The Net Promoter Score (NPS) is an important metric that you should be monitoring and iterating upon at your B2B software company.
In basic terms, the higher your NPS, the better off you are. A high NPS means a high percentage of your customers are likely to recommend your product. A middle of the road NPS means your customers don’t necessarily dislike your product, but they’re also not going out of their way to recommend it. Finally, a low NPS means your customers are likely to be dissuading others from trying your product.
Your NPS can shed light on other key customer metrics, such as acquisition, retention, and churn numbers.
How do I calculate my NPS?
NPS ratings range from -100 to 100. You should aim to be above 0 at the very least. Fred Reichheld, developer of the NPS system, considers a score of above 50 to be outstanding.
In order to calculate your NPS, you’ll need to send a survey to all your customers. This survey can be as short or as long as you’d like, as long as you include one key question: On a scale from 1-10, how likely are you to recommend our product to others? Once you receive the results from this survey, you can quickly calculate your NPS. The calculator below is from SurveyMonkey.
A customer who answers a 6 or less to the above question is considered a detractor. Customers who score a 7 or 8 on the above question are considered passive or neutral. Finally, customers who answer a 9 or 10 are considered promoters.
What should I do once I know my NPS?
Like you would expect, you want to maximize the number of promoter customers, while minimizing the number of passives and detractors. We encourage companies to include at least two additional questions in their NPS surveys: 1. What do you like about our product or service? and 2. How can we improve our product or service? These two questions will shed further insight on your NPS.
Look at what your promoter customers enjoy about the product, and see how you can market or expand those features. On the other side, investigate what issues your passive or detractor customers are having, and work to minimize those issues or improve those customers’ experiences.
Analyzing your NPS should not be a one-time event. You should continue to collect feedback from your customers and update your NPS, since it’s a quick and easy indicator of how your customers are feeling about your product and company. Keeping an eye on this score is an easy way to figure out how to retain your current customers and acquire new ones.