April 26, 2024
min read

SaaS Adoption Metrics: Guide To Net Promoter Score For Customer Success

The Net Promoter Score (NPS) is a key metric used by SaaS customer success teams to measure how they are faring among customers. This critical SaaS adoption metric asks how likely a customer is to recommend your business to other potential buyers. In this article we breakdown what NPS is, how to measure NPS and what you can do to improve your NPS.

Written by

Marc Chia

The Net Promoter Score has become the gold standard of the best customer satisfaction metrics. It was introduced almost 20 years ago by Brain & Company. It’s currently utilized by many companies in almost every industry or organization, including SaaS, to improve services and products and to trim customer churn.

According to the London School of Economics, “On average, [an] NPS increase of around 7% correlates with a 1% revenue growth”. Hence businesses need to focus on how they can improve the NPS score on the go, as it’s the fundamental indicator to gauge customer loyalty and satisfaction.

In this guide, we will dive into this high-end data tool to discover what exactly makes it so beloved by the Customer Success professionals and discuss the how to use it effectively in SaaS companies;

What Is Net Promoter Score?

The NPS (Net Promoter Score) is a metric that mainly measures how likely a customer is to recommend your business to other potential buyers. Customer Success teams love to use it as it is effective and simple to measure. On the other hand, its simplicity also lends itself to becoming a vanity metric quickly if not accompanied by sufficient context.

How To Measure NPS?

While measuring NPS may sound a bit complex, you can actually calculate the score of your brand in just a few simple and quick steps:

Step 1. Survey the customers on a scale of 1 to 10, how likely they would be to recommend your product to someone else.

Step 2. Categorize their responses into Detractors (1-6), Neutrals (7-8) and Promoters (9-10)

Step 3. Subtract the percentage of detractors from the percentage of the promoter to determine the NPS. For example, if you survey 100 customers, & the final result is made up of around 70 promoters, 20 detractors, and 10 passives, the NPS would be around 50 (i.e., 70% - 20% = 50%).

Any number over 50 is typically considered a good NPS, with 75 or higher being extraordinary. NPS varies by industry, so you will need to take this into consideration while measuring success.

What Tools/Methods Can You Use To Collect This Info?

A tool to measure NPS is important but before we dive into it here is a checklist of essential things to consider before deciding on which software to use. Each business will have distinct needs, but you have to be able to answer “YES” to all of the following questions:

• Can you collect responses without needing to pay extra?

• Can you create a follow-up query with to the NPS survey to obtain qualitative feedback?

• Can you automate the follow-up based on the responses that users have submitted? For example, you may want to direct detractors to provide feedback to your team while promoters may be directed to fill in a testimonial.

• Can you efficiently segment the audience for the NPS survey?

• Can you flag/tag responses?

• Can you launch the NPS survey easily?

Consider the following user sentiment measurement tools to help support your NPS collection. These tools generally provide segmentation for surveys and are hence helpful.:

• Hotjar: It specializes in session recordings and heatmaps and can launch inclusive surveys in-app. However, you cannot segment the audience depending on the product analytics.

• SatisMeter: This tool concentrates on user sentiment and provides various types of surveys.

• Nicereply: It is focused on in-email transactional surveys and support systems.

Recommendations on Improving NPS

1) Know Where You Currently Stand

The very first step to take for improving the NPS score is to understand the current state of your existing NPS campaign. The most important question is “What is the existing feedback and you acting on it?”

Other key questions include:

• What’s the present response rate?

• Are you capturing feedback at every relevant touchpoint handled by different teams?

• At what frequency are you exactly sending your surveys?

• Are you taking the needed action?

Knowing what’s happing in the organization & how you’re interacting with the promoters, neutrals, and detractors is pretty important. Make sure to collect all this data before moving forward.

2) Close the Loop With Customers

Organizations should “close the loop” with customers upon receipt of the information. This means using the NPS as a conversation point to dig deeper into the context & reasons behind their specific score. Additionally, you can use different methods and techniques, like follow-up emails, direct interviews, etc., to collect more feedback in order to concentrate on your efforts in a specific customer-centric direction.

Start by taking action whenever detractors appear. Have a Customer Success team member reach out to the customers, take all of their complaints seriously, & work hard to fix the situation. Showing great care is the best-possible step to repair the relationship with your potential customers.

3) Adoption Must Be Contextualised

It is rarely useful to consider your customers as a single homogeneous group. More likely they will be segmented. In the case of B2B SaaS, this may be in terms of their functions such as Sales or Marketing teams. In the case of B2C SaaS this may be in terms of their user characteristics such as age or geography. To improve NPS we must address each segment’s concerns separately. As we move forward with driving the adoption of systems, each touchpoint should be viewed from the perspective of which segment you are trying to influence. Discussion of NPS should take place on a segment level to help understand what challenges they are facing & what action has to be taken to drive the Net Promoter Score.

Our Takeaway

The Net Promoter Score is a super valuable metric that can efficiently redefine the customer experience if used appropriately. In this guide, we have provided insights regarding what the Net Promoter score actually is, how you can measure it accurately, and which strategies you can use to improve your NPS. All this information will help you in improving customer loyalty, increasing revenue, and driving a customer base.

Good Luck, folks!

If you are a customer success team looking to up your NPS and improve your engagement with users via in-application walkthroughs and messages please check us out at https://www.usertip.com or follow us on Linkedin for more tips to drive user adoption.

Usertip is the first Southeast Asia digital adoption platform designed to help scale your onboarding, training and support for digital solutions. Operating from Singapore, Indonesia and Australia our no-code platform delivers in-application walkthroughs directly on your digital solutions. Seamless user experience and on-demand learning are all delivered to your user’s fingertips within seconds. Click here to find out more.

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