Let’s stop the craziness around Net Promoter®… | CustomerGauge Let’s stop the craziness around Net Promoter® Benchmarks, shall we?

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Let’s stop the craziness around Net Promoter® Benchmarks, shall we?

Apparently, male internet users are obsessed with size. From experience, l’d say Net Promoter® professionals also obsess over size - the size of other companies’ scores. And for equally meaningless reasons.

15600 Color PhotoThis phenomenon of “Score Envy” seems to be the driver of most visits to npsbenchmarks.com. I’ve worked with Net Promoter for ten years, and I love that we are finally getting some open source data reported in a public database of companies.

But if you come to the site searching for an easy comparison, I would like to warn you about the dangers.

Be aware that it’s an open database. Some companies have been known to stretch the truth. And so entries from press releases should taken with a pinch of salt. Other entries come from more reputable sources like annual reports of publicly traded companies (but just remember that NPS is NOT a GAAP number. These aren’t audited).

So how do you tune out the noise and find the nuggets of truth?

I present my Five Indicators of Net Promoter Hokum:

  1. Any number that contains a decimal point is probably inaccurate. Eg “96.6 NPS for Acme Corp.”. Given that even a +/-2% error margin would be regarded as excellent, stating NPS to a tenth of a point seems optimistic. That number has been calculated by someone who has little appreciation for basic surveying. And for that reason, if you see a result that has two decimal places, it’s probably bogus.
  2. Any published number of more than 90 is a PR puff. Of course there are companies with +90 NPS. Notably Tesla, Amazon, Zappos and others. But these NPS stars are so obsessed with customer experience that they don't need to brag about a high NPS score. The companies that shout about high scores have often conducted a limited survey (say, 100 customers, carefully selected) and gone public with the results. It's a tell-tale sign that the company is just chasing good PR. Also look out for companies misusing the % sign and including quotes like “received a net promoter score of 92.25” as if its awarded by a higher power…
  3. Self Reported NPS with sketchy details is suspect. OK, I get it. Details are boring in a press release. But it’s not hard to give background information on timing, number of responses etc - and lack of this color looks like it's being hidden.
  4. Apples to apples? More like Apple to Dell... Even if you could be sure that the methodology was standardized, - business models in multiple industries are not exactly alike. High scoring companies like Southwest have a completely different audience than for instance another NPS ace USAA who work with a limited customer set (military personnel).
  5. Easy to be fooled by the average. Don’t aim for benchmarking yourself against other businesses – that’s the best way to become mediocre. Benchmark internally, take best practice from segments within your business and then understand the differences to better track your NPS improvement.

 

Just to put this in perspective - there are good sources of benchmark data out there: Temkin Group and Satmetrix provide industry NPS studies based on sound methodology.  And some companies do provide a methodology and are serious about reporting (if you want to learn more about this check out our standardized reporting guidelines).

And I’m delighted to see that the NPSBenchmarks team has announced they are conducting some open source research with NPS professionals. For the first time, we’ll see public disclosure on response rates, close-loop rates, targets and other operational numbers. These will be publicly assessable to help new and existing NPS users improve their programs. I urge all companies to open up and share base level data to help the whole industry.

This will bring some sanity to the whole debate on benchmarks. And maybe then, we can truly say, size does matter.

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