Net Promoter Score (NPS) is one of the best ways to drive customer-focused change within your company. But what constitutes a good score? What influences your score? And how do you actually use your score to make improvements?
We’re covering everything you need to know about NPS scores, what qualifies as a good score within your specific industry, and how to use your score to your benefit.
Let’s get started.
- What is an NPS score?
- How is NPS score calculated?
- What is the average NPS score?
- What Is a Good NPS Score?
- Good NPS scores (by industry)
- What if I have a low NPS score?
- How to improve NPS score?
- How to use NPS score to improve business?
- How to analyze open-ended NPS feedback
- Use the right tools
What is an NPS score?
An NPS score is a market research metric that’s populated by asking customers to rate the likelihood they would recommend a company, product, or service to a friend, family member, or colleague on a scale from 1 to 10. The score is reflective of customer satisfaction with your business and their level of brand loyalty.
Respondents are broken down into three categories:
- Detractors: Those who give a rating of 0 to 6. Classified as unhappy customers who can threaten the growth of your company through negative reviews and word of mouth.
- Passives: Those who give a rating of 7 to 8. Classified as satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Promoters: Those who give a rating of 9 to 10. Classified as loyal customers who will help your company grow through referrals, positive reviews, and affirmative word of mouth.
How is an NPS score calculated?
NPS score is calculated by using the following formula:
NPS = % promoters – % detractors
The percentage of passives is not used in the NPS formula and the score is represented as a whole number that ranges from -100 to 100. For example, if 50% of respondents were promoters and 10% were detractors, your Net Promoter is a score of 40.
What is the average NPS score?
The average NPS score is +32. This number comes from SurveyMonkey’s global benchmark data which accounts for the NPS of over 150,000 organizations. 32 is the average NPS over multiple industries so it shouldn’t be used as the benchmark or target score for your business. Instead, find out what the average NPS score is for your specific industry and use that as your marker.
What Is a Good NPS Score?
A score below 0 indicates that improvement is needed and a score between 0 and 30 indicates that there is some opportunity for improvement. In our opinion, a “good” NPS score is one that is better than last month. Your NPS score should always be improving as you make efforts to improve your business and your customers’ experience.
While there are some common guidelines when it comes to a “good” NPS score, it’s important to know that a “good” NPS score depends more on your industry and how your NPS score measures up against the industry average.
For example, if you have an NPS score of 40, which by the standards outlined above is classified as “good”, but your industry’s average NPS score is 45, you’ll want to strive to boost your score up to 45 at a minimum and continue making improvements from there. Companies with NPS scores higher than their competition (industry average) grow faster and are more successful.
Industry is one of the largest influences on NPS score. A good NPS score in the SaaS industry is between 31 and 41; a good NPS score for B2B is 41; and a good NPS for B2C is 47.
We’ve Included more information on good NPS scores by industry below.
What is a good NPS score for SaaS?
A good NPS score for SaaS (Software as a Service) is upwards of 31. The SaaS industry average NPS score ranges between 31 and 41 depending on the year. Striving for an NPS score in the mid-30s would be considered “good” for the Saas industry; however, to stay ahead of the average, aiming for an NPS score in the 40s would set your SaaS company apart from the rest.
As an example, Google’s NPS score has ranged between 50 and 58, while YouTube’s NPS score has ranged between 31 and 49. An NPS in the 50s would be an excellent score for companies in the SaaS industry.
What is a good NPS score for B2B?
A good NPS score for B2B (Business to Business) is 41. This is the average of multiple industry averages within B2B (e.g. consulting, marketing, construction, logistics and transportation, etc.). The average NPS score for B2B ranges from 3 to 62 (with varying results each year).
Generally speaking, +30 is still an excellent NPS score for B2B whereas a score of +10 is par for the course. It should also be noted that negative Net Promoter Scores are not unusual, especially in B2B, and alarm bells shouldn’t necessarily be blaring if your NPS calculations come back with a negative number.
As an example, American Express Bank has an NPS of 52 while All State Insurance scores at 59—both very large companies with NPS scores on the higher end for the B2B industry.
What is a good NPS score for B2C?
A good NPS score for B2C (Business to Consumer) is 47. This is the average of multiple industry averages within B2C (e.g. insurance, financial services, eCommerce, retail, healthcare, etc.). The average NPS score for B2C ranges between 24 and 57 (with varying results each year).
Depending on your specific niche within B2C, a “good” score will be represented by a different number. For example, If you’re in the healthcare business, a good score is 38 or higher, based on industry benchmarks. But this number would be low for a financial services company because the industry average for that industry is 56.
As a frame of reference, let’s look at some well-known B2C businesses. Lululemon for example has had an NPS score that ranges between 30 and 40 depending on the time of year, while Starbucks hovers fairly consistently around 40 year-round.
