What is NPS

What is a good Net Promoter Score?

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A net promoter scale can help you figure the customer loyalty. An NPS is an effective strategy to measure how much, your customers, clients, and employees are satisfied with your company’s service.

The best example of NPS is when you ask your customers “How likely you are to recommend our service to a friend?” The customers receive a scale of 0-10 ranging from least to most. 

After the result from the survey comes back, you can then segment the result into three group promoters, passives and detractors.

The NPS is crucial for the fact that it gives you an insight into how receptive and satisfied your customers are with your company’s product or service. The customers have the power of making or breaking a company’s success. So, tracking how happy they are can be beneficial to strategize the company’s game plan.


What is a good NPS Score? : NPS trend 2020

As per the data by Satmetrix NPS data benchmark there has been a decline in NPS score, for only 12 out of 23 industries.

 Cable and Satellite TV and Internet Service are at the bottom of the list with a score of 7 and 2 respectively. However, it is a temporary spike on the overall performance analysis.

Health Insurance and Smartphones are the only two sectors that witnessed an increase in score.

  • Health Insurance – 18
  • Smartphones – 38

Department and Specialty Stores, Tablet Computers, and Investments have the highest score in the order of 58, 47, and 45 respectively.

Some other NPS scores are

  • Airlines – 35
  • Banking – 35
  • Online Shopping – 39
  • Hotels – 39
  • Home/Contents Insurance – 42
What is NPS

Good NPS Score

NPS can be low as -100 or high as + 100. So, the question of how to understand how satisfied your customers are and how much you need to improve.

  • 0 to 30: If your score is between 0 and 30, then the service you provide has room for improvement. The range is better than being in a negative score. 
  • Over 30: The score above 30 shows that the performance of your company is great. Though there are still some customers who are unhappy with the service or product your company provides. 
  • Over 70: If your score is above 70 it means that your company is well-liked by your target audience. The customers provide positive feedback and are most likely referring your company to other people. As a result, your company has a higher chance of new leads and more ROI.

However, the NPS also heavily depends on the niche. A score of -10 may be higher for some niche or other. However, the score definitely leaves a huge room for improvement.

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    Calculate Net Promoter Score

    To calculate the obtained NPS score you can use the following formulas

    %of Promoters – % of Detractor = NPS                

    There are three categories of customers based on how they rate. These are Promoters, Passives, and Detractors, as mentioned above.

    • Promoters: 9 -10

    They are customers who love the service or product your company provides. They are of high value because such loyal customers help the company move toward success. These high-ranking customers are also promoting your company in their social circle.

    • Passive: 7-8

    The customers of this segment are comparatively satisfied with your company. They may stay with your company. They may go to whichever company provides better service. It is difficult to turn them into loyal customers but certainly would benefit the company.

    • Detractors: 0-6

    These customers are highly unhappy with your company. They do not positively promote your company. They may ruin the reputation of your company and its service by spreading negative reviews to their peers.

    No business can expect to have completely satisfied customers. You cannot change the perspective of every individual detractor. Nor can you completely comprehend their point of view. However, NPS gives you an idea of what you may need to change or improve about your company.


    Example of NPS across various Industries

    To get a better understanding let’s look at companies with best NPS

    1. Costco: 74
    2. Southwest Airlines: 71
    3. Apple: 68
    4. Vanguard: 65
    5. American Express: 55

    Benchmark of NPS

    According to the global benchmark with an NPS range of -100 to +100, a score above 0 is good for any company. It means that you have loyal customers.

    – Compare with other companies: For a better awareness about the success of your company’s strategies you may try assessing your competitor’s NPS and comparing those with your NPS. 

    Compare with the different regions: The scores are also affected by the geographic market. For instance, you may find that customers in your region tend to stay in the mid-section of the scale and not outright go for a high or low score. Customers from another region may stick to the lower end of the scale despite how satisfied they are. NPS may vary dramatically as it is subjective.

    – Use your NPS to compare: The better way is to thoroughly study your company’s past NPS record and compare them with the more recent report. If there is a decrease in the score then you can positively identify the issue and prepare for improvement. On the other hand, if the NPS increases then your company is doing a great job in keeping your customers satisfied.

    NPS is only a means to give you a clear picture of where your company needs improvement. Ultimately what your company needs to do is to analyze and listen to your customer’s feedback. Then to take positive action towards the main goal which is customer service.

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