NPS benchmarks are a very sought-after resource that many companies want to use when setting goals for their own NPS strategy. However, one must remember that you should not stare blind on others’ NPS since there are many factors affecting the score itself. In this article, we share some good tips on how you should manage and utilize NPS benchmarks.
The Net Promoter Score
Net Promoter Score is a unique customer experience metric. As you probably know, one of the two parts of the NPS is a number. You can count the score by a simple formula:
Thus, the NPS may vary from -100 to 100, leaving -100 least desirable and 100 most preferred. Once you know how to calculate “The one number you need to know” it’s logical to aim at the score of 100, isn’t it?
It’s not that simple.
The score of 100 means that 100% of your customers are promoters, which is an unrealistic approach. As the famous saying goes: you can’t please everyone. We advise focusing on those customers that are closer to you. Pay attention to the promoters who are at the same time active ambassadors of your company. Knowing how to communicate and strengthen your main competitive advantages is crucial for marketing and positive customer experience.
Does it mean, that you should forget about detractors?
Yes and no. Even though it is literally impossible to achieve perfection and convert every detractor to an active promoter, you could work on those detractors that are just a few steps away from converting into a passive or a promoter.
if you can’t reach the score of 100 – what’s the goal?
Your ideal score should pass three levels.
1. Be positive
First, your NPS should be above 0. The score, above 0 is already an achievement, as your company has more promoters than detractors.
2. Aim higher
Second, check that your current NPS is higher than the previous one. The beauty of the Net Promoter System is that you can compare the scores, see the progress throughout time and evaluate your efforts towards the NPS.
3. Only then, look at nps benchmarks
When looking at NPS benchmarks, you should aim for an NPS that is above average in your industry – that is how you could keep high standards and results. For example, according to the research of the Temkin Group in 2016, the average NPS of software companies in the US is 41, and “dream-to-achieve” score is 55.
However turn your head to the banking industry and the image is different. For the US banks, the average score counts for 32 and the NPS goal is 62.
The practical examples of the industry-related scores show that you should pay close attention to the business environment where your company operates.
Find out more examples of industry NPS benchmarks from the latest NPS Benchmark Temkin study conducted in 2018. Note, the data is collected in the US where generally NPS is higher than, for example, in Europe.
Another good sign is that your NPS is higher than your competitors’ scores. Benchmarking would be very useful.
is there a correlation between NPS and company growth?
The answer is… yes! According to a study published by London School of Economics titled “Advocacy Drives Growth”, an average NPS increase of 7% correlates on average with a 1% growth in revenue. Great reason to think about how to increase your NPS!
However, influencing your current NPS is hardly possible without a bigger picture.
When analyzing the scores, remember that NPS is more than just a score and missing the open response part leaves a company without deep insights on what drives your customer experience up or down. Analyzing NPS as a whole will bring you to understanding what your customers love and hate about the company, what do they see as competitive advantages and which direction you should move forward.