What is a Good Net Promoter Score to Have?

Is there a good and bad NPS* score?

What is a good Net Promoter score to have?

Isn’t NPS just a number? What can it tell about my chances?

How good should an NPS be to call oneself successful?

Do you harbor similar questions? Or are you puzzled by what your NPS means to your business? Fret not, for you are not the only one! In this blog post, we’ll guide you through this seemingly baffling concept (it’s not in reality, I promise) and discover what your NPS tells about your business.

“It’s not the score that matters; it’s what you do with it to make Promoters that really counts.”

— Fred Reichheld, Bain & Company

Let’s start at the beginning. As a simple metric that illuminates your customer loyalty towards your brand, NPS is an intimidating concept. You might already know that NPS score can range anywhere between -100 to 100.

At -100, every one of your customer is a Detractor, meaning they are very unhappy with your services and wouldn’t recommend you to anyone else. I winced typing that!

On the other hand, a perfect score of +100 would mean that all your customers, every last one of them, are happy and find your product/service highly recommendable. Before you get your hopes up, let me remind you that such a scenario happens only in Utopia. Anyway, the number you scored in the NPS scale sheds light on if you are already at the top of your game, or if there is plenty of room for you to improve.

Are you still yet to calculate your NPS score? Use this Free NPS calculator to discover where your company stands in the grand scheme of things.

Is Your Score a Negative? Ouch!

A negative score means that your brand has more unhappy customers and negative word-of-mouth than people who enjoyed the experience you offered. It can’t be good.

A negative NPS shows that you are neck deep in trouble. Something, if not everything, is going wrong and things demand to be fixed if you plan to survive. A negative NPS shouldn’t be dismissed at any cost, or you’ll make the fatal mistake of not realizing how dire the situation is for you.

However, there are certain industries, which, by nature, is destined to create more unhappy customers than the happy ones and still manage to sail smoothly. For instance, in an experiment by Net Presidential Score, they used NPS to measure the sentiment of the voters towards each US presidential candidate. Interestingly, both Hillary Clinton and Donald Trump scored well below zero. Ironically, even a negative NPS score can be considered ‘good’ in politics!

Is it Above 0? Good for You Then!

This means you have more Promoters, i.e., customers willing to advocate your brand than those who’d readily ruin your prospects. You are not in a bad place to start.

Based on the global NPS standards, however, any score above 0 would be considered “good”, with 50 and above classified as excellent, and 70 or higher as world-class.

While any positive score can be considered good, what particular score can be deemed good enough for your company? NPS is a powerful growth indicator; we can all agree. And a positive score is encouraging news since you were given more thumbs-ups than boos.

Does a Really Good NPS Even Exist?

There is no definite score which is considered perfect. Prominent, high-growth companies from the US such as Amazon, Harley-Davidson, Zappos, Costco and Dell, generally attain NPS efficiency ratings of 50–80. However, according to Bain & Co, a Net Promoter Score of 5 to 10 is the average for most companies — their unhappy customers are just as many as their happy customers.

But then, the average NPS varies within industries as well. For instance, the average NPS score for a property management company is -3. Which means that by winning over even one more Promoter than the Detractors is already beating the average for a company in this industry. It is important to emphasize that there isn’t a certain number to look up to because it varies from business to business and industry to industry.

A good NPS score is not an altogether elusive concept though. A really good NPS score is when you’ve scored higher in your recent survey as compared to the last one. No matter which industry your company belongs, you can still aspire for the ultimate score of 100, as long as you understand that it isn’t a realistic goal- not just for your company, but for every other business in the planet.

Have You Contextualized Your Score?

NPS, while an important metric, wouldn’t mean anything until you contextualize and analyze it. You can contextualize your NPS with the absolute method or the relative method. The absolute method involves comparing your score to a loosely agreed upon standard for what a good score is, across all industries. The relative method involves comparing your score to other companies within your industry.

Absolute scores are hard to make use of, since there are vital differences across industries, regions, customer segments, and such. We recommend that you choose the relative method and analyze your score in the context of other companies of the same category.

How Good is Your Competitor’s NPS Score?

We’ve seen how dramatically different the average NPS score can be from industry to industry. The most popular way of determining an ideal NPS score is to compare yours with that of your competitors. NPS is a comparison to your peers, an indicator of your triumph, and a way to gain insights into where your business needs to go from here.

Let’s say you are an immigration company. The average NPS of your industry will be very different from the average score in the hospitality industry. The golden rule is to look at how well your competitors score and use that as a benchmark to see how you stack up.

You’ll thus have a clearer idea of where you stand and what your aspired score ought to be.

Is Your NPS Growing?

The Net Promoter Score by itself is largely meaningless unless you work on improving it.

It is a highly valuable piece of information because it permits a company to understand their place in their industry as a whole, rather than just their own credibility in a void. But NPS surveys shouldn’t be a one-time investment.

NPS illuminates the areas that you need to focus on to deliver a better customer experience. NPS surveys should regularly be run to assess the changes in your customer experience. Are you better off than the last score you received? Or have you lost your edge?

A growing NPS is always a good NPS. Compete with your peers and compete with your own last score to get better at what you do.

How Often Do You ‘Close the Loop’?

Perhaps this is the most critical of questions that should be asked when NPS is being discussed. How often do you ‘close the loop’? Do you let your customer feedback disappear into a black hole?

The process of following-up with your customers about their feedback is nicknamed ‘closing the loop’. Closing the loop involves acknowledging customer feedback, probing into the problem, fixing it, and letting the customer know that you have addressed their concern. It is about valuing the customer input and making it known that you care about their opinion.

There is a chunk of Detractors in your NPS surveys that are very pliable and only a few degrees away from becoming a satisfied customer. Your job is to identify them and optimize the opportunity.

Bottomline: The Net Promoter System is meant to fuel continuous improvement. Dismiss it as a one-time query, and you’ll be turning away from a goldmine of information. Look on your NPS score as a valuable piece of information about your company. Follow up, follow up, follow up!

Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

Originally published at surveysparrow.com on April 7, 2018.




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