You may know what your Net Promoter Score (NPS) is, but do you know if it's enough? Below you’ll discover how to tell if you have a ‘good’ NPS, strategies for improving for your NPS and ways to leverage NPS to grow your business.
What is a good NPS?
Any NPS score above 0 is "good". It means that your audience is more loyal than not. Anything above 20 is considered "favourable". Bain & Co, the source of the NPS system, suggests that above 50 is excellent, and above 80 is world class.
However, these are only general guidelines. A ‘good NPS’ will depend on the industry and country a business is in.
What is the impact of location on NPS?
In Europe, for example, customers tend to be more conservative with their ratings. A high score, a 9 or a 10, is rare. Japan has a similar reaction, as it is considered poor etiquette to provide a company with a perfect score. In the US, on the other hand, it is far more common to see higher scores, with low scores being just as rare as high ones are in conservative countries.
In other countries, scores are more extreme, with dissatisfied customers liberally using the lower end of the scale, and even mildly impressed clients honouring a business with a full 10/10.
For example, one of Perceptive’s global SaaS clients has an enormous difference in its average NPS from country to country. In Singapore, the company scores 20 points lower than their global average. In the United States, it scores 10 points higher.
This is a single company offering similar products and services from country to country to similar people. But the average NPS varies wildly. This might be for legitimate reasons, such as poor customer support in some areas, but it will still be heavily affected by the likelihood (or lack thereof) of people rating the same across countries.
Knowing what a “good NPS” is the world over quickly becomes difficult. However, a rule of thumb for those looking for guidance:
As a general rule in New Zealand and Australia, you should aim for an average NPS of 30.
Related content: How do you calculate a Net Promoter Score?
What is the impact of industry on NPS?
Your industry may naturally lend itself to lower NPS as a whole.
Property management and debt collection, for example, tend to score in the negatives. Check your score against NPS benchmarks for your specific industry to ensure this isn't the case.
If you do find that your industry scores poorly across the board, you have been presented with an opportunity. If you can impress even a small number of clients/customers, you can outpace the competition in customer experience.
If you're in a niche industry and NPS data isn't readily available, benchmark yourself against your previous performance instead. If you are improving by about 10 per cent a quarter, you can assume you are heading in the right direction. This is true even if your recent score is still negative—it just has to be less negative.
Related content: The top 3 Net Promoter Score industries in Australia and New Zealand.
How can I improve my NPS?
If you find that you have a low net promoter score, don't panic. There are a number of reasons why this may be the case.
1) Technical issues
NPS survey design and deployment is complex with a number of moving parts. If you are handling this yourself rather than going through a reputable market research agency, ensure that all of those moving parts are operating smoothly.
Keep an eye out for issues such as the following:
Low response rates.
Survey 'bombing' or the act of sending out multiple surveys in a short amount of time.
The use of financial rewards for high scores.
Inappropriate or badly weighted survey methodology e.g. phone call vs online.
Note this also applies if you have a strangely high score compared to previous performance. Accuracy is key, not vanity.
If you do uncover these problems, we recommend going through a specialist customer insights service provider to ensure you are getting accurate data.
Related content: How to use NPS to inform your customer journey map
2) Experience issues
If you’re sure that your NPS surveys are going off without issue (which should be the case if you are using a specialist NPS advisor), it’s likely that genuine customer experience-related issues are to blame for a poor score.
Tomas Dickson, Director of CX at Perceptive, has some insight into how business can improve their chances of a better NPS:
“In our experience, it is often the most simple things letting a business down. Pick up the phone faster, reduce wait times, and, in general, just communicate better,” he explains.
“Don’t make your customers come to you. Go to them—this will massively improve your customer satisfaction and, invariably, your NPS too.”
Generally speaking, improving your NPS centres on one thing: providing a good experience for your customers, keeping them at the centre of your business, and should you fail at some point, make sure you react immediately to rectify the situation.
Related content: How to increase your Net Promoter Score percentage in 5 easy steps
How to use NPS to be more competitive
NPS allows a company to understand their place in their industry as a whole, rather than just its own reputation in a vacuum—enabling it to see how they can leverage their own unique position to outclass the competition.
“You can identify the needs and, often, wants of your customers with a single question in the NPS surveys,” Tomas explains.
“Once you have identified the one major improvement you can make as a business right now, you instantly gain insight into what is going to provide real ROI in your business.”
A good NPS score is more than just a number. It’s a comparison to your peers, it’s an indicator of your current success, and it’s a way to gain direct, actionable insight into where your business needs to go next.
Don’t be distracted by the pure metrics. The NPS system can provide so much more.
Related content: Grow your business with NPS [free eBook]