What do we do when we have to make big, life-changing decisions?
We talk to our friends and family and take recommendations from them regarding whether we should proceed or not.
We may not accept all their suggestions, but we do ask them just to get different perspectives and finally make a thoughtful decision. Right?
Customers are no different! Like us, they, too, take personal recommendations seriously while deciding to opt-in or opt-out of a brand.
These recommendations speak volumes about how loyal and satisfied customers are with your brand.
While most businesses resort to Net Promoter Score to constantly check customer loyalty and gauge customer satisfaction, few are still figuring out answers to the pertinent question – ‘What is a good Net Promoter Score’.
If you are sailing in the same boat, we are here to help!
This blog spills the secret behind a good Net Promoter Score and how to achieve it. But before that, let’s get our basics of NPS right.
What is NPS?
Net Promoter Score, or NPS as it is popularly known, is a powerful metric to measure customer loyalty and satisfaction. The score is determined by a single question – How likely are you to recommend our company to your friends and colleagues, with 0 to 10 as the answer options.
It also provides a ‘why’ section where customers can elaborate on the score and give detailed feedback.
Based on the ratings customers provide, they are classified into three groups:
- Detractors – These are customers scoring you between 0 to 6. They are usually unhappy with your services and least likely to recommend you to anyone in their social network. In fact, they are capable of spreading negative reviews and tarnishing your company image.
- Passives – Customers who rate you as 7 and 8 are passives. They are people who are indifferent towards your brand – neither happy nor unhappy, but they won’t mind switching to a competitor.
- Promoters – Well, these are the enthusiastic, selfless brand promoters that every brand strives to earn. By giving a rating of 9 and 10, these customers prove their unshakeable loyalty towards a brand. They are highly satisfied and would love to share their positive experiences with people in their social circle.
NPS is a stellar customer feedback tool to spot your top customers, those who are indifferent, as well as those who are on the verge of leaving. While you cannot immediately change the mindset of the stubborn detractors, your aim with NPS should be to constantly improve your customer experience and earn more and more promoters.
The comment section of NPS is a great place to discover what makes customers love and hate your brand. You can use the detailed feedback to build loyalty programs to retain promoters and take corrective measures to win back your detractors.
How is NPS Calculated
NPS score offers a simple and straightforward way to identify your brand loyalists as well as haters. It gives you an average score based on the categories participants fall into.
Here is how this score can be calculated:
- Gather all the survey responses
- Categorize them into promoters, passives, and detractors
- Add the responses for each group
- Now subtract the total number of detractors from the total number of promoters. Divide the figure by the total number of respondents. Multiply that number by 100.
NPS = (Total number of Promoters – Total number of Detractors / Total number of respondents) x 100
If you want the individual percentage for each group, say Promoters. Just take the total number of responses for that group and divide it by the total responses received. Multiply the figure by 100 and you have your group score.
If you are one of those brands looking for a simple and fuss-free way to discover your brand’s strengths and weaknesses, NPS is your best buddy. You can even compare your NPS score with others in the industry to understand where you stand amongst your competitors.
Now comes the million-dollar question that businesses are still struggling with – ‘What is a good Net Promoter Score?’
Well, we might have the answer for you in the next section.
Read More: How to Calculate Net Promoter Score
What is a Good Net Promoter Score?
Since the time NPS was invented, one question that has been plaguing businesses is – “What is a good Net Promoter Score?”
It looks like not many are good in this number game. So, here we are to help you crack the code to a good NPS score.
First things first. A good NPS score indicates a high number of promoters who selflessly promote your brand and spread positive word of mouth. This magic number tells a lot about how successful your strategies are in keeping customers and gaining their love and loyalty.
Before we answer the question ‘What is a good Net Promoter Score’, it’s crucial for you to understand something very basic. A perfect NPS score doesn’t exist.
Think for a second, is it really possible for you to have only promoters and no detractors at all?
