
While email is the most common method, in-app NPS surveys are becoming more and more popular. Why?
You can design their look and feel to match your brand and be less intrusive.
You can change the text to be more unique. Instead of “not likely” try “not in a million years!” You can also include follow up questions for further insights.
You can decide when your survey will appear based on specific domains, pages or your user segments. Maybe you would like to find out what a particular set of new users think of your product.
Finally, to not appear spammy or potentially deter your users from signing in, you can choose the frequency for launching the survey modal.
You can even set the survey to appear based on how many pages they visit!
With this data in hand, you will be able to get a complete picture of how satisfied the majority of users are with your product or a specific segment.
But once you find your NPS score what do you do with it?
Step 2: Understand the Reasons Behind the Low Scores
Now you know what is considered a good NPS score and unless you have an NPS score above 50 from your first survey, there are several directions you can go in.
Don’t get overwhelmed though! The key is to combine your NPS results with your user behavior data and develop product experiences that will help your users adopt more effective ways of using your product – that correlate with higher NPS scores.
Speaking of adoption:
The easiest way to cross-reference your NPS data with your user behavior is to use a tool with an interactive dashboard:
You will also want to track how your overall NPS score changes throughout each quarter.
This gives you the ability to see in real-time which feature releases have the most impact on customer satisfaction and which updates might have tanked your score. Conversely – you will be able to see the impact of the experiences you create on improving it.
Then, to get a more granular view, organize between your promoters, passives, and detractors to see what are the common user behavior patterns and responses between each group.
Finally, you may want to tag responses with specific keywords to be able to see user sentiment at scale and understand *why* most of your users feel in a particular way – good or bad.
You can then organize and track the responses based on the feature they are commenting on or the topic that has either helped or hindered their experience.
Then you can see what topics and features are contributing the most negatively and positively to your NPS score.
If the word ‘bug’ keeps coming up in negative responses, that is your cue to bring the issue up with your developers.
Step 3: Use the data to create in-app experiences that will change your user’s opinion
Once you understand how your NPS score is connected to each user segment you can address the issues through updates, hotfixes or in-app experiences.
Here are a few important considerations:
- Only focus on users who fit your customer persona. Most likely a large portion of your detractors won’t like your product because it wasn’t built for them.
- Focus on the issues that align the most with your product roadmap.
- Dedicate your time to improving your product for a specific survey segment. Converting passives into promotors, marketing your product aggressively to your promotors, shifting your detractors into passives.
Many times, the most common issue for detractors or passives was a poor onboarding process that left them unable to see the value in your product.
If you look at the activity of these segments you will often see that they are not reaching your key activation points. They might even be complaining in their follow up questions about not having features that already exist in your product.
If this is the case, then:
- identify the common issues using your keyword tags (e.g. ‘missing’ feature that is actually there;
- create an in-app experience flow that will nudge the users to discover and adopt this feature.
E.g. See how Postfity did this in Userpilot:
After noticing that several detractors were missing the LinkedIn Video scheduling feature:
…Postfity Product Marketing team added a tooltip pointing the users who have LinkedIn accounts and have not used this feature to it:
That way, Postfity managed to reduce the number of users who were dissatisfied because they thought that the tool didn’t have this feature.
They then did the same with several other common ‘pet peeves’ shared between the detractors. All thanks to the qualitative follow up to the NPS survey and the keyword tags that allowed them to see trends.
Would you like to use a similar tool to discover and instantly fix what keeps your users dissatisfied? Jump on a free consultation call with us to see how you can set it up!
Wrapping things up:
Your NPS score is not the definitive metric to determining customer satisfaction but it can definitely show if you are moving in the right direction.
Think of your product as a ship and your NPS is your compass. Your user feedback will point you in the right direction for developing features that continue to improve the lives of your users.
It will also let you know if you need to fix your path if some issues start to steer you off course to providing value.
Most importantly, it will let you know if you need to completely change course and focus on the most pressing issues that are coming from your detractors.
Net promotor score is a business metric to measure how loyal your customers are. It is measured by the responses to the question
Subtract the number of detractors (Those who answer 0-6) from the number of promoters (Those who answer 9-10)
It depends on the industry but for SaaS in 2020 it was 30.
Zero to thirty, above fifty is excellent. Any score below zero can be considered bad.
You can run one either in-app or through email
Compare your NPS survey results with user behavior. Develop solutions that address user concerns and follow your product roadmap.