7 Reasons every SaaS needs to start measuring NPS


7 Reasons every SaaS needs to start measuring NPS

Luca MicheliFeb 14, 2019

Customers are the backbone of every successful business. Therefore, customer experience is important. When you take care of your customers, it can increase your revenue. A study carried out revealed that 55% of consumers are willing to pay more for a guaranteed good experience.  The question is, how do you measure customer experience?  One way is to measure your Net Promoter Score (NPS). Measuring NPS is a task every SaaS business owners should do on a regular basis.

In this article, you will learn about:

  • The seven reasons why you need to start measuring NPS
  • How to measure NPS
  • The tool you need to measure NPS.

But first, let’s start with the definition of NPS.

Let’s get started!

What is the Net Promoter Score?

Net promoter score (NPS) is a tool used to measure customers’ willingness to recommend a product to friends or colleagues.

It is important because it helps you to measure your customers’ pulse. It shows how well your brand is performing and helps to discover your loyal customers. No wonder  45% of the number of respondents surveyed in a report choose NPS as their customer experience of choice.

Measuring NPS

Now, you know what Net Promoter Score is, the next question is: How do you calculate NPS?

How to calculate NPS?

Calculating NPS is easier than you think. After you have sent the survey question to your participants, your answers are broken down into 3 parts. They are:

Measuring NPS
  • Detractors:  These are unhappy customers
  • Passives:     These are customers who are satisfied with your product but do not show they love it.
  • Promoters:  These are customers who are satisfied and love your product.  They are a group of customers that will readily recommend your product to others around them.

The formula for calculating the Net Promoter Score:  Detractors – Promotes = NPS

Let’s move on to know the reasons you need to measure NPS.

Why do you need to measure NPS?

There are several things you need to measure in order to know the health of your business and the pulse of your customers. However, the most important metrics you should pay attention to is the Net Promoter Score.

Want to know why?

Check it out the 7 reasons below:

1.   Measuring NPS will help you identify Product Market Fit and Areas of Product Improvement.

Product market fit is when your product satisfies the market you are in. Josh Porter defined the product market fit as “when people sell for you”.

No matter how new your product is in the market, measuring NPS will help you collect customer feedback. This will show you if your product is fit for the market you are in or not. Secondly, it will help to know which areas of your product need improvement.

Measuring NPS will help you know if your new update is working as it should. In other words, if your customers are giving you bad ratings because of your new updates, you will know and quickly rectify it before it has a negative effect on your business. This information is super useful. It will quickly show you what to do to make your product great for your customers.

Secondly, the reason you need to measure NPS is to “secure funding for your startups”.

2.   Measuring NPS can help you secure funding for your startup

You will agree with me that starting a business and sustaining it needs enormous capital.

According to Studies, over 50 percent of small business fail in the first four years. One reason given for the failure is lack of cash flow.

One way startup gets capital is through funding. However, getting funding is easier said than done. But one thing that can help you increase the chances of getting funding for your startup is measuring NPS. The truth is, investors are always on the look-out for the NPS score. It gives them an overview of your startup future success.

To buttress this, Jason M. Lemkin (An investor), opined that high NPS score is one of the greatest signs of a good investment.

This makes NPS a valuable tool in evaluating startups.

It does not matter if your startup is new or old, or whether you have 10 customers or 10,000 customers, you can still measure your NPS. Even if you don’t make enough money, for now, the good thing is that you have users who will be part of your business.

Thirdly, the reason you need to measure NPS is to “chart your product roadmap”.

3.   Measuring NPS will help you chart your product roadmap

A product roadmap helps you to choose the direction of your product. It spells out the why and what of your product. Similarly, a product map is very important to the success of your business because of it :

  • Describes your vision and strategy for the product
  • Guides your strategy execution
  • Gets your team in alignment
  • Helps you to create a better marketing message.

One way you can find out if you are on the right path is to measure the NPS. It will help you know how far you have gone in alignment with your business vision and strategy.

You cannot afford to guess wrong as it will lead to massive losses. Measuring NPS will help you know if you are doing the right things or not.

Fourthly, the reason you need to measure NPS is to “leverage promoters”.

4.   Measuring NPS helps you to leverage Promoters

As seen above, promoters are the customers that are satisfied and love your product. You can leverage them for more profits such as:

  • Ask them to refer more of their friends and colleagues
  • Upsell a new product package to them
  • Request for reviews and share their experience with your company.

For example, Agency Analytics leveraged on their promoters to enable them to get more positive reviews for their product. Consequently, this led to a lot of reviews for the company. Because of that, the reviews are bringing in new customers daily. It is not a difficult task. Moreover, this is what all businesses can do.

The fifth reason you need to measure NPS is to “forecast your revenue and growth”.

5.   Measuring NPS provides a forecast for revenue and growth.

Measuring NPS gives you an insight into your business revenue and growth. That means if you measure your NPS and it is high, it will lead to increase revenue and growth. This is because high NPS indicates that your business is getting more income through word of mouth and referrals. That is, the number of your promoters are high. This implies that the percentage of customers that will readily recommend you is increasing.

Frederick Reichheld in the Harvard Business Reviewed wrote that “the path to sustainable, profitable growth begins with creating more promoters and fewer detractors and making your net-promoter number transparent throughout your organization.”

To sum up, all you need is to constantly measure your NPS to ensure that the number of your promoters is constant and to do all you can to make it stay that way.

Moving on, the sixth reason you need to measure NPS is to “know your loyal customers”.

6.   Measuring NPS helps you to know your loyal customers

Customer loyalty is one thing that will make you succeed in your business venture. This is because loyal customers spend more. According to a report, 66% of US customers spend more on brands they are loyal to. Measuring NPS is one way to discover your loyal customers. They are “the promoters” that will recommend your product to friends and colleagues. In short, they are the type of people you need to make your business grow.

Lastly, the reason you need to measure NPS is to “know and solve customer issues”.

7.   Measuring NPS will help you know and solve customer issues

There are customers who will never complain about your product openly, but quietly, they will stop doing business with you. Measuring NPS will give you insight into the kinds of problems your customers are battling with regarding your product.

This will help you take the necessary steps to solve the problems and stop your customers from churning. As you get results from the NPS, address each customer’s issue personally. Above all, respond to every complaint from them and provide viable solutions.

Certainly, now you are ready to measure your NPS. How do you measure it?

How to measure NPS

There are many tools you can use to measure NPS. However, the best so far is Customerly NPS tool. So, if you have an account on customerly, follow the steps below. But if you don’t have an account, you can sign up here.

Let’s get started.

  1. Log in to your dashboard on Customerly and after that, click on “Start NPS
measuring NPS

2.  Click define your audience (this article explains how to define an audience). That is to say, specify the recipient of the NPS survey.

measuring NPS

3.  When you are done, click next.

Measuring NPS

4.  Meanwhile, select the time to deliver the emails to your contact and after that, click next.

measuring NPS

4.  Subsequently, press start now button to start the process

Measuring NPS

5.  Thereafter, check your NPS result (learn how to interpret the result here).


In addition to other metrics you should use to assess the health of your business and that of your customers, you need to measure your NPS. For instance, most big companies and startups have used it to improve their product and thus, make more money. In the same vein, you should measure your NPS today.

Luca Micheli

Luca Micheli

CEO @ Customerly

Luca Micheli is a serial tech entrepreneur with one exited company and a passion for bootstrap digital projects. He's passionate about helping companies to succeed with marketing and business development tips.

Share this article
Subscribe for monthly updates