While such perfect situations are possible in a parallel universe, in reality, it’s just a dream that never comes true. A healthy approach would be being practical and aiming for positive NPS numbers in your industry.
So, what NPS score is considered healthy or excellent?
Here are some of the ways to understand whether you have a positive or negative NPS score.
1. General Benchmarking
The range of the NPS can be as low as -100 (every customer is a detractor) and as high as 100(every customer is a promoter). However, NPS never reaches these two extremes.
- High Range: More promoters taking the business towards growth.
- Low Range: More detractors ruining the company’s image.
According to the creators of NPS, here is the breakdown of the scores:
- Below 0 – Customers aren’t happy. There is considerable scope for improvement for companies falling in this range.
- 1 to 30 – This score is acceptable, but there is still a lot that companies can do to grow.
- 31 to 50 – Most companies get NPS scores in this bracket. It shows they value customer experience as a good number of customers are willing to recommend the brand to others.
- 50 to 70 – Companies with scores in this range have a large group of promoters.
- 70 to 100 – Such scores are difficult to attain. Businesses with scores in this bracket are leading the market.
This means if your score is below 0, it’s time to pull up your socks. A score above 50 is great and shows that you value customer satisfaction more than anything else. An NPS rating of 70+ indicates your unwavering commitment towards customers and their immense love for all that you do for them.
This general benchmarking can be termed as Absolute NPS that compares your score with that of companies across industries.
2. Comparison With Competitors
Analyzing how your NPS rating stacks up against your competitors tells a lot about your market position. This analysis helps you measure your real growth in terms of your competitors.
For example, if you are in the airline industry with an NPS score of 35, it’s good. But if your competitor manages to achieve a score of 55, you know you can’t rest on your laurels and still have a long way to go.
Besides, NPS scores vary from industry to industry. For example, airlines tend to get higher scores than banks, or department stores are likely to receive a higher NPS than insurance companies.
The ideal approach is to compare your NPS score with competitors in your industry. It gives a realistic picture of where you stand in terms of customer loyalty as compared to your counterparts in the same field.
3. Compare Your Current NPS Score With Previous Scores
There is no particular answer to – What is a good NPS score. It’s all relative and depends on a lot of factors such as your own previous performance.
As an individual number, NPS doesn’t reveal anything. It’s only when you use it in context, such as comparing yourself with your competitors or your past scores, that you can measure the progress you have made so far.
While deciding a good Net Promoter Score for yourself, remember that you are your best benchmark. A consistent improvement in scores in a month, quarter or half-year, shows that you are heading in the right direction.
For example, if your NPS was 20 in the previous quarter and it jumped to 35 in the current quarter – you are clearly running on the right track!
Our Take on What is a Good Net Promoter Score
Still wondering what exactly is a good NPS score and which method you should adopt to calculate it?
Truth be told, we believe it’s always a better idea to compare yourself with your previous performance. You are your own best benchmark and your own competitor. Your competitors may be consistently generating great NPS scores, and your scores might look like peanuts in front of theirs.
Is that something you should be disappointed with?
Yes and No.
Yes, because it’s natural to feel bad when competitors get all the love and attention of customers. Instead of brooding, consider their scores as a benchmark and strive to deliver high-quality customer experiences that match the standard they have set.
No, because if your current NPS score is better than your previous score, it means you are one level up from what you were before. Isn’t that great? For long-term success, what really matters is a consistent improvement over your own performance. Beat your scores every quarter or every six months and watch yourself outgrow your competitors in a couple of years. That’s how powerful self-improvement can be!
Take note of how you are progressing, your NPS trend. This analysis is crucial to make practical decisions for improving brand perception and customer loyalty.
Factors Affecting Your NPS Scores
It’s not easy to earn customer loyalty. There are mountains to climb and oceans to cross to achieve the loyalty you want from your customers. While the process of surveying customers, receiving the scores, and analyzing them is pretty straightforward, there are multiple factors that can influence customer loyalty towards your brand.
Let’s look at the key factors that impact your NPS scores.
