Net Promoter Score
NPS
A measure of customer loyalty calculated by asking users how likely they are to recommend the product on a 0 to 10 scale. Respondents are grouped into Promoters (9–10), Passives (7–8), and Detractors (0–6). NPS = % Promoters minus % Detractors. It is a leading indicator of retention, expansion revenue, and word-of-mouth growth.
How Net Promoter Score works in practice
Net Promoter Score matters most when teams are trying to make better decisions around subscription growth, activation, retention, expansion, and revenue efficiency. The short definition gives the surface meaning, but the practical value comes from knowing when this concept should actually influence strategy and when it should not.
In real-world work, Net Promoter Score is rarely important on its own. It usually becomes useful when paired with cleaner measurement, stronger page or funnel structure, and a clear understanding of what business outcome needs to improve. It is closely connected to Churn Rate, Net Revenue Retention, Customer Health Score because those concepts usually shape how Net Promoter Score is measured or applied in practice.
A good way to use Net Promoter Score is to treat it as a decision aid rather than a vanity number. If it helps explain why performance is improving, stalling, or getting more expensive, it is useful. If it is being tracked without any operational consequence, it is probably being overvalued.
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Let's talk →This term sits in the SaaS category, which means it is most useful when evaluating subscription growth, activation, retention, expansion, and revenue efficiency. The goal is not to memorize the label. The goal is to know when it should change a decision, a page, a campaign, or a measurement setup.
Related terms
The percentage of customers who cancel or do not renew within a given period. High churn erodes MRR growth and increases CAC payback period, making retention optimisation as important as acquisition for sustainable growth.
The percentage of recurring revenue retained from an existing customer cohort over a period, including expansion from upsells and cross-sells, minus churn and contraction. NRR > 100% means the business grows revenue from its existing customer base without any new customer acquisition. Companies with NRR above 120% typically command premium SaaS valuation multiples.
A composite metric used to estimate retention or expansion likelihood for an account.
Revenue generated from existing customers through upsells, cross-sells, seat additions, or usage increases — as opposed to new customer acquisition. Expansion revenue carries near-zero CAC and is the most capital-efficient growth lever in SaaS. When expansion MRR exceeds churned MRR the business achieves negative net churn, growing revenue without increasing customer count.
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