B2B SaaS NPS Benchmarks: Gauging & Improving Your NPS Score
Have you ever heard of the flywheel model?
A flywheel is a spinning device that stores rotational energy. While it needs just a little push (or crank) to start spinning, it eventually gains momentum on its own and keeps spinning.
Don’t worry, this isn’t a blog post about physics or engineering. But that concept gives birth to the “Flywheel Model” in SaaS.
For a business-to-business (B2B) SaaS company, the flywheel can also be the picture of your customer journey. As you focus on retaining and building relationships with your customers, they start bringing in referrals (adding more momentum to your “flywheel”).
But fostering advocacy among your existing customers is so much easier said than done. How do you even do it?
Well, it starts by measuring how loyal your customers are and how likely they are to become advocates.
And that’s where the Net Promoter Score (NPS) comes in.
In this guide, we will talk about what NPS is and why it is important for SaaS companies. We will also talk about B2B SaaS NPS benchmarks and how to improve your NPS score.
So let’s get started.
What Is The Net Promoter Score & How To Calculate It?
NPS is a survey-based metric that measures customer loyalty and even advocacy. It’s useful for a lot of different types of businesses that rely on recurring revenues and customer relationships in order to grow sustainably.
And that includes the SaaS business model.
When it comes to measuring your SaaS NPS, there are a few steps you need to do: create and launch your survey, categorize your respondents, and calculate your NPS score.
Let’s talk about these steps one by one.
Step 1: Create & Launch Your NPS Survey
NPS is based on your customers’ answer to one simple question: “How likely are you to recommend our SaaS product to a friend or colleague?”
Your respondents could answer on a scale of 1 to 10, 1 being not at all likely, and 10 being very likely.
That’s the basic NPS question. However, if you’re looking to dig deeper and gather more specific customer feedback about what they love and don’t love, you may also ask follow-up questions, such as the following:
- What is the main reason behind the score you gave?
- What features do you find the most helpful?
- What features do you find the least helpful?
- On a scale of 1 to 5, how would you rate our customer support team?
- What features or tools would you like to be added to our platform in the future?
- Do you have further comments about your experience with our product?
Questions like these can help you gain more specific insights into what may or may not affect how happy your customers are with your SaaS solution.
Once you’ve created a survey, you can send it to your customers via email, survey software, or even a more specialized NPS software.
What’s more, you could also design different surveys for relationship NPS and transactional NPS.
Relationship NPS surveys are for measuring the overall feel of your relationship with your customers. Doing this typically involves sending out an NPS survey to your customers regularly (say monthly or quarterly).
On the other hand, transactional NPS measures how a particular interaction with a user affects customer loyalty and advocacy.
For example, you could set up an NPS survey question for customers who reach out to your customer support team. They would have to answer it right after the conversation and rate their experience with your customer support team.
This is a good way to measure not just the performance of whatever specific team your customer is transacting with, but also how it affects how happy they are with your SaaS product.
Step 2: Categorize Your Respondents
Once you’ve gathered enough responses from your customers, you need to categorize them into three: Promoters, Passives, and Detractors.
Promoters are respondents who answer with a 9 or 10 in the NPS survey. Obviously, they are very happy with your SaaS product and are highly likely to recommend it to others.
What’s more, these are the people who can help grow your brand through positive word-of-mouth and may even become brand advocates soon.
Passives are customers who answer with a 7 or 8. They are mostly customers who are somewhat satisfied with your SaaS product but are not very enthusiastic about it.
They are not likely to churn soon. But if they see a better offer from one of your competitors, they may choose to switch to them instead.
Detractors are respondents who answer with a 6 or a lower rating. These are downright unhappy customers who are likely to churn any day now.
On top of that, they may even hurt your brand through negative word of mouth.
Step 3: Calculate Your NPS
Your final NPS score is simply the difference between your Promoters and Detractors.
You could arrive at a score as low as -100, if all of your customers are Detractors. Or you could get as high as +100, if all of them are Promoters.
Let’s get a sample calculation here. For example, imagine that you have 100 respondents to your NPS survey. Out of that 100, you get 50 Promoters, 30 Passives, and 20 Detractors. And that would give you a final NPS rating of 30.
Why Is NPS An Important Metric for B2B SaaS Businesses?
Today, NPS is one of the most popular and useful SaaS metrics not just among SaaS businesses, but other types of recurring revenue-based companies.
