Net Promoter Score surveys gauge customer loyalty by identifying customers as detractors, passives, and promoters of your brand. NPS data is captured by asking: “How likely are you to recommend a Company?”
Calculating the NPS is easy. If you need a refresher, we’ve covered more details of how to calculate the Net Promoter Score. The basic formula to calculate the Net Promoter Score is:
Net Promoter Score Formula= %Promoters - %Detractors
Now coming to the point ‘what is a good Net Promoter Score’ it is far more complicated to give the exact figure of a good Net Promoter Score. Unfortunately, there is no exact number that can be benchmarked as a good NPS score. There is a general rule that a good score is above zero and a bad score is below zero. So, a good Net Promoter Score always depends on different factors.
There are 2 methods to explore - what is a good Net Promoter Score:
- Absolute Method - Examining the Net Promoter Score with regards to your industry.
- Relative Method - Determining the Net Promoter Score regardless of industry.
What is a Good Net Promoter Score Formula
NPS >0 means your promoters exceed your passives and detractors. If your NPS = 0, it means you are not delivering a good experience, and if your NPS <0, it means you are delivering a bad experience. Your Net Promoter Score ideally should be greater than 60.
An ideal NPS Score benchmark depends on the industry type, and the products or services provided by your company.
Absolute Method: Net Promoter Score with regards to the general industry
An ideal net promoter score differs for different industries & sectors. Here is a representation of Net Promoter Score Benchmarks by sectors and industries.
What is a good Net Promoter Score as per the different Industries & Sectors?
When it comes to ascertaining a good Net Promoter Score, it may differ for various industries and sectors. It means what is acclaimed as a good Net Promoter Score for one industry can be considered a bad Net Promoter Score for another industry. To benchmark a good Net Promoter Score, you need to compare it to your competitors within your industry.
In the absolute method, the Net Promoter Score greater than 0 is considered as a good Net Promoter Score. NPS >0 means your promoters exceed your passives and detractors. If your NPS = 0, it means you are not delivering a good experience, and if your NPS <0, it means you are delivering a bad experience. Your Net Promoter Score ideally should be greater than 60.
So, if you want to know how well your business is actually doing as per the absolute method (with regards to industries), here’s a breakdown of score:
- - 100-0: In this score range, the majority of customers interacting with your product, service, brand, or business are having a bad experience. They are considered to be unhappy and unsatisfied and likely to spread the negative word of mouth for your goods or services.
- 1-30: In this score range, the business has more promoters than passives & detractors. These happy customers are willing to recommend your brand to others.
- 31-70: In this score range, the companies have an average group of promoters who advocate the brand. This helps the business to convenience the passives and turn them to promoters(e.g. online business brokers).
- 71-100: A company or business with this score range has only a maximum number of promoters and is considered to be the best in their industry.
|Average Net Promoter Score by Industry||Number|
|Software & Apps||30|
Relative Method - Determining the Net Promoter Score regarding your industry or competitors
If you choose to determine the relevancy of your score regardless of the industry then start comparing your Net Promoter Score with the average scores within your industry, and against competitors, this is known as a relative method. The relative method helps you to evaluate yourself as an individual brand in the marketplace. Not only this, but some companies deploy their relative Net Promoter Score as the success metrics among their shareholders.
So, let’s explore some of the highest and lowest average Net Promoter Scores for a variety of industries:
Health Plans NPS Benchmarks
Aetna, Anthem, Humana, Coventry Health Care, Blue Shield of California, Health Net, etc.
Low = 5
Average = 19
High = 39
Auto Dealers NPS Benchmarks
GM, BMW, Honda, Cadillac, Ford, Buick, Chevrolet, Nissan, etc.
Low = 20
Average = 39
High = 51
Computers & Tablets NPS Benchmarks
Lenovo, Sony, Compaq, Gateway, Dell, eMachines, Barnes & Noble, Acer, Hewlett-Packard, Toshiba, Amazon, Apple, etc.
Low = 13
Average = 31
High = 57
Software NPS Benchmarks
Adobe, Microsoft, Google, Intuit, Sony, McAfee, Activision, Apple, Symantec, Blackboard, etc.
Low = 18
Average = 30
High = 44
TV and Internet Service NPS Benchmarks
AOL, AT&T, Verizon, Cablevision, Charter Communications, Comcast, Time Warner Cable, Cox Communications, DirecTV, etc.
Low = -16
Average = 0
High = 19
Net Promoter Score Benchmarks 2021
According to the Customer.guru, Scores higher than 0 are typically considered to be good and scores above 50 are considered to be excellent. The industry average for Service Providers (B2B) is 79.
What are the factors that affect the NPS Benchmark?
Your Average Net Promoter Score never remains constant, it varies between industries and countries. That’s why it is being suggested that you should gain extensive knowledge and detailed understandability of NPS Benchmarks. In one of his interviews, Rob Markey listed 3 factors that influence the Net Promoter Score Benchmark:
- Expanded Experience & Skill in Industry
With the passage of time, companies and industry leaders always look for new changes and innovations to redefine the customer experience. Thus, to achieve this, they expand their capabilities by expanding skills in their team. Accumulation of skills and experience plays a major role in NPS Benchmark. Top-notch level of expertise and extensive experience enable the industry leaders to make a breakthrough in their product/service. Thus, expansion in skills & experience in the industry not only takes industry leaders a level ahead of their competitors but also enables them to set a new NPS Benchmark.
- Various External Forces
As we are all aware that there are some business factors that are completely out of our control. These factors are basically External Forces that affect the Net Promoter Score. Various external forces including economic, political, and eventual factors influence the NPS Benchmark. For instance, there is a decline in the NPS Benchmark of the investment management firm when the stock market drops, or when there are sudden changes to a portfolio tracker.
- Demand & Supply
Demand and Supply are the two elemental factors that play a crucial role in NPS. Sometimes lots of competitors target the same types of customers. In this scenario, they give more priorities to customer relationships rather than revenue and profit.
How to Improve the Net Promoter Score (NPS) of your Business?