What Is a Good Net Promoter Score?

The results are in: your NPS score is 20!

Is this a cause for celebration, or should you panic and double down on improving experiences with your brand?

If you ever wondered what makes a good Net Promoter Score, NPS in short, then look no further.

Today we discuss everything related to NPS - from interpretation methodologies to the importance of benchmarking, adding fresh insights on improving your Net Promoter Score.

Keep reading and discover if your scores reflect your stellar customer service or opportunities for improvement.

How NPS Measures Customer Loyalty

Whether you call it the Net Promoter Score, NPS, or just another satisfaction survey, the truth is that NPS is a fantastic tool to measure customer satisfaction.

But first, let's recap the Net Promoter Score to give you a fresh view of this crucial metric and why you should measure and improve it.

The NPS feedback gives you an essential glimpse into the sentiment of your customers:

• Did they love you so much that they can't wait to recommend you to their communities?
• Or were they so unsatisfied with the experience that they will not only churn but also bad-mouth you to their peers?

With a score ranging from 0-10, your customer experience management teams can get the answer to a simple question:

Will my customers recommend this brand, or not?

To understand your NPS results and not leave room for error, we suggest you use an NPS calculator or an NPS software to set the NPS survey and accurately represent your results.

The happier your customers, the more loyal they'll stay - coming back to you each time they need to re-stock your products.

Unlike other satisfaction surveys, with the NPS, you can also understand whether you can include word-of-mouth advertising in your marketing strategies. This is possible because the Net Promoter Score measures your Promoters and Detractors.

What is a Good Net Promoter Score?

As with most KPIs and metrics in marketing, "good" and "bad" net promoter scores vary from industry to industry.

Before diving further into this idea, let's remember how you calculate the NPS:

the NPS formula

Therefore, any score above 0 (Positive Score) is a "good" score because it reveals you have more Promoters than Detractors. The bigger the score, the higher the satisfaction of your customers.

In parallel, if your score is below 0 (Negative Score), your Detractors outnumber your Promoters. This means your customers are unhappy with your brand and unlikely to recommend your business to their community.

This was always a cause for alarm, but now it's getting more stringent since acquisition costs are churning, and you should rely on retention more.

It's a consensus that an NPS raging between 30 and 60 is a good score and reveals you're customers are delighted.

Yet, this Negative/Positive classification is just one side of the story.

Since your business doesn't exist in a void, you should benchmark your score against other companies inside your industry.

Not all industries are created equal, so NPS varies from industry to industry.

For example, suppose your business relies on 1on1 consultancy. In that case, your NPS will be higher than the average - since your relationship with your customer is complex and intimate (you see each other regularly).

Following this idea, if you sell luxury goods or provide once-in-a-lifetime services, your NPS will be lower than average since customer interaction is rare.

Since scores vary from industry to industry, you want to use benchmarking to get an even clearer vision of how you're doing. With benchmarking, you compare similar companies, products, and customers, so you won't get alarmed or complacent when seeing your scores.

Bottom line - the NPS isn't just another vanity metric you need to measure. The NPS is a business diagnosis you should analyze and use as a growth opportunity.

The only reason behind measuring the NPS is to track, analyze, and improve the relationships your customers have with your brand.

How can I improve my NPS?

So, you measured your NPS and realized there's room for improvement? Excellent - this is where the growth and success of your business start.

The most obvious answer for improving your NPS score is listening to customer feedback and using customer insights to make positive changes inside your company.

However, you shouldn't make random changes to how you do business. Journey-map the improvements, just like you would journey map the customer experience.

Step 1 - Discover the Source of Low Scores.

When calculating your NPS, you can ask Detractors for improvement opportunities or the reasoning behind their scoring.

You start observing patterns when you do it long enough and gather enough feedback.

You can see that some departments, products, or even locations have more detractors than others.

You narrow it down as much as possible and improve the problem most people will pinpoint. After you realize what's causing the low scores, you can move to the next step.

Step 2 - Address the root cause.