Competition in a Niche Industry
Niche industries usually have a few businesses dominating the entire market. Due to the lack of players, there is less competition, which gives customers few options to choose from. With little to no choice, customers tend to be satisfied with the experiences they receive from the single best player in the industry.
Only a few bigwigs lead this segment thanks to the minor competition existing in the market.
Take, for instance, Tesla. This leading electric car manufacturer tends to get a high NPS score, but does that mean the quality of their cars and customer service are exceptional? Not really!
You can’t deny the fact that Tesla makes amazing cars, but there are various downsides as well. The reason behind the excellent score is the fact that customers do not have any good competitors to compare Tesla with.
Two things to note here – a unique value proposition and a less crowded market. If you are a company operating in a niche segment with minor competition and offering an attractive value proposition, a high NPS score is guaranteed.
Customer Tolerance Towards Your Industry
Customer tolerance is a key factor that determines the NPS benchmarks for a particular industry. How tolerant customers are towards the experiences they receive varies from industry to industry. Their tolerance level shows how much or how little customers depend on your brand.
To check the tolerance level of customers, ask the question – “How likely are you to be disappointed if we can’t address your needs immediately?” Provide a score range of 0 to 10, with 0 being the least likely and ten being the most likely.
If the score is near to 10, you are operating in a low-tolerance field. And a score of somewhere around 4 shows that yours is a high-tolerance industry.
Some industries, such as healthcare, have a low tolerance level, while others, like online streaming services or car rentals, show good tolerance. That’s something pretty obvious.
Inability to immediately meet the needs of patients is more likely to bring the NPS down drastically than a car rental service throwing challenges of booking and pricing once in a while.
Timing of Global Events
Global events taking place every once in a while have the power to shake customer attitudes and behavior and bring many businesses down to ashes.
The timing of such events is a key factor in determining NPS score benchmarks. Whether it is an event at the global or local level, it can directly influence customer interests and impact your NPS score.
For example, the Covid-19 pandemic has hit businesses hard, as they are now struggling to stay afloat. This is mostly the case with a few industries such as airlines, hospitality, rental cars, and the like. Travel restrictions and a series of lockdowns has affected these businesses deeply, bringing down the quality they once used to boast of.
It is no surprise that such events, though rare, can significantly bring down the NPS scores of the worst-hit businesses.
Quality of Customer Support
Customers are more likely to shower companies with high scores if they receive top-class treatment from your support staff every time they need help.
A company’s true value is determined by its commitment to customers even after a purchase is made. Customers will have problems, and they will reach out to you – that’s their job. Your job is to treat customers with the same respect and give them the same attention that you did when you were eager to onboard them.
A positive support experience across customers’ preferred channels – social media, phone, live chat, ticketing, or even self-service, goes a long way in earning lasting loyalty.
Strive for quality in every customer support interaction, and you will be one step closer to earning a good NPS score.
The above-mentioned factors can greatly influence your NPS scores so do keep a watch on them while analyzing your NPS scores.
How to Improve Your Net Promoter Score
Whether you receive a low, average, or high NPS score, there is always room for improvement. NPS is like a health check that shows where you currently stand and what you should do to move ahead.
Here we will be discussing some practical ways to raise your score from what it currently is to what it should ideally be.
Analyze the NPS Scores to Spot Trends
The purpose of NPS is to identify your brand loyalists and detractors. With scores pouring in from all directions, analyzing them can get extremely challenging. And if you fail at evaluating the results, confusion regarding the next steps is likely to prevail.
Before you improve your NPS scores, it’s important to measure and analyze them. Modern survey tools like ProProfs Survey Maker come with built-in AI-powered reports that can be generated daily, weekly, or even monthly. The reports gather all the NPS data and present it to you in the form of visually appealing graphs and charts to make analysis easier.
This means you don’t have to waste time manually sorting your promoters, detractors, and passives. Reports can do that for you and even more. They provide additional information around who took your survey, when it was taken, and how the participants responded.
