How to use NPS in a SaaS Business

How to use NPS in a SaaS Business

Software as a Service (SaaS) is an application that consumers can access over the web or the Internet. Examples of popular SaaS applications are Google (Gmail, Analytics) and Facebook. SaaS can also be used to deliver services to enterprise customers, to help them with accounting, tracking sales, planning and so on. There are many advantages of SaaS. One of them is that you can access the SaaS service from any computer, as long as you have an Internet connection.

SaaS businesses are increasingly worrying about the success of their customers, so it is essential to understand how your product is serving these customers and what difficulties and problems they are having. One of the most effective ways to collect feedback is using the Net Promoter Score (NPS) methodology.

NPS: What is and how to calculate it

Net Promoter Score (NPS) is a metric that measures the likeability of your product. In other words, it tells you whether your customers like your service and will recommend it to others. NPS is calculated in the following way: customers are asked to give a rating to the product ranging from 0 to 10. Customers who rate the product 9 and 10 are called promoters. Customers who rate the product 7 and 8 are called passives, while customers who rate the product from 0 to 6 are called detractors.

NPS = (percentage of promoters) – (percentage of detractors)

The NPS score ranges from -100 to 100. Therefore, NPS for SaaS is a measure of the favorability of your product. It tells you whether your customers approve of your service, and whether they are satisfied with it. It is a way for customers to give feedback about your service. NPS was created before the invention of SaaS services. However, it is very suitable to be used with SaaS services.

Quick and non-intrusive

NPS lets your customers know that they matter to you. It shows that your company is interested in the opinions of its customers. Many a times, customers want to give feedback about a service, but are too busy to do it or forget to do so. NPS for SaaS allows your customers to give feedback at the touch of a button. Therefore, NPS surveys are quick and also non-intrusive. NPS surveys are also short, so that they do not irritate the customers with lots of questions. The survey does not distract the customer while using the service.
NPS for SaaS also lets your company know whether they should add new features to your product. If you see that the NPS is not growing over time, it is time to add new functionality. NPS also allows customers to add a comment after giving their rating. In this way, you can get specific information about how you can improve your service.

Reduce churn

NPS can be used to reduce churn, which is the percentage of subscribers who discontinue your service after a certain time. Within NPS, the detractors are more likely to leave a service after a certain period of time.

Drive referrals

NPS can also be used to drive referrals to your company. So if one of your customers rates your service a 9 or a 10, the service can then ask the customer whether he or she would like to refer the service to a friend. In this way, you can increase the brand loyalty of your product. loyalnow offers a feature for promoters to referral to their contacts through social networks.

What is a good NPS score

An NPS score that is above 20 shows that your service is well-liked by your customers. Companies such as Amazon and Salesforce have NPS scores of 60. NPS can be used to increase sales and profits of a company. It is a way for the company to know about the complaints of its customers. For example, if a particular feature is not working properly, or if the server is down too often, the company can know. NPS lets your company know how happy the customers are with its service. You can compare your NPS score with those of other companies, to tell you how well you fare against your competitors. You should connect the NPS to your customer database, so that you can get information on customer behavior.

Tips and best practices to use NPS for SaaS

Segments

You can divide the customers into segments, and get the NPS within each segment. For example, assume your SaaS service is sold in 2 plans, one that is a high fee plan and the other that is a low fee plan. You may find out that while subscribers of your high fee plan are satisfied with your product, subscribers of your low fee plan are not satisfied. Therefore, you can concentrate your company’s resources on subscribers who are using your low fee plan. In this way, you can analyze the NPS within different subscriber segments.

Trial and paid customers

SaaS companies often have both trial and paid customers. You can get the NPS for both trial and paid customers separately. You can have separate surveys for trial customers and paid customers. This is important because the purpose of using the product is different for trial customers and paid customers. Trial customers are more interested in the features of the service and whether the service satisfies their need. Paid customers, on the other hand, are more concerned with the price of the service, the user interface and other such issues.

Measuring NPS continuously

You should measure the NPS for SaaS regularly. This gives you an idea of how your service is growing. If your NPS is falling compared to levels in the previous year, you will recognize the problem and take steps to deal with it. Your NPS may grow after you have introduced a particular feature. In this way, you can also find out which of your product features are popular and which are not. By measuring the NPS continuously, you can track the evolution of your product, and make sure that the service is always growing.

In-app NPS surveys

It is a good idea to deliver NPS surveys in-app. This is because you can catch your customers in the moment, who can then tell you what they think about the product at that time. In this way, you can also get NPS scores for particular features. In-app surveys are a good way to get a lot of data quickly.

In conclusion, NPS is a great metric to help you increase the growth of your product, provided you use it right. NPS is just the beginning, not the end, of your aim to find out about your customer satisfaction levels.

I understand that behind a happy consumer, there is always a team working hard to make it possible. As an entrepreneur, I want to facilitate and provide ways for companies to deliver an incredible experience for their customers.

Willian Becher – who has written posts on loyalnow.


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