As we said, you don't need to make random changes inside your business; all uproot your whole business model. When most of your Detractors reveal systematic problems inside your company, you should act quickly and address the issues.

Couple solving the problems with targeted NPS surveys to monitor improvements and the success of your changes.

If you notice positive changes, amazing!

If not, go back to brainstorming and try again.

Step 3 - Involve your whole team.

There's strength in numbers, but there's also way easier to make significant changes when everybody is on board and on the same page.

Ensure everyone inside your eCommerce business has their eye on the prize and understands that the end goal is improving the NPS, thus earning free word-of-mouth advertising.

Make it a vision to share inside your company and ask department managers to help implement this vision across all departments.

Explain the methodology and how you measure NPS and include it in your company's KPIs.

You can also hold regular meetings (huddles) where you discuss NPS and monitor your progress. This allows your teams to share ideas, brainstorm, or devise solutions for common complaints.

Ongoing improvements -

don't forget about the Customer Experience.

While the first steps are company-centric, let's keep in mind the absolute rockstar inside your business: the customer.

People will recommend (or bad-mouth) your business based on their experience.

Your NPS will show you how well you're keeping your customers happy, and if the numbers reveal you're not doing a good job, that needs to change.

Make it a priority to identify your customers' needs and expectations, then come up with solutions that genuinely help them.

People aren't walking wallets, they're humans with needs and emotions, and your purpose is to empower them and help them reach their goals.

Happy customers are loyal and will spread the word about you, your brand, and your products.

Absolute and relative NPS

NPS scores can be interpreted in two POVs:

• Absolute NPS - comparing your score against a common consensus across all industries.

• Relative NPS - comparing your net promoter score against a specific standard inside your industry.

Number one - Absolute NPS

Applying this methodology can designate a positive NPS as "good" and a negative NPS as "bad."

Evidently, the interpretation is more nuanced than this. Still, the positive/negative classification is a quick way to understand the absolute NPS.

When your NPS is positive (above 0), it means the number of Promoters exceeds the number of Detractors. However, a positive NPS doesn't necessarily mean that you're doing a stellar job in terms of customer experience.

Suppose your average NPS score is just above 0. In that case, your experience management department barely pays the slightest effort into providing excellent experiences.

Let's look at a more nuanced interpretation of a positive score. So you can understand how well you're doing and whether or not you should invest more effort in the customer experience.

NPS raging between – 100-0: A negative NPS score means your customers have poor experiences with your brand. Not only are your shoppers unhappy with your brand (products, experience, employees), but they're actively advising their peers to avoid shopping from you.

NPS raging between 1-30: If your score is barely positive, it means there are a lot of areas of improvement inside your business. Use your survey tools to identify these areas and make the necessary changes.

NPS raging between 31-50: If this is your score, you can start relaxing. It means you value customer experiences and take active steps to strengthen your relationships with your customers. You can start thinking about customer loyalty and provide benefits or perks to Promoters and incentivize them to promote our business.

NPS raging between 51-70: If you find yourself in this range, it means you are a customer-centric company - treating customer experience as a top priority. You're also in the eCommerce promised land, where you have many Promoters willing to recommend you to their peers.

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NPS raging between 71-100: While this is a fantastic score and a goal for eCommerce companies, few businesses manage to reach it. Companies with such NPS results are considered industry leaders and some of the most loved brands.

Number two - Relative NPS

The interpretation of Relative NPS is complicated - since the scores depend on the industry average.

In short, relative NPS means comparing your score with industry net promoter score benchmarks, so you can't decide whether your score is good or bad based on general data.

While it's harder to analyze, relative NPS helps you be aware of your score in the marketplace.

If you decide to use a Relative NPS methodology, remember that various factors that affect NPS benchmarks and values vary from industry to industry.

Interestingly enough, there are industries with low NPS that are still thriving. This happens because there are few options available, so consumers have no choice but to use the services, even though the experience is poor. Some examples here are cable services, energy suppliers, and gas providers.

However, suppose the competition is fierce, and consumers have plenty of alternatives. In that case, other industries will ride or die based on their NPS.