What influences NPS scores?
Industry isn’t the only influence on NPS scores. In fact, there are plenty of deciding factors that play into your score. We’ve included some of the additional influences below:
- Customer support
- Survey method
Allow us to elaborate.
During their buyer journey, customers may reach out for help and support. This can take the form of a live chat on your website during purchase, a phone call to tech support during installation, or an email to the admin staff regarding an exchange or return. Whatever form your company’s customer support takes, this will be considered by the customer when they fill out their NPS survey.
Most people don’t like delivering bad news in person. If your NPS survey is conducted in-person or over the phone, chances are the customer might feel obligated to be polite and give a higher score than they would via email or SMS. If the survey is conducted more candidly, the customer may feel comfortable enough to give a more honest reply—and take it from us, you’ll want the honest replies because in the long run, they’re what will help grow and improve your business.
If an NPS survey is done anonymously—meaning the customer doesn’t have to attach their name or purchase information to the survey—they are more likely to give an honest review. When customers think their review may somehow be linked back to them, they’re more likely to skew their answers to be more polite (which doesn’t benefit your business in the long run).
NPS scores will vary based on your business’ location and more specifically, your customers’ location. This is mainly due to cultural differences that impact how the act of scoring is perceived.
NPS scores are typically higher in North America and Latin America where residents tend to give more enthusiastic (and higher) scores. Meanwhile, in places like Europe and Asia (specifically Japan), it’s more common to see mid-range scores on NPS surveys, even if the level of customer satisfaction is equivalent to customers in North America or Latin America. Results from the Middle East commonly fall somewhere between American scores and European/Asian scores.
Geographical locations should always be taken into consideration when collecting NPS scores—especially if you conduct your business internationally. When comparing to your industry averages, consider whether the industry is commonly local/national or international, and don’t get too hung up on the numbers; what’s important is continuous improvement through consideration and implementation of the open-ended feedback that’s collected with your NPS survey.
What if I have a low NPS score?
Don’t be discouraged by low NPS scores. If you spend too much time focusing on the numbers, you might miss out on what your customers are trying to tell you. Remember, as long as your score is better than last year, you’re on the right track.
If your score is trending downward year over year, we strongly recommend bringing in a third-party customer feedback analysis service to help you better understand what your customers are saying in their feedback and how to turn their input into actionable insights.
Whether you’re trending upwards or downwards, it’s important to consistently be analyzing NPS feedback and seeking out opportunities for improvement.
How to improve your NPS score
Companies can improve their NPS score by taking a few key steps:
- Take the complaints of detractors seriously. Follow up with them and work to fix the situation.
- Use survey feedback to improve processes and train staff. Really dig into why detractors wouldn’t recommend your company and why promoters would.
- Give your entire team a chance to engage with customers. The more they understand their impact on the customer, the more likely they are to modify their work to improve the customer experience (and thus the NPS score).
- Invest in your customer-facing employees. Prevent customer loss by building a five-star customer-facing team through quality training and relevant resources to improve their customer service experience.
These are just a few of the steps required to improve your NPS score. Idiomatic has worked with major companies to improve their NPS scores. For example, we helped Pinterest improve their Net Promoter Score by 10% by helping their product team ensure their solutions are meaningful to their customers by basing them on the “why” behind customer feedback.
How to use your NPS score to improve your business
Don’t just tally up your NPS score, compare it to the industry benchmark, and call it a day. Sure, determining your score helps you understand where you stand in your industry, but the real magic comes in knowing how to action the feedback from an NPS survey. Drawing action-based conclusions from open-ended feedback requires proper analysis.
How to analyze open-ended NPS feedback
Many people will scan over the open-ended responses anecdotally because that’s the best they can do. Some will even skip the responses from promoters and solely focus on the negative feedback from detractors to help improve their business. This is a mistake.
Businesses should analyze feedback from detractors, passives, and promoters. While spotting improvement opportunities in detractor feedback is common, passive and promoter feedback can help to reinforce procedures, and processes, and even spark ideas for further improvements.
Look for patterns and trends in the responses. Don’t spend too much time on one person’s feedback as this doesn’t represent the masses.
Use the right tools
Getting concrete data requires a large sample and analyzing the open-ended feedback portion of a useful NPS survey is incredibly time-consuming. Using the right tools to extract valuable and actionable insights is what sets a business apart from the rest.
Idiomatic uses key driver analysis to see which issues are actually driving your NPS score and which issues need to improve to increase your NPS score. Our AI software quickly and efficiently identifies patterns, trends, and actionable improvement opportunities.
Request a demo today to help your business grow and boost your NPS score.