Net Promoter Score 101: How to Determine an NPS Benchmark

Promoters, passives, and detractors say a lot about the experiences you offer — here’s how to determine a net promoter score (NPS) benchmark.

Net promoter score (NPS®) helps you understand where you stand with your customers. How do they perceive you? How do they feel about their experience with your product or customer service? Regularly measuring your NPS allows you to keep a pulse on your relationships with customers and make informed decisions regarding improvements to what you offer and how you engage customers at every touchpoint.

Knowing the general benchmarks across various industries can help you understand how you measure up in terms of customer or employee experience.

How Net Promoter Score Formulas Measure Customer Loyalty

Net promoter scores deliver insights into how many customers are likely to not only continue buying from your company but also recommend it to others. Upon surveying customers on their general experience across various segments like product features, satisfaction, or customer service, you can parse these elements into promoters, passives, and detractors.

Promoters vs Detractors

Promoters are individuals who are likely to recommend your product or company to others. When taking a net promoter survey, these individuals give your product or company scores from 9 to 10.

Detractors, on the other hand, are customers who are unlikely to recommend your product or company to others. These individuals will give you a score between 0 and 6.

Right in the middle of your promoters and detractors are the passives. On the surface, these individuals deliver a seemingly good score of 7 to 8. While generally satisfied with their experience with your product or service, they aren’t as motivated to recommend your company to others as promoters are.

Absolute & Relative NPS

There are two ways to look at your net promoter score, and this will change the way you view what a “good” score is: absolute and relative.

Absolute NPS: Your net promoter score, calculated using the NPS formula, is measured up against scores from all industries. Generally, absolute NPS is broken down as follows:

• Good: Above 0
• Favorable: Above 20
• Excellent: Above 50
• World Class: Above 80 

Relative NPS: Your net promoter score is measured up against competitors within your specific industry.

Understanding the lens through which you are analyzing your NPS is important, as absolute and relative NPS can have dramatically different outcomes. You may not have a ‘good’ net promoter score across the average for all industries, but you might be doing exceptionally well against immediate competitors.

Common Approaches for Determining an NPS Benchmark

Once a net promoter score is gathered, companies can use benchmarking as a comparative tool to see how they are performing against other competitors within their same industry. It can also provide a backbone to conversations centering on company and product improvements, and new experience strategies.

Benchmarking can help achieve the following:

• Identify top performers in the industry
• Understand what competitors are doing to drive results
• New strategies for an enhanced customer experience
• Identifying new best practices to incorporate into operations

The key lies in the approach to measuring performance — and actually taking action on the results. This can be done through metric-driven benchmarks and practice-driven benchmarks.

Metrics-driven benchmarking

Companies use metrics-based benchmarking strategies to compare customer experience performance across different departments (or even regions!) of their organization. This can help them identify what areas of the company need improvement, and drive brainstorming around how to make these improvements. The data resulting from metrics-driven benchmarking can help provide prioritization of what to improve first and creates a clear measurement of success.

The downside of this approach to benchmarking, however, is that oftentimes companies can pull in a lot of numbers but not know what to do with them. If the team gathering information doesn’t understand how to translate data into action, then this approach can seem expensive and time-consuming with little actionable outcomes.

Additionally, there may be difficulty in interpreting data as different departments or teams across a single organization might use different variations of the approach, such as:

• Using variations of survey questions asking the same thing
• Using different response scales to measure customer satisfaction
• Surveying customers at different frequencies or points along the customer journey
• Applying different weighting strategies

Practice-driven benchmarking

Practice-driven benchmarking is a more qualitative approach than metric-driven benchmarking. This approach involves looking beyond scores and focusing attention on behaviors or management practices. Focusing on qualitative behavioral data can help direct companies to new solutions that can stimulate greater change.

This approach can expand the amount of companies a single organization can turn to as inspiration, which can provide more actionable things that can be done to improve operations. However, this can also lead to selective-bias. Companies might ignore smaller, less notable companies and aspire to be the bigger giants within the industry. While aspiring for a lofty goal can provide inspiration and motivation, it can also discourage the greater operation should they not meet the same success in a certain span of time.

What is a Good Net Promoter Score Benchmark?

Tech protection and service company, Likewize, was able to double responses to NPS surveys using a selection of best practices, including:

• Setting expectations upfront: What will be done with this information?
• Limiting the amount of questions: Keep the survey to one page, and five questions if possible.
• Rotating who gets the survey: Prevent survey fatigue by giving responders a break.

When gathering responses to surveys, consider similar benchmarks to those used by Likewize to set expectations with your team:

• B2B surveys result in lower response rates than B2C surveys by about 10 points
• SMS surveys garner a higher survey response rate than email — text messaging-based surveys generate a response rate of around 35% to 40%, compared to nearly 10% less than email; those rates drop by up to 15 points for service surveys, to 25% to 30% for SMS and 15% to 25% for email
• Sales surveys receive a stronger response rate and higher net promoter score compared to service surveys, and this is most likely due to people being happier immediately after they make a purchase

Determine a Net Promoter Score (NPS) Benchmark to Build Better Experiences

NPS provides the opportunity to understand the experiences that are creating promoters, passives, and detractors. Once you obtain a net promoter score benchmark, you can analyze the ‘why’ behind it and make improvements that engage customers effectively and improve their overall experiences with your brand.