One of the most common FAQs we get is 'what is a good Net Promoter Score?'
We've built one of the largest databases of NPS Benchmarks to compare against, but it's important to emphasize that results will naturally vary from business to business and industry to industry—not to mention that survey collection methods and response rates are always different and impact the score dramatically.
In this article, we'll share four approaches you can use to determine if your score is good or not. And we'll recommend what really matters when it comes to driving customer retention.
💡 Takeaway: It matters less what your score is, and more what you do with that information. For example, if you know a high value customer is an NPS Detractor then you know the relationship needs your immediate attention.
Table of Contents
- What's a good NPS score? 4 ways to find out:
- How to achieve a good NPS score
- How Account Experience helps B2B companies improve their score
- Answering your FAQs about NPS benchmarking
What is a Good NPS score?
While your goal is to get to an NPS score of 100, that's likely impossible for a larger company and is an unrealistic goal to set.
With that in mind, finding the right comparable is critical. We can tell you that Bain & Co say your score should be above 50, but really this advice is unspecific nonsense.
What we can do instead is to offer four approaches to help you interpret and present your score back to your colleagues. Each provide a slightly different analysis, choose which is right for you—or, if it were me, I'd present all four and explain why the fourth is what really matters.
4 Ways to Answer "What is a Good NPS score?" At Your Company
Let's run through them:
Method 1 - Absolute NPS
- Method 1—Absolute NPS: Which uses unqualified NPS scores from all industries as a marker of good or bad.
Absolute NPS benchmarks look something like this:
If your score is below zero, that's "bad". The majority of your customers are having a bad experience—they're likely not referring you, are open to moving to a competitor at anytime, and cost more to serve through additional customer support interactions.
If your score is 0 to 30, that's "acceptable". Many of your customers have room for improvement in their experience but you're doing something right.
If your score is 30 to 50, that's "pretty solid". Your product generally delivers on its value and the majority of your customers are so happy they'd recommend you to a colleague—no mean feat.
If your score is 50 or more, "awesome!" This is where top brands for CX usually sit. You're verging on the unattainable and customer perception is hugely positive.
As you can imagine, this method is lacking somewhat. Firstly, everyone runs their NPS program slightly differently and every industry has different dynamics.
It's hard to compare apples to oranges—you might be top of the telecoms industry but still 50 points beneath Amazon.
Method 2 - Relative NPS
- Method 2—Relative NPS: Relative NPS leverages competitor benchmarks so you're one step closer to comparing oranges to oranges.
In most annual reports or investor presentations, we see them using a relative comparable. Do a quick Google search and you'll find presentations that show a company's NPS score compared to their industry peers, saying 'better than them!'
CustomerGauge Annual NPS benchmarks
Our annual NPS benchmark report surveyed thousands of companies about their NPS program. Use these industries as a relative benchmark for your company.
With a relative score to compare against, you're getting closer and closer to a comparable that makes sense.
But still, be warned, matching or beating industry benchmarks isn't the goal. The goal is to serve customers and drive revenue retention. If your largest customers are in the detractor or passive column, your "industry-beating NPS score" really just obscures the true problem.
Method 3 - Be Your Own 'What is a good NPS score' Benchmark
- Method 3—Being your own benchmark: The most accurate benchmark of improvement is your score last year.
Here’s a little trick companies are rarely aware of that can help them understand whether their NPS is good or not:
Is it growing? It is important to highlight the fact that too many companies treat NPS a “vanity metric”—focusing on the number, rather than reflecting on the story it tells about the health of the customer relationship.
The Net Promoter Score by itself is largely meaningless, unless you work on improving it. Assuming you survey customers every 6 months, then a good NPS is the one that is higher than the score you received during your last survey campaign.
“It’s not the score that matters; it’s what you do with it to make promoters that really counts.” - Fred Reichheld, Founder of NPS, Bain & Company
As such, the power of Net Promoter System is not only on measuring customer loyalty. Instead, the beauty of Net Promoter System is the ability to quickly act on customer insights and grow revenue through referrals and upsells.
Method 4 - Forget The Score Itself, Let Revenue Dictate Success
- Method 4—Letting revenue guide you: It matters more if your large customer accounts are detractors.
The most concrete, growth-focused understanding of Net Promoter comes when you tie your NPS survey results to revenue.