If you're also doing business in a hyper-competitive industry (beauty, fashion, consumer goods), know that the experiences you're providing are the way you differentiate yourself in the eyes of online shoppers.

Some of your competitors will publicly post their NPS for their shareholders (and bragging rights), but you risk getting a biased view.

Suppose you want to compare your NPS with the average NPS in your industry and ensure the numbers are correct. In that case, you can use a website like Statista or Gartner's Reports to get the latest insights.

Why are NPS benchmarks important?

Suppose you decide to measure the Relative NPS. In that case, NPS benchmarks are crucial to help you get an accurate idea about your performance in providing adequate customer experiences.

As you saw earlier, some industries thrive despite low scores. In contrast, others need outstanding efforts to survive despite their high scores.

Several factors will influence customer loyalty and satisfaction - such as website performance, emotional attachment to a brand, competitors' performance, products' quality, price, etc.

In parallel, a customer's likeliness of recommending your brand depends on several factors and can vary from industry to industry.

This variation compels you to compare and contrast your net promoter score with other players inside your industry - instead of comparing yourself with the average net promoter score across all possible industries.

After all, your purpose is to earn more market share through excellent experiences and high-quality products. Therefore, you should always refer to industry benchmarks to ensure your NPS analysis is accurate and provides a precise picture of how you compare to competitors.

Different industries have individual thresholds for good and bad NPS, and you must be aware of these differences. You can't compare the NPS of a cable company to the NPS of consumer goods since standards and expectations vary in each industry.

Comparing your NPS with Net Promoter Score benchmarks from industries that are poles apart from yours is like comparing apples to oranges.

NPS numbers get even more varied when looking at location, demographics, or cultural differences that can impact your scores. For example, conservative countries tend to be harsher with brand voices.

At the same time, those in minority groups give higher scores to brands sharing their values.

Another example comes from the economy of a specific country. States with former totalitarian regimes tend to give higher scores to businesses.

At the same time, countries with solid capitalist backgrounds (and more shopping experience) have higher standards. They are less likely to give rates of 9-10.

Even survey channels can affect your numbers. People surveyed over the phone are more likely to give lower scores since a phone call from a brand representative is viewed as an inconvenience, as opposed to email NPS surveys.

Since it's based on sentiment and individual experiences, your NPS is subjective and varies. Several factors will affect your score from location to industry, so make sure you're taking all into account when benchmarking yourself against your competitors.

The narrower you get with your comparison, the better. What's noteworthy to mention is that while Absolute NPS is an excellent place to start, you should consider the Relative NPS and see how you stand against the competition.

Bonus - if you're constantly updated with industry benchmarks, you're also updated with any changes inside the industry.

Maybe what was considered a good NPS this time last year is now only an average NPS. This means you might want to double down on customer experience since the standards are now higher.

Wrap-up

The most important thing you need to understand - your NPS results don't exist inside a void, and your score isn't abstract.

You operate inside a society, and your industry comes with its own rules and perks. So, even if you think your score is good or bad, intuition isn't something you should use to make a decision.

Always compare your NPS with your industry average, competitors' scores, and even your past scores.

This is how you get the vision you're lacking today and identify opportunities to improve your retention rate and overall revenue.

Frequently Asked Questions about Good NPS

What is a good NPS score out of 100? The consensus is that a positive (above 0) score is always a good score. However, the average "good" scores range between 31 and 50. To get an ever more accurate view, you should benchmark your scores against others in your industry.

The consensus is that a positive (above 0) score is always a good score. However, the average "good" scores range between 31 and 50. To get an ever more accurate view, you should benchmark your scores against others in your industry.

What is a good average NPS score? Good NPS vary from industry to industry. However, a score between 31 and 50 is usually considered good. Yet, you want to compare your score with your competitors', to get an ever better view on your performance.

Good NPS vary from industry to industry. However, a score between 31 and 50 is usually considered good. Yet, you want to compare your score with your competitors', to get an ever better view on your performance.