In fact, you’ve probably already encountered an NPS question from your internet service provider, phone service provider, or credit card company.
So why has NPS grown in popularity? Let’s talk about a few key reasons.
It Helps You Measure Customer Loyalty & Advocacy
We’ve already mentioned this a bit above, but let’s reiterate this key benefit of using NPS as a metric for your existing customers.
Having brand advocates among your customers can be one of the most powerful marketing tools there is.
Even just on their own, loyal customers will keep using your SaaS product for a long time, significantly adding to your customer lifetime value (CLV).
What’s more, they are also more likely to upgrade to more advanced (and more expensive) plans, thereby adding to your average revenue per user (ARPU).
But even more than all of that, they can also help spread the word about your SaaS product.
When they post about it on their social media feeds or talk about it with their friends and colleagues, it builds brand awareness.
So if they recommend it to other people and those people buy your product, you actually gain new customers just by keeping your existing ones happy.
Measuring your NPS can help you identify who these potential advocates are and measure how many there are in your customer base.
It Helps You Anticipate Customer Churn
NPS isn’t just about the happy customers, but also the disappointed ones. Detractors are very likely to churn soon, and it can bring significant losses to your recurring revenue.
Measuring your NPS can help you identify these customers and take measures to prevent them from churning.
More importantly, it also gives you the chance to do something about the Detractors’ impact on your brand.
Just as Promoters (or advocates) can help build up your brand, Detractors can also hurt it and discourage potential customers from signing up for your SaaS product.
It Helps You Identify Areas Of Improvement
Since NPS is a survey-based metric, it provides you with a huge opportunity to gather some useful customer feedback. That is, if you have the right follow-up questions in place.
You can ask your customers to explain why they gave their answers, and this can give you a better idea of what areas need improvement in your SaaS product.
This way, you can take steps that are actually relevant and effective in turning Detractors into Passives and Passives into Promoters.
B2B SaaS NPS Benchmarks
The entire process of measuring your NPS already gives you a lot of insights into how you can improve your SaaS product and make your customers happier. That much is clear.
But how can you know whether or not your NPS rating is good enough?
Well, that’s probably why you’re looking for B2B SaaS NPS benchmarks, right?
So what is a good NPS score for SaaS businesses? According to CustomerGauge, the average NPS score for the entire SaaS industry is +36.
Of course, the average NPS scores for B2B SaaS businesses can still vary depending on several factors, such as the size of the business, customer segment, product features, and more.
For instance, B2B SaaS companies catering to large enterprises also typically have lower NPS scores compared to those with small or mid-sized businesses (SMBs) as their customers.
This is because SMBs are generally easier to please. They usually don’t require the complex integrations and customizations that enterprise customers often demand.
On top of that, more mature SaaS companies tend to have higher NPS scores than younger SaaS companies because they have more practices in place to keep their customers happy.
For example, B2B SaaS businesses that have an established customer success team typically have happier customers.
Since they are better at proactively helping their customers reach their goals with the help of their SaaS product, their customers are more likely to be loyal and more likely to be advocates.
NPS Scores For Top-Performing B2B SaaS Companies
Since we’re talking about comparing your NPS score with the industry average, it’s also helpful to look at real-world B2B SaaS companies and how they are performing in terms of NPS.
Here are NPS scores for some of the top-performing SaaS companies in the world, as reported by CustomerGauge:
How To Improve Your NPS Score
Of course, you don’t stop at measuring your NPS score and stacking it up against the industry standard. You always have to aim for a higher one, especially if it falls below the SaaS industry benchmark.
So what can you do to improve your SaaS NPS?
Let’s go through some tips that may help.
1) Segment Your NPS Survey Respondents
One approach you can do to improve your NPS score is to look at your current responses, analyze trends, and use that data to improve customer experience.
And one of the most insightful ways to analyze your data is segmenting your respondents. And I’m not just talking about the promoters-passives-detractors groupings.
You may also need to segment your customers based on their answers to your follow-up questions. This way, you can better understand their individual complaints and needs.
Below are some ideas on how you can segment your NPS survey respondents:
Segmentation By Firmographics
This type of segmentation involves grouping your respondents based on various firmographic classifications, such as their industry, company size, location, and many other possible factors.