With the right data up your sleeves, you can easily compare NPS data with previous scores, identify your biggest loyalists as well as detractors, and make informed decisions.
Handle Your Detractors With Care
Remember this quote by Bill Gates – “Your most unhappy customers are your greatest source of learning.”?
This quote was relevant ten years ago, and it stands true today as well.
Detractors are the people who are least satisfied with your company, which means there is something you aren’t doing right. Their frustration level is at its peak, so you need to show extra care while handling their feedback.
Leave no stone unturned in addressing the feedback given by detractors. Ask your support team to take special care of their requests, respond on time, and show them your best side. Once you address their concerns, send surveys to gauge how satisfied they are with the responses and if there is something else you can do to meet their needs.
Detractors can open your eyes and expose you to problems that you never knew before. Look out for common problems that most detractors face and prioritize your energies towards fixing them. This is a sure-fire way to win back most of your detractors.
Here’s a video that tells you more about how to improve your NPS scores.
Work on Your Customer Support
If you have the best products and services, then a poor or average NPS score can be blamed on inadequate customer support.
Research reveals that for 96% of customers across the globe, customer service is crucial for their loyalty towards a brand.
The quality of the support you provide can indeed make or break the customer experience and massively impact your loyalty scores.
The good news is that customer support, and in turn, the experience customers receive, can be improved by doing just a few simple things right.
For example, don’t make customers wait when they are frustrated and looking for a quick fix. Be active on all the channels they frequently use, be it social media, chat, emails, or phones. Take help closer to your customers and prevent them from contacting you by equipping them with a powerful self-service help center.
Be empathetic to their problems, communicate better, and most importantly, show them that you care and you have the perfect recipe for a good NPS score.
Invest in Your Products & Services
Whether you are a year-old startup or a big multinational company, one thing is clear – customers value good products and services.
They can ditch a big brand if they find more value in a startup’s products and vice versa. So, your NPS score boils down to one thing – the experience customers receive on using your products and services.
Recurring positive experiences build a level of trust in customers, that even if given a choice, they would stick to your brand. No one wants to switch to a competitor and begin the relationship from scratch unless and until a bad experience forces them to do so.
Look at what your competitors are offering, identify what customers really need, and work towards improving your products and services. As customer needs change, your product should continuously evolve to meet those needs.
A great product = happy customers = a good NPS score
Find Ways to Delight Promoters & Improve the Experience of Passives
Focusing on promoters and passives is just as important as caring for detractors. There are multiple reasons promoters love your brand and are ready to selflessly promote it in their social network.
With NPS, you can find those reasons and continue to deliver better value to promoters so that even the thought of abandoning your brand doesn’t cross their mind. And even if it does, the love you’d reciprocate to customers will keep them coming back to you.
As far as passives are concerned, you would consider putting some effort into finding what they are unhappy with. Because, unless you don’t know the reasons, you will be incapable of improving their experience.
That’s why besides the numerical score, the ‘why’ section of the NPS survey is so important. It gives a deeper insight into why a customer chose a particular score for you. You can use it to identify areas where you fall flat and put in the required efforts to enhance the experience of passives and turn them into your biggest advocates over time.
Improve Your NPS Score & Earn Lasting Loyalty
Contrary to popular belief, NPS is not just a number you need to grow. It is a qualitative metric that helps you reflect on your past actions and analyze them to inform your future.
Every business today is running after achieving customer loyalty and increasing its NPS scores. What they forget is that this magical score is determined by one simple thing – treating your customers right!
In a rush to nail this number game, most businesses often get confused with ‘what is the good Net Promoter Score’ for them. Obviously, a score that’s working for company A might not work for company B due to various factors that we discussed above. Knowing what’s good for you and what’s not is crucial to make the right decisions that can help you win the loyalty of your customers.
When it comes to NPS, always have a progressive approach. Compare your current scores with previous performance and analyze how much you’ve progressed and how much you still need to improve.
And if you need help with your NPS, we’re always there for you!
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