What is a good net promoter score

Good Net Promoter Score: All you need to know!

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What is Net Promoter Score?

As you seek to improve your business and start to weigh business strategies to drive growth, you need to rely on certain customer experience metrics such as NPS. These metrics can tell you how your strategies are faring in the real world, and how your customer experience efforts are performing. A good Net promoter score is also an indicator of how your overall customer experience is doing.

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What is a good Net Promoter Score?

A high NPS essentially indicates that your brand or business has a higher percentage of customers who are loyal and can be considered advocates vs customers who are dissatisfied with your brand and are considered detractors. In this article we’ll be taking a look at how one can determine their NPS, and how to ensure your brand performs well in this metric.

Calculating Net Promoter Score

Calculating NPS

The Net promoter score helps measure customer loyalty towards your brand. It can be positive or negative, with a good Net Promoter Score being dependent on the industry or vertical your business is operating in. Respondents (they could be your employees or your customers) who give you a positive rating are likely to to recommend your brand to friends and colleagues in their social circle. 

Respondents who leave a negative rating are likely to stop engaging with your brand and discourage their social circle from doing the same, and will use their negative experience with your company as a tool to do so.

To calculate your NPS, you need to ask your respondents “How likely are you to recommend ‘company A/ product A/ brand A’ to a friend or a colleague?” 

Respondents can choose their answer from a scale of 0 to 10. 

Respondents who scored you between 9-10 are your promoters, who are likely to do positive word of mouth marketing on your behalf. 

Passives are those who scored you between 7-8. 

Respondents who left a rating between 0-6 are your detractors. 

You can also ask your respondent a follow up question, querying why they scored you as they did. 

To calculate your NPS, You need to get the % of respondents who are your promoters and subtract that with the % of respondents who are your detractors. 

Generally a positive result means you’ve got a good net promoter score. Negative scores imply that you have more detractors than promoters, and that you may need to make some changes in your organization or products or even both.

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What can you consider a good Net Promoter Score?

Once you’ve surveyed respondents and found out your NPS, you need to set an NPS goal. This goal should factor in your industry competition as well as generalized NPS Benchmarks. You must also benchmark against yourself after a set period of time has elapsed since your last NPS survey.

General NPS benchmarks

NPS scores range from -100 to 100, and a positive result is considered a good Net Promoter Score. A score over 50 can be taken as an excellent result, and one over 70 can be considered the gold standard. 

The same ranges apply for employee NPS or eNPS.

  • If your NPS is over 70, then you can consider your organization to be as customer centric as it can be. Your scores are far above the industry average and that your customers are loyal advocates for your brand.
  • An NPS over 50 implies that your customer experience and satisfaction levels are high, and your customers are mostly happy with your services.
  • If your NPS is below 0, it means that you have some work to do, and that your company should conduct customer experience and satisfaction surveys to find out where you’re going wrong.

A good Net Promoter Score ensures that your brand is likely to experience organic growth. Your customers are likely to refer you voluntarily to their social circle. 

Forrester research shows that companies which invest in customer centric policies display greater customer loyalty. 

Benchmarking NPS using your competitors

Although the NPS range mentioned above is a good indicator of where you need to stand, every industry or vertical has their own benchmark and average. This is a more effective benchmark for tracking your NPS, and will help understand what a good Taux de recommandation (NPS) is for your industry. 

By benchmarking against your industry competition, you also account for variations that are specific to your vertical or industry. Banks and other finance companies have traditionally fared poorly on customer experience metrics, which is why a financial institution should not be comparing its NPS with that of an FMCG brand. You can calculate, benchmark against industry competition and improve net promoter score here.

Global NPS standards versus benchmarking against competitors

You must also analyze your NPS with respect to global standards. In this case, you must keep in mind that NPS scores can vary with demographic and geographical locations. NPS scores in the USA would not work too well as a gauge for good net promoter scores in Europe. 

European customers tend to be more conservative with their ratings, and are less likely to dish out 9s and 10s.

Benchmarking against yourself

The most important competitor when benchmarking NPS is yourself! Whether you’re a new entrant to a particular industry, or looking to improve on certain products or aspects of your business, you need to benchmark against yourself at regular intervals. 

Typically you should measure progress by comparing against your previous NPS scores from the last 6 months or the last quarter. If your NPS ratings are stagnant or showing a downward trend, you must make changes in operations by implementing customer feedback.

Effectively using NPS

Net promoter scores help get an understanding into how your customers perceive your brand, and whether they would be loyal advocates or detractors. NPS surveys are versatile and can be implemented at several touchpoints. You can send NPS surveys after customer interactions with your products, or via email after a transaction or even after an interaction with your customer service. 

Continuously collecting NPS feedback data will help uncover insights that can be pivotal for product improvement and inculcate brand loyalty.

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