Let's take an example. Imagine you survey all your customers, calculate your NPS score and you get a score of 80. Wow, pretty high compared to others in your industry!
Your boss takes a look at your NPS score stats and say..."what does this mean? What is a good NPS score?". You say, "80 is fantastic. Amazon's only got 69."
And, then...your largest customer, responsible for 20% of your revenue, leaves you for a competitor. Your boss immediately asks how that's possible given your leading customer experience say's your industry leading.
Without digging deeper into exactly WHO is filling out your NPS surveys, you have a large blind spot. This is why you must tie revenue to your NPS scores and find out the answer to the most important question:
"What proportion of our current revenue comes from passives or detractors?"
(P.s. reach out to our sales team to find out how our product does that for you).
How to Achieve a Good NPS Score
There are three things that everyone should know about Net Promoter Score—and most don't.
Deep dive: How to improve your NPS system
1. To quote our VP of Education (Cary Self), "NPS is not a research tool, it's an action tool."
The beauty of the Net Promoter System is that it's simple. You can understand your customers and overall business health in just a handful of questions, asked quarterly.
However, most companies fail to take adequate action on the results of their NPS feedback collection. Analysis paralysis is a reality for most and actionable customer insights usually never find their way into the right hands.
Failing to setup a process in which your team acts quickly to both positive and negative NPS scores is a total waste, not to mention customer's problems remain unaddressed.
NPS comes into its own when used as a growth mechanism. Your NPS scores help:
1) Identify customers at-risk of churn (it's 5x cheaper to retain customers than acquire new ones).
2) Identify your champions (who are usually open to up-sales and referral business opportunities).
The magic happens not in the identification of detractors, passives and promoters, but in how you use that knowledge to secure business and activate referrals.
Our customers are often leaders in customer experience, sales enablement, customer operations and business transformation. If that's you, you need to make sure your teams act with speed and precision to close the loop.
When you survey your accounts and receive their feedback, you must act quickly. The opportunity to retain detractors or to activate (upsell or get a referral) from a promoter diminishes as more time passes.
2. NPS should be focused by customer revenue
Like in the SimpleWays story we told above, it's quite possible that the majority of your business revenue comes from a minority of large, affluent accounts (In most companies the Pareto 80/20 principle applies).
With that in mind, it makes sense to allocate your resources to customers in order of their importance. If every customer account isn't adding equal value, there's no reason you should treat them that way.
Tying each NPS survey result to the annual value of that customer always provides some interesting results.
For example, you could find that 25% of your revenue currently comes from accounts labelled as detractors. Furthermore, if you use follow up questions to identify which customer touchpoints are driving NPS scores, it'll be easy to know what issues to prioritise fixing.
In an NPS software like ours, you'll receive alerts when a proportionately large customer is a churn-risk.
And, my personal favourite feature, you'll understand the value of each CX driver. We'll let you know which drivers are responsible for the most "at-risk revenue."
Read more about monetizing NPS in our free book on Account Experience here.
3. NPS survey design is KEY to your success
Our deep experience in B2B Net Promoter Systems has brought us to these two conclusions:
- You must survey multiple layers of decision-maker and user. Within each customer account, there is more than one decider of your fate. If all of the frontline, mid-level and senior C-suite are influential, so survey as many stakeholders as possible. Someone isn't filling out the survey? Absence of engagement is a signal itself. Time to worry.
- Survey frequency has an impact on retention rate. Indeed, we have evidence that companies who survey customer's quarterly have the highest average retention rate.
Read more of our NPS survey design best practice here.
Our customer success and education teams work extensively with B2B customers to improve their Net Promoter programs.
You can learn more about NPS in our Academy video courses here.
How Account Experience Helps B2B Companies Get a Good NPS Score
Firstly, I recommend downloading our white paper on AccountExperience (AX).
Our AX methodology is a tried and tested blueprint that takes you from customer feedback to revenue growth. Building a platform around the AX methodology has earned us the #1 ranking by Gartner for B2B voice of customer platforms.
In short, if you want to achieve a good NPS score, and actually make the metric meaningful for your business' top and bottom line, then AX is the answer.
AccountExperience, or Monetized Net Promoter, is the process of operationalizing NPS survey feedback and scores so that you can:
Identify which of your accounts are about to churn. E.g. receiving advice like ‘based on your recent survey round $1.6m in revenue is indicated to be at-risk of churn. This includes your largest account with an ARR of $1m.’
