How to Decide and Achieve a Good NPS Score
Introduction
The Net Promoter Score (NPS) is not just another metric; it’s a window into your customers’ souls. Think of it as the ultimate barometer of customer loyalty. Developed by Fred Reichheld in 2003, it assesses how likely customers are to recommend a company’s product or service. Customers answer the question:
NPS is valued for its simplicity and its correlation with business growth, but it should be used alongside other customer experience metrics for a complete picture. Many businesses leverage NPS to refine their customer service strategies and improve retention. However, critics argue it oversimplifies customer sentiment and lacks actionable insights.
NPS can uncover crucial insights into what drives customer satisfaction, whether it's products, stores, or staff. It’s like a Swiss Army knife for customer experience: versatile and indispensable. Businesses can effectively leverage these insights to collect NPS customer feedback.
Calculating your net promoter score is straightforward. Here’s the recipe: subtract the percentage of Detractors from the percentage of Promoters. Customers who rate your business from 0 to 6 are the Detractors, those pesky critics who can hurt your brand.
On the flip side, customers who score 9 or 10 are the Promoters, your brand champions. And then there are the Passives, sitting comfortably in the middle with scores of 7 or 8 to achieve good and favorable net promoter scores.
If 70% of respondents are Promoters and 20% are Detractors, your NPS would be 50 (70-20). The scale ranges from -100 to 100, where a negative score indicates more Detractors than Promoters—a clear sign that something needs fixing.
Simple to calculate but profound in its implications. It is a critical tool to understand your customers and show prospects how satisfied your current customers are. There are other important B2B sales tools that you should consider adding to your tech stack as well.
A “good” NPS score typically indicates a positive customer experience. It generally reflects high levels of customer satisfaction and a strong customer satisfaction score and loyalty.
Here are some key points regarding NPS scores:
An NPS above 0 is a good start, indicating more promoters than detractors.
- A score of 60 or higher signals
A score of 60 or higher signals that your customers are truly in love with your brand.
For SaaS companies, a score of 40 is considered excellent.
Scores below 0 indicate you have some serious work to do.
Competitive Positioning
Determining if your score is good involves two main approaches: the Absolute NPS Method and the Relative NPS Method. Both provide unique insights and help contextualize your score within a broader framework. NPS can uncover crucial insights into what drives customer satisfaction, whether it's products, stores, or staff. It’s like a Swiss Army knife for customer experience: versatile and indispensable. Businesses can effectively leverage these insights to collect NPS customer feedback.
The Absolute NPS Method focuses on internal benchmarks, including net promoter score benchmarks. It considers the number of Promoters, Detractors, and Passives without external comparisons. This method is simple: if your score is positive, it’s a good sign. A negative score, however, means you have more detractors than promoters, indicating areas needing improvement.
An average NPS score above the neutral range generally indicates a positive customer experience. This method provides a straightforward way to gauge customer loyalty and satisfaction internally.
The Relative NPS Method involves comparing your NPS with industry averages and competitors. This approach provides a clearer picture of your standing in the competitive landscape.
Industry benchmarks contextualize your NPS within the broader market. Regional differences and market positioning can influence results, so consider these when comparing scores.
Competitive Positioning and Next Steps
Different industries have different benchmarks for what constitutes a “good” NPS score. For instance, in 2024, consulting firms boasted an impressive average NPS of 76, while financial services and health insurance scored 73 and 48, respectively. Department stores and smartphone companies also fared well, with scores of 59 and 56. Conversely, the consumer payments industry struggled with an average NPS score of -6, highlighting significant customer dissatisfaction.
Various factors, including industry competition levels, influence these benchmarks. Industries with fewer competitors often have higher NPS scores due to less comparative dissatisfaction. External factors, such as economic conditions and global events, also significantly shape these benchmarks.
Various factors can influence your NPS score, making it dynamic and sometimes unpredictable. Industries with fewer competitors often have higher NPS scores due to less comparative dissatisfaction. Companies in less competitive markets with unique offerings typically see higher scores.
Customer tolerance also plays a role. Increasing customer touchpoints, transparency, and accessibility often lead to higher customer tolerance. This tolerance reflects how forgiving customers are regarding service failures or product issues. Significant global events can affect NPS across entire industries.
In the SaaS sector, low switching barriers can
In the SaaS sector, low switching barriers can lead to lower NPS scores. Conversely, high switching barriers enhance brand loyalty and, subsequently, NPS scores. Understanding these factors helps businesses tailor strategies to improve their NPS.
Improving your NPS score demands a customer-centric mindset and continuous improvement. Start by closing the loop with customers and translating their feedback into actionable insights. High-velocity learning and action-improvement mechanisms are crucial for meeting NPS goals and enhancing customer satisfaction.
Creating memorable customer experiences and converting detractors into passives can significantly boost your NPS. Engaged employees, including customer service agents, often correlate with higher NPS scores and improved customer service.
Let’s explore specific strategies.
