NPS (Net Promoter Score)
Net Promoter Score (NPS) is a customer loyalty metric based on a single question: 'How likely are you to recommend [product] to a friend or colleague?' on a scale of 0–10.
Formula
In depth
Respondents are categorized: - Promoters (9–10): loyal enthusiasts who will recommend and drive growth - Passives (7–8): satisfied but not enthusiastic — vulnerable to competitors - Detractors (0–6): unhappy customers who may damage your brand
NPS = % Promoters − % Detractors
NPS benchmarks by industry: - SaaS: 30–50 is good, 70+ is excellent - Consumer apps: 20–40 is typical - E-commerce: 45–60
NPS is useful for product-market fit detection. An NPS above 40 is a strong signal of PMF. Below 20 suggests significant product improvements needed.
NPS alone doesn't tell you WHY. Always follow up with 'What's the most important reason for your score?' to get actionable feedback.
Real example
100 survey responses: 55 Promoters (9–10), 25 Passives (7–8), 20 Detractors (0–6). NPS = 55% − 20% = 35. This is a decent score — focus on converting passives to promoters.
Tools & calculators
Related terms
MRR (Monthly Recurring Revenue)
Monthly Recurring Revenue (MRR) is the predictable, normalized monthly revenue generated from all active subscriptions. It's the north star metric for SaaS companies.
LTV (Lifetime Value)
Customer Lifetime Value (LTV or CLV) is the total predicted revenue you'll earn from a customer over the entire duration of your relationship.
Churn Rate
Churn rate is the percentage of customers (or revenue) that cancels or doesn't renew in a given time period. It's the single most important retention metric for subscription businesses.
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