If you’re offering a horizontal SaaS solution (meaning your SaaS product can be used by companies in any industry, not any specific one), you may need to segment your respondents based on industry.
For example, let’s say you notice a trend that more tech-oriented companies (such as telecommunications, eCommerce, or software firms) tend to give higher NPS scores than other companies that may not be as tech-savvy (such as retail and manufacturing companies).
That may be an indication that your SaaS product needs to be more user-friendly for the latter group of companies.
Or for instance, you may notice that most companies in a particular country often give your low NPS scores. That may signify some server issues or other location-specific issues that you need to look into.
Segmentation By Product Usage
Another way you can segment your respondents is by product usage. This means grouping them based on their usage of the various features and capabilities of your SaaS product.
For example, let’s say you have a customer relationship management (CRM) solution. You could group customers who are using your email automation feature separately from those who are utilizing the lead management part of the system.
That way, you can see which aspects of your SaaS product need to be prioritized when it comes to improving the customer experience.
2) Prioritize Helping Your Detractors
As we have mentioned earlier, your Detractors may churn any day now and can even do a lot of damage to your brand through negative word of mouth.
That’s why it’s important — nay, urgent — to provide them with the best help you can offer.
Let’s talk about some specific steps on how you can do that.
Offer Personalized Help Based On Their Product Usage
As you’ve seen from the segmentation tips above, it’s important to look at how a customer is using your product in order to provide them with personalized help.
You can do that by monitoring their in-app behavior. Equipped with that data, you can pinpoint exactly where they tend to get stuck and what kind of help they need.
Provide Live Assistance From Skilled Agents
Your detractors likely really need some quick resolutions to their issues. That’s why having live assistance from skilled agents on hand is always helpful.
By having someone they can talk to instantly, they won’t be left feeling helpless until tomorrow or the next week when you finally get back to them.
Make Sure This Process Is Replicable
If you want to maintain or attain a good NPS score, you need to make sure that your process in helping Detractors is repeatable.
You can’t just help one customer and expect everyone else to be happy. You need a system in place that will consistently ensure all of your customers receive the same level of service and assistance no matter who they are or what particular issue they have with your SaaS product.
3) Provide Excellent Customer Service
At its very core, improving your NPS score isn’t just about merely improving your NPS score. Remember that it is just a metric, which means it is a measure of something.
And for NPS, that “something” boils down to two simple factors: customer satisfaction and advocacy.
In other words, if you want to improve NPS at its very core, then you need to work on making sure that your customers are satisfied and are passionate about your SaaS product.
And one of the major aspects of a B2B SaaS company that best contributes to customer satisfaction is its technical support or customer service.
How do you make sure that your customer support department does what it’s supposed to? Here are a few tips:
Use Multiple Customer Service Channels
Your customers should be able to get in touch with your customer support team as quickly and as conveniently as possible.
This means that you need to offer multiple channels to reach them. That may include email (which is the most common), live chat, phone, and social media.
On top of that, you also need to make sure that all of your customer service reps are trained in communicating through these different channels and can provide help through them.
Keep Waiting Times To A Minimum
Nobody likes to wait around for an answer, especially when they have a serious issue that needs to be resolved.
That’s why you need to make sure your customer support reps get back to customers as quickly as possible.
You should have clearly defined response times and use a system that reminds agents about tickets if they go unresponded for too long.
Create A Knowledge Base
Excellent customer service doesn’t always necessarily mean answering customers’ queries.
You can also provide them with the knowledge they need to solve their issues even without talking to a customer support representative.
This is especially helpful for recurring issues that pop up multiple times a month — such as data synchronization issues, downtimes, and minor glitches.
Creating a comprehensive knowledge base helps answer these kinds of FAQs quickly and efficiently, while still providing customers with the information they need.
4) Offer Proactive Customer Success Services
Good customer support is great, but not if all you do is react to the customers’ problems. That’s why it’s important to offer proactive customer success services as well.
This means that you should focus on preventing issues from arising in the first place by providing your customers with helpful tips and advice on how they can get the most out of your B2B SaaS product.
How? Here are a few tips:
Provide A Thorough and Easy-To-Follow Onboarding Process
Onboarding is an important part of the B2B SaaS customer experience. After all, it’s what helps your customers understand how to use your product and get the most out of it.
If you want to ensure an excellent user experience for all of your customers, you need to make sure that your onboarding process is thorough and easy to follow. You can use videos, articles, and even interactive content as tutorial materials.