→Data Analytics and Key Metrics
Close the Loop with Customers:Closing the loop with loyal customers involves collecting information when ratings are below 8, allowing personalized follow-ups to improve loyalty. Communication methods for this follow-up include emails, phone calls, SMS, and other direct modes. Engaging detractors offers a chance to resolve issues and potentially change their negative perceptions. Gathering insights from detractors allows for tailored solutions to turn unhappy customers into loyal advocates. This approach not only improves individual relationships but also boosts overall NPS. Train Your Team on NPS: Training your team on NPS fosters a unified approach to customer satisfaction. Empowering employees with knowledge of customer impact can lead to meaningful service changes. When every team member understands the importance of NPS, it becomes easier to drive improvements and achieve higher scores. Implement Organizational Changes: Implementing necessary changes based on NPS feedback is crucial for improving customer experience. Organizations should implement changes in a structured and strategic manner, addressing specific areas highlighted by NPS feedback. After implementing changes to your current sales workflowsand customer service, re-track NPS to assess the impact on customer perceptions. Using NPS Data for Business Growth:NPS data is invaluable for business growth. It indicates future growth and correlates positively with customer loyalty. Companies that adopt NPS grow twice as fast as competitors. High NPS scores can increase word-of-mouth referrals, boosting organic growth. Leveraging NPS data helps refine strategies and continuously improve customer experience. A strong NPS score can attract investors by showcasing customer loyalty and satisfaction. High NPS contributes to a more favorable public perception of a brand, enhancing its competitive advantage. Tools for Tracking and Analyzing NPS: Effective NPS tools are crucial for gaining actionable insights. These tools should allow for the customization of surveys, enabling tailored questions and formats. Automation in NPS software streamlines survey distribution and follow-ups, enhancing efficiency. Real-time reporting capabilities enable businesses to monitor and analyze NPS data as it comes in. Integrations with existing CRM and helpdesk systems enhance NPS tools’ functionality, making them indispensable for tracking and improving customer loyalty.
A high NPS score has numerous benefits. It strengthens customer loyalty, ensuring customers are more likely to continue using your products or services. It also enhances a company’s reputation, attracting quality leads and potential customers.
Maintaining a high NPS score positively influences customer lifetime value (CLV), boosting revenue over time. NPS surveys enhance operational efficiency, helping businesses identify areas for improvement.
Mastering your Net Promoter Score isn’t just about numbers—it’s about understanding your customers on a deeper level and creating experiences they can’t help but talk about. By consistently listening to feedback, closing the loop with detractors, and leveraging actionable insights, your business can cultivate stronger customer relationships and foster sustainable growth.
NPS is a dynamic metric that evolves with market trends, technological advancements, and customer demands. Treat it as a continuous improvement tool, not just a one-time data point. Empower your team, refine your strategies, and stay adaptable—these are the driving forces behind an excellent NPS.
Now is the time to take action. Commit to meaningful changes, engage with your audience authentically, and turn insights into opportunities. By doing so, you’ll boost customer loyalty and satisfaction and position your brand as a leader in your industry. The path to long-term success starts here—what will your next step be?
A good NPS score is above 0, but if you're hitting 60, you’re basically rocking it! SaaS aficionados should aim for a score of 40 for some serious bragging rights.
→Conclusion
To calculate your NPS score, simply take the percentage of Promoters (scores 9-10) and subtract the percentage of Detractors (scores 0-6). Passives (scores 7-8) are like wallflowers at a party—nice to have, but they don’t count!
NPS scores are swayed by market competition, customer tolerance, global events, and the quirks of your industry—it's a messy mix that can leave you scratching your head! So, keep an eye on the big picture and your customers' vibes to boost those scores.
To boost your NPS score, definitely close the loop with customers and don’t forget to whip your team into shape on NPS training. It's all about turning feedback into action—your customers will thank you with higher scores!
A high NPS score means you're not just winning customers, but turning them into enthusiastic fans who stick around longer and help polish your brand's halo. In short, it boosts loyalty, reputation, and your bottom line—talk about a win-win!
About the Author
Jon Gillespie-Brown is the Founder and CEO of Nalpeiron, a leader in cloud-based software licensing, entitlement management, software monetization, and analytics. With over 20 years of expertise, he works with enterprise B2B SaaS and IoT companies to optimize revenue models, accelerate go-to-market strategies, and scale with confidence. Jon is recognized as an authority in software licensing, software monetization, and software analytics, holds two issued U.S. patents, and is the author of five books. He also serves as a strategic guide to customers, helping them navigate and capitalize on the once-in-a-generation shift driven by AI, redefining how software is built, delivered, and monetized. For over 20 years, Jon has been a Professor at University of Colorado Boulder, a lecturer at University of California, Berkeley and Stanford University, and an Entrepreneur in Residence at London Business School.
Nalpeiron: A Long-Term Partner for the AI Era
At Nalpeiron, we go beyond technology — we act as a strategic partner in licensing, monetization, and growth. For over twenty years, enterprise and IoT companies have trusted us to guide and evolve their business models.
As AI shifts software from seats to usage, outcomes, and agent-driven activity, legacy approaches fall short. Nalpeiron enables this transition through entitlements as the control plane — a centralized system of record across SaaS, on-prem, IoT, and offline environments.
From strategy to execution, we help companies adapt faster, launch new models, and stay in control — making Nalpeiron a partner for the AI-driven future of software monetization.
Ready to Optimize Your Strategy?
See how Nalpeiron helps companies implement flexible monetization strategies that support both product-led and sales-led growth motions.
Book a Demo