Net Promoter Score (NPS) is a customer loyalty metric used to measure how likely customers are to recommend a company, product, or service to others. It is based on a single question: “How likely are you to recommend us to a friend or colleague?” Customers respond on a scale from 0 to 10, and based on their rating, they are categorized into three groups: Promoters (9–10), Passives (7–8), and Detractors (0–6).
The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. The result is a score between -100 and +100. A positive score indicates more promoters than detractors, while a negative score suggests customer dissatisfaction. Companies often benchmark their NPS against industry averages to understand how they perform relative to competitors.
For subscription-based businesses, NPS serves as an essential performance indicator because customer retention and advocacy directly affect recurring revenue. A high NPS in a subscription model can mean lower churn, stronger customer lifetime value (CLV), and more organic growth through referrals. Conversely, a low NPS may highlight friction points in onboarding, pricing, customer service, or product quality.
Unlike traditional satisfaction surveys, NPS focuses on emotional loyalty rather than transactional satisfaction. This makes it a valuable tool for identifying long-term relationships and predicting subscription renewals. Many SaaS and membership-based companies integrate NPS tracking into their customer success workflows, using it to trigger follow-up actions when scores drop or when promoters are ready to share testimonials.
Interpreting NPS is not just about the score itself but also about the feedback behind it. The open-ended follow-up question (“What is the reason for your score?”) offers qualitative insights that help pinpoint the drivers of loyalty or dissatisfaction. Subscription businesses can use this feedback to improve onboarding experiences, refine pricing tiers, or enhance customer support.
Another strength of NPS lies in its simplicity and scalability. It can be measured at various stages of the customer journey: after onboarding, following support interactions, or periodically to gauge overall sentiment. Over time, tracking NPS trends helps a company understand whether changes in product strategy or service delivery are positively influencing customer perception.
When combined with other subscription metrics such as churn rate, Net Revenue Retention (NRR), and Monthly Recurring Revenue (MRR), NPS provides a more complete picture of business health. It aligns customer sentiment with financial performance, making it easier for leadership teams to link customer experience initiatives to measurable outcomes.
Ultimately, Net Promoter Score is not just a number but a strategic framework for continuous improvement. By embedding NPS into the culture of a subscription business, companies can build stronger relationships, reduce churn, and foster growth through genuine customer advocacy.