That way, customers won’t have any problems understanding how to use your product or run into any technical issues during onboarding.
Map Out Achievable Steps To Your Customers’ Goals
Customer success is all about helping your customers reach their goals with the help of your SaaS product.
That’s why you also need to know what each customer’s goal is and plot specific steps or shorter-term goals that would lead them to achieve those goals.
For example, let’s say you have a CRM software solution and your customer’s goal is to increase their sales conversion rates by a particular multiple.
One small step toward that goal could be to improve lead qualification. So, your customer success team might need to help that customer make the most out of your lead scoring tools.
Another step could be to reduce the number of leads that fall through the cracks in their sales pipeline. With that goal in mind, your team could teach them how to use reminders and alerts to help them make sure that all of their leads are being nurtured.
Whatever your customer’s goal is, break them down into smaller, achievable steps that your customer success team can help them with.
5) Nurture Community-Led Growth
One of the rising trends today when it comes to fostering customer satisfaction, loyalty, and advocacy is community-led growth.
With an online community, you can build relationships with your customers and engage in conversations with them. This helps create an environment of trust and understanding between you and your users, which can then be leveraged to drive customer loyalty and advocacy.
And as they become passionate advocates for your SaaS product, they will eventually bring in others (friends and colleagues) as new customers.
So how do you drive community-led growth for your B2B SaaS company? Here are some pointers:
Pick The Right Community Platform
One crucial thing to consider is where to set up your SaaS community. You need to choose a platform that is user-friendly and familiar to your target customers. What’s more, it should have the necessary features to reach your goals.
A safe choice would be Facebook Groups. Everybody is using Facebook nowadays. So going into your group page would just be one click (or tap) away from their usual social media browsing. Not to mention that new posts would appear on their news feeds as well.
Discord is a more exclusive platform, but it could be helpful if you have an established customer base already. It will also help you set up different conversation channels for different purposes.
For example, one channel could be for peer-to-peer support. Another could be for product update announcements. And so on.
Whatever community platform you choose, make sure that it is intuitive for your community members and that it helps you achieve your goals.
Start Conversations By Posting Content Regularly
The key to strong relationships is communication. So if you want to build strong relationships with your customers, then you need to communicate with them frequently.
However, businessmen and professionals don’t really talk to their SaaS solution providers as a part of their daily routine.
So how do you do it?
By consistently sharing fresh and engaging content.
One of the best ways to do this is to share thought-provoking blog posts or videos.
Not only does this encourage discussion among your community members. It also shows that you are an expert in your field.
What’s more, you can also ask your community members for their opinions on certain topics or product updates. This will help foster a sense of inclusion and involvement among them.
You may also share the occasional meme now and then. A bit of humor also does wonders in building relationships.
Just make sure your memes are actually funny. Otherwise, your customers would see you as a purveyor of cringe-y posts.
Provide Opportunities To Influence Brand Decisions
Perhaps one of the most powerful ways to encourage customer advocacy is to give your customers the power to influence brand decisions.
This could be as simple as launching an online survey or asking your community members to provide feedback on a certain product update.
Or it can be something more involved such as setting up a customer-led focus group to discuss a new feature or rebrand.
The goal here is to make them feel like they are part of the decision-making process and that their voices are being heard.
What’s more, it will give them a sense of ownership over the product as well.
For example, imagine that you rolled out a new feature that some of your customers and community members suggested. They’ll be saying to their friends and colleagues, “I helped make that happen.”
And that can be a pretty nifty way of getting those friends and colleagues to learn about (and even try out) your SaaS solution.
If you let your customers have a say in brand decisions, then you’ll soon find yourself with loyal customers who will not only stick with your SaaS product in the long run but also passionately recommend it to their friends and colleagues.
Final Thoughts About B2B SaaS NPS Benchmarks
The net promoter score is one of the most important metrics for B2B companies today, especially for SaaS. It can even be crucial to improving customer satisfaction, loyalty, and advocacy.
But sometimes, it’s not enough to measure your NPS score on its own. You also have to measure it against industry standards and compare it with the most successful B2B SaaS companies in the world.
Whether or not you meet the industry standard, you should always seek to improve it. And that is a matter of improving customer experience, leading to customer loyalty and advocacy.
Looking for more guides to help you grow your SaaS business? Check out our blog site here.