A company’s success can be impacted by the power of a deceptively simple question: How likely is it that you would recommend [Company X]? The responses to this singular question are the basis for a business’ Net Promoter Score (NPS), a quantifiable method of measuring and tracking customer satisfaction through a basic survey identifying its promoters and detractors. In fact, 45% of US companies use the NPS to measure their customers’ loyalty.
The popular scoring metric offers a broad overview of any company’s overall customer satisfaction, providing opportunity for growth in both loyalty and revenue. Below, we discuss exactly what is a good NPS score, how you can measure against industry benchmarks, and suggest ways to improve your NPS score to better address customer pain points.
How is NPS Score Calculated?
The NPS is calculated by dividing customers into three distinct identities based on their willingness to recommend a company on a scale of 0–10 (with 10 being most likely to recommend). Promoters respond with 9–10, passives with 7–8, and detractors with 0–6.
The final score is found by subtracting the percentage of detractors from the percentage of promoters, giving you a score on a scale of -100 to 100. It’s interesting to note that passives are considered neutral and thus are not a part of the NPS equation. “Perfect” scores of -100 (100% detractors) or 100 (100% promoters) are nearly impossible, as we all know you can’t make everyone happy (or unhappy) all of the time. Calculate your own score quickly with our NPS Calculator.
What is a Good NPS Score?
In a perfect world, we could give you one hard target number you should aim for as a good NPS. The reality is that defining a good net promoter score is not as straightforward as it may seem. It’s always best if your NPS is over 0, because anything in the negative range indicates that you have more frustrated customers than happy ones. However, gauging the quality of your NPS is really all about comparison—to your industry average, to your competitors, and to your previous scores.
What is a good score, on the NPS scale of -100 to 100? (NOTE: These ranges are broad estimates, as a “good NPS” is better determined by industry and location comparisons).
- Over 70 = Excellent top-tier customer loyalty
- 30-70 = Very good with high ratio of happier customers
- 0-29 = Good but still room for improvement
- Below 0 = Poor and needs urgent improvement
In broad terms, net promoter scores can be broken up into four general ranges:
- Below 0: Any negative number shows that you have more detractors than promoters, indicating your customer experience performance needs urgent improvement.- 0–30: Being above 0 is a good place to be, and reveals that you have more promoters than detractors. Companies in this range should feel positive about their position, but recognize they should actively be working to continually improve customer service.- 30–70: A score in this range is a strong-showing, with a good base of loyal and happy customers. This is the range to strive for overall.- Over 70: The love for your company is tangible and reflects the power of promoters’ positive word-of-mouth referrals, leading to faster growth and increased revenue.
Keep in mind that some industries have an average NPS that never passes 20, so knowing your industry benchmarks is an important factor to judging where you fall on the scale of -100 to 100. You should think about your business’ NPS as a competition against yourself—always competing to improve your latest score over your previous score. Context is key in truly understanding your NPS and what it says about your company.
Why Do Benchmarks Affect Your NPS Score?
Your business does not operate in a vacuum. Unsurprisingly, the true value of the net promoter score cannot be fully achieved without understanding multiple contextual factors that surround your rating.
- Industry: Knowing the average NPS of your industry serves as a valuable benchmark in understanding your own NPS. Some industries, such as internet service (NPS 2) and health insurance (NPS 18) have low benchmarks. So, if you’re an internet service provider with a score of -4, you’re actually not ranking far from the industry average even though you’re in the negative.
- Geography: The location of your customer base can be an important factor. Customer sentiment in some parts of the world tends to be more conservative or reserved. Many European and Asian countries produce scores that lean toward the lower range, as effusive praise can be seen as a negative. Americans, on the other hand, are known for providing typically higher scores than the rest of the world.
- Niche Targets: If yours is a niche customer base, keep in mind that their expectations may differ from those of the general market. Your survey respondents might be more engaged and provide more detailed feedback if you’re targeting educators as opposed to targeting accountants.
- Survey Channels: Consider which feedback channels you’re using to conduct your surveys: email, SMS, in-app? The method(s) you use can also impact the engagement of your customers based on how much time they’re willing to invest on their device.
