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How to benchmark your NPS
This is a a guest post by Ellie Peterson, Customer Concierge at Delighted.
As you stand up your Net Promoter Score ® (NPS) program and responses start flowing in, it can be exciting to read the feedback and calculate your NPS score. But what does that NPS number really mean?
Sure, a positive number is positive, and a negative number is, well, negative, but how do you know when your NPS is good, and when it has room for improvement? How can you compare your score to others in your industry, or to any general benchmarks?
As a Customer Concierge at Delighted, I spend most of my time talking to companies about their Customer Experience (CX) programs and how to improve them, and I’ve heard these questions from so many of them. Below, I’ll walk through some strategies for both external and internal benchmarking, as well as try to convince you that the score itself should be the last thing on your mind.
External NPS benchmarks
General NPS benchmarks
Based on scores reported out across industries and on research done by the inventors of the NPS methodology, you can use the following breakdown to generally categorize your NPS score:
- 40 is considered a solid positive score
- A score above 50 would be an extremely positive score
- Scores above 65 are typically the milestone where organic growth starts developing rapidly
- Scores above 70 are rare and exceptional
NPS benchmarks by industry
In 2016, the Temkin Group conducted a study to understand NPS scores across 20 different industries, which has become a source of truth when it comes to NPS benchmarks. You can read the details of that study on Delighted’s NPS Benchmarking page and compare your score!
Based on this study, we know that auto dealers and software companies generally have higher NPS scores, while TV and Internet service providers generally have lower scores. Delivery services and appliance companies generally all have similar NPS scores, while hotels and retailers usually have a wide range of scores between companies. This makes sense: companies that provide critical services with little competition (like utilities and cable providers) will thrive despite low scores, while experiential companies (like hotels) and competitive industries (like luxury consumer products) will see a high NPS or lose to the competition.
A note about external benchmarks
External benchmarks can be helpful for getting a general understanding of where your score places you in comparison to your peers. But there are a lot of aspects of your program to consider: What time period are these scores gathered over? How many of your customers did you survey? Did you survey just new customers, or just enterprise customers? How long after interacting with customers did you survey them?
Because all of these details can influence your score, it’s almost impossible to get a 1:1, apples-to-apples comparison of your score to industry or general benchmarks. While these external benchmarks can provide a directional sense of where your score should be, they often speak to touchpoints and customer cohorts that simply aren’t important or applicable to your organization. That’s where internal benchmarks come in!
Internal NPS benchmarks
Internal benchmarking refers to the practice of comparing your score this month to your score last month, last quarter, or last year. The most productive point of comparison for your organization is…your organization!
For overall NPS, we recommend looking at a 30-day time window for your score. This ensures you’re capturing a wide enough time frame that the score is significant, without running into recency bias. Take a look at how your score has changed month over month, as well as how different it is from this time last year, and/or this time last quarter.
NPS benchmarks by customer segment
After taking a look at how your overall score has changed, you can dive in and look at how it has changed for different customer segments. For example, you might compare your NPS score from enterprise customers to your NPS score from free customers. Or maybe you want to compare the NPS score at one point in your customer journey to another. How are these segments changing over time?
Delighted’s Trends feature allows you to track these customer segments and touchpoints easily, instantly rendering reports and graphs that chart your segment performance over time.
NPS benchmarks by keyword
While your customer base may be divisible into segments, your customers’ responses may also be divisible into different topics. While some respondents might leave feedback about your delivery speed, others might comment on your product quality. Still others might be interested in discussing price. It’s helpful to track these topics to see whether mentions of each are more positive or negative. One customer might give a score of 10 because your prices can’t be beat, but another might leave a 5 and say she wished you had sales more often.
You may know which topics your customers are likely to mention, but using Delighted’s Smart Trends can save you time and prevent any topics from slipping through the cracks. Using Delighted AI, Smart Trends identifies keywords in your comments that relate to overall trends, and suggest those Trends for tracking in your Dashboard.
Does the NPS response really matter?
I mentioned earlier that I spend most of my time helping companies implement and improve their NPS programs. “How do I improve my NPS score?” is a question I get all the time. But it’s the wrong question to be asking.
Trying to hit a specific number goal can be helpful, but not if it’s based on a benchmark number that has no real comparison to the way you’re running your organization’s CX program. At the end of the day, there are plenty of ways to artificially inflate your NPS score — only survey repeat customers, or offer a $10 gift card for everyone who gives you a 10/10. What’s more difficult — and infinitely more meaningful — is improving your customer experience.
Rather than focusing on increasing the score, focus on understanding where you’re delivering and where you’re missing the mark. Focus on following up with dissatisfied customers, identifying areas for improvement, and acting on those areas, so that the next time customers receive a survey from you, they’re ready to be enthusiastic promoters.
The goal should be to make significant improvements in your customers’ lives — NPS is simply how you measure that impact.
For more NPS tips, grab ChurnZero’s NPS cheat sheet to learn how to administer, calculate, and follow-up on survey responses.