Identify referral opportunities. E.g. receiving advice like ‘your customer, XYZ Corp, has consistently given you a score of 9 or 10. It’s time to ask them for that referral.’ (Learn how SmartBear got $6m in referrals using AX).
Identify which of your accounts are likely upsell opportunities. E.g receiving advice like ‘users at all levels of XYZ Corp’s organisation are extremely happy with your service. Your next review meeting is a good chance to focus on what’s next.’
Identify the drivers of bad NPS scores so you can improve them.
A monetized net promoter score is the next step after collecting NPS feedback: operationalizing.
We'll Help You Get a Good NPS Score
To actually stand a chance of improving your NPS score, you need to listen to each piece of feedback and take action upon it: either you talk to your unhappy customers, apologise and fix their issue, or you talk to your happy customers, celebrate together and ask for referrals.
AccountExperience is the methodology that helps you make the shift from ‘NPS is a research tool’ to ‘NPS is a growth driving tool’.
What is a good NPS score - FAQs
Let's take a quick walk through FAQs on this subject:
1. Is 70 a good Net Promoter Score?
Yes, provided your program is setup properly, 70 is a fantastic score. What do we mean by setup properly? Well, firstly, we suggest you don't rely on a sample size. Try to get full customer account coverage so your score is truly representative AND can be used to identify detractor or passive customers. After all, NPS is not the be-all and end-all, it is a research tool that should drive action that tackles churn.
2. What is a positive Net Promoter Score?
NPS is calculated by subtracting the % of detractors from the % of promoters. A positive score indicates that you have more promoters than you do detractors—congratulations.
3. What is a poor NPS score?
On an individual level, one contact or one account, a poor NPS score is anything less than a promoter. Both detractors and passives are at-risk customers—they're proven to be less loyal and more likely to leave you.
4. What's the impact of location on NPS?
The general industry thinking is that in Europe and Asia, customers tend to be more conservative with their ratings than in the USA.
For example, one of our clients showed huge swings in NPS scores from country to country. In Singapore the company has a 15 point lower score than their global average, and in the USA it's 10 points higher. This is despite the product offering being the same in both places.
Of course, we don't know for sure that location is the only influence here. It's quite likely that different countries have different needs and expectations from a product or service, so your offering just doesn't suit them.
5. What's the impact of industry on NPS?
Some industries appear to have a lower NPS score than others. It would be fruitless to compare your score to another industry or type of company.
If your NPS score is -20, it will be comforting to your team to know that the industry average is -20 as well. However, don't let that stop you. Just because everyone else is performing poorly doesn't mean you can, too.
Industries that rest on the laurels are ripe for disruption. Investing your customer experience is not only a way to stand out amongst your competitors, but it's a future proofing exercise.
6. How can I improve my NPS?
In our guide to improving your NPS score, we cover 10 key tips:
- Ask the right questions
- Add cascading questions
- Optimize survey frequency
- Choose the right channels
- Understand your competitors
- Benchmark your progress
- Tie NPS to revenue
- Close the loop
- Conduct root cause analysis
- Embed CX company-wide
Deep dive each of these tips here.
7. Why is NPS benchmarking important?
Benchmarking your NPS is a critical step to improving it. Firstly, knowing if your behind competitors is a great way to drum up support for your program, others will not want to fall further behind. With more support you can expand the influence of your CX program.
Benchmarking is also a key way to help others understand what you're trying to achieve. It contextualises your yearly results so that others know if you're doing well or not, and is a great starting point when explaining your CX plans and how they'll help improve that score.
8. How does NPS benchmarking work?
Did you know more than 7000 people search for "What is a good NPS score?" each month? It's one of the most common questions we get from our customers, too.
Because of that, we developed a benchmarking suite into our software platform at CustomerGauge. It allows you to compare your NPS score to others in your industry, region by region across the globe, and it verifies key data like number of survey respondents.
9. What’s the NPS for high growth rate companies?
Bain & Co suggests that NPS scores of between 50 and 80 are held by the fastest growing companies.
However, NPS truly drives growth when it is tied to revenue data. NPS is not a research tool, it's an action tool. It should help you identify opportunities for referrals, and identify which of your key accounts are about to churn.
When you tie NPS to revenue, your account management teams can quickly identify which customers need attention and how much revenue is currently at risk. You can then prioritize closing the feedback loop based on how important the accounts are to you.