What Happens If You Have a Negative NPS Score?
If you are faced with a negative NPS, it’s time to acknowledge that you have work to do. Criticism is never fun to receive, but it can hold tremendous value. Your customers have now given you direct communication of their overall frustration with the customer experience they’ve received and you must take action to help your business improve.
Take the time to dive into the specifics of the comments you’ve collected to determine your biggest trouble spots. Then, review your current practices and reevaluate how you can adjust them to better serve your customers. Know that changing the minds of customers can take time, but consistent efforts to address and improve the targeted problem areas can help your NPS grow.
How Can You Improve Your NPS Score?
Once your company’s current NPS score has been determined, it’s time to take action to help your score move upward. No matter what score you’ve earned—it could be -14, 56, or 90—you should always strive to improve your NPS, as it is one of the top customer satisfaction metrics you should be tracking to best support your enterprise. Below are just a few of the strategies you can put in place to grow your score.
1. Position NPS Surveys Where They Have Impact
To maximize your response rate for NPS surveys, provide multiple feedback channels. Think about where and how you offer your NPS surveys. Consider trying transactional NPS (TNPS)surveys, which are sent directly after a customer interacts with a business. Also, In-app outreach tends to receive higher response rates, but email engagement often leads to deeper feedback that explains their scoring choice. Keep in mind, the more insight you receive from your customers, the more you can drill down to the specifics of what areas need improvement.
2. Analyze Promoters and Detractors
Understanding the insights offered by your biggest fans - your promoters - is critical to making them feel heard and valued. Not every promoter offers 100% positive comments, so it’s critical to listen to their thoughts to keep them as your cheerleader. And while receiving critical feedback is never fun, knowing the “why” behind your detractors’ opinions offers opportunities for improvement and potential for converting them into promoters.
3. Track and React to Customer Feedback
One simple NPS survey will not provide enough data to help your business. It’s important to conduct surveys regularly to continually track your customer service performance. When updating your data analysis with each survey, it’s important to determine the actionable themes and details that need work. Reviewing the nuances of what made the promoters’ experiences positive and what issues the detractors experienced will allow for a more thorough understanding of each customer’s experience.
4. Encourage Internal Buy-In
Make sure that each of your employees understands that their performance can impact the customer experience, even if they never engage directly with a customer. Train them to consider the ripple effect of their personal impact on each customer, empowering them to adjust their own choices to best benefit the customer and the company.
5. Empower Customer-Facing Employees
A single bad customer experience can transform a promoter to a detractor, so efforts to ensure the quickest and most effective customer service have a direct impact on your NPS. Providing your customer-facing team with useful informational resources and investing in top notch training to meet every customer’s needs will set them up for success.
Which Companies Have Good NPS Scores?
Customer experience statistics like the NPS are critical to building and maintaining a thriving business. Companies big and small can benefit from studying the examples of the high scorers below.
TeslaNPS Score = 96A whopping 91% of Tesla owners said they would buy from Tesla again, indicating the strength of customer loyalty reflected by this impressive NPS.
CostcoNPS Score = 79Costco’s membership-based structure is well-served by its high NPS, achieved through reliable products and pricing, fast services, and happy employees providing top-notch customer service.
StarbucksNPS Score = 77The reliability of quality and consistent customer service combined with a loyalty program that is used by a large share of their customers is illustrated by Starbucks’ score.
NetflixNPS Score = 68Customer loyalty is so strong at Netflix that 80% of their subscribers do not use any other additional streaming services.
AmazonNPS Score = 62Single sign-on services, simple and efficient customer service resolutions, and access to free shipping through their paid Prime memberships make Amazon a reliable high-scorer.
Understanding your net promoter score is a valuable asset in strategizing your company’s future because customer loyalty can make or break you. But the score alone is not the answer. Above all else, context is key when evaluating your NPS results.
Following up with action on the customer feedback you receive shows your customers, no matter where they stand on the NPS scale, that they matter and are being heard - which is what most customers want to feel. And with the goal of the mystical perfect 100 NPS in front of you, there’s always more work that can be done to move your company toward that mark.
