MarketTools Blog

One of the questions clients focused on customer satisfaction and loyalty often ask me is “how do my NPS scores compare to others?” (For those unfamiliar with the term, NPS, or Net Promoter Score*, is a metric for measuring customer loyalty.  NPS is the percentage of  “Promoters”, or active, loyal customers likely to recommend your company, minus the percentage of “Detractors” who may spread negative word of mouth.) 

While NPS benchmarks by industry and best-in-class scores exist, there are really no better scores to benchmark yourself against than your own.  Really, the most important thing to remember is that you are looking for improvement.  When thinking about comparing your scores with other companies, please remember that there are many things that can affect your NPS score – including the industry you’re in, the type of products you sell, where you sell your products, who you sell your products to, the economy, etc. 

Also, remember that NPS is only a single metric, one of many that should be tracked and monitored to measure performance.  NPS should not be relied upon alone, any more than a pilot would rely on a single gauge in the cockpit to monitor his flight.  Use NPS in conjunction with overall customer satisfaction scores and other actionable measures (like detailed performance metrics, individual customers’ scores, etc.) to garner the greatest insights into your performance.

Based upon conversations with clients using NPS, I would suggest the following strategy for benchmarking NPS:

1)    Establish your own benchmark

• The only benchmark that is applicable for you is your own. Measure for a time period (a quarter, a year) and then set the average as your baseline.
• Set a goal for increasing your NPS score year over year. The important thing here is to improve.  Do not get caught up in determining by how much.  How much depends on several factors that are usually out of your control – budget, ability to make changes based on data, resources to affect change, internal company culture, economy, etc.
• Year over year, or rolling 6-12 months is the best way to trend, as you will most likely see dramatic changes in scores from month to month or quarter to quarter.  See point #2 below.

2)    Watch your mix

• Develop a sample plan that allows you to keep your survey population mix as comparable as possible from time period to time period.  For example, if 75% of the people you survey in  Q1 are in North America and in only 40% of the people you survey in Q2 are in North America, you will see dramatic differences in your trending.
• Typical things to think about when developing your NPS survey sample plan include:
  -    What type of people you are surveying?  Titles, positions, and other factors affect survey scores.
  -    Where are the people are located? Certain countries will typically not give high scores of 9 or 10 out of 10 when responding to surveys, so is NPS the right metric when measuring that region?  Whatever you decide, the mix of countries should be comparable.
  -    How long have your survey respondents been clients? If your Q1 sample is 75% customers that have been with you 3 years or more and your Q2 sample contains only 40% of customers that have been with you 3 years or more, this could dramatically affect your trending.
  -    Where in the survey are you asking the question? If you ask it at the beginning, you will get a higher response to that question, but only a “top of mind” answer.  If you ask at the end, you will get fewer responses to this question, but the responses you get will be more thought out after answering all the other questions.
  -    What languages did you use for the survey? If the survey was written in English and fielded to people whose primary language is not English, they may not truly understand the question.  When asking in other languages, it is imperative that the translation is done in a way that explains the question properly.

These are just some of the many things to think about when using NPS as a metric, but perhaps most importantly, don’t lose sight of the fact that there are many other metrics out there that may be more useful to your organization – stay tuned for further discussion on other useful metrics to consider.