Net Promoter Score (NPS)

Why it matters

For SaaS, the rough benchmarks are: around 30 is good, 50+ is excellent, and 70+ is rare territory. The founder trap is sample size: with 30 responses, one grumpy user moves the score several points, so an early-stage NPS number is mostly noise. Below roughly 100 responses, treat NPS as structured anecdote collection and mine the free-text follow-up, which is worth more than the number itself. NPS is also a lagging metric; retention and expansion revenue tell the same loyalty story with actual money attached. Use it for trend direction across quarters, not as a single number to put on a slide.

Formula

NPS = % promoters (scores 9-10) - % detractors (scores 0-6); passives (7-8) count only in the denominator

Worked example

You survey 50 users: 20 score 9-10, 18 score 7-8, and 12 score 0-6. NPS = 40% - 24% = 16. With only 50 responses the margin of error spans roughly 20 points in either direction, so the true score could plausibly be 0 or 35; the verbatim answers to the follow-up question are the real output.

Common mistakes

• Quoting NPS from under 100 responses as if it were signal; the margin of error can be larger than the score.
• Surveying only active users; churned and dormant users are the detractors you most need to hear from, and they never see the survey.
• Forgetting passives count in the denominator; they dilute the score even though they are ignored in the numerator.
• Chasing the number instead of reading the why; the free-text responses are the actionable part.

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