What is a good NPS score and why is it important?
A good NPS® score is an indicator that your business is on the right track and that your customers are actually satisfied with your offer. But why does it matter?
One bad customer experience won’t only make you lose one customer. If that customer shares their unpleasant experience with friends or colleagues, or with the entire world on social media, you could lose a good number of potential customers.
Every company has to keep in mind that customer Feedback has become extremely powerful, especially in the age of the internet, when reviews and complaints can quickly and unexpectedly go viral on social media.
According to Temkin Group, 77% of customers would recommend a brand to a friend after having just one single positive experience.
While there’s no specific way to accurately measure word of mouth impact, your NPS score gives you an idea about whether your customers are talking negatively or positively about your brand.
First things first, what is NPS score?
Before getting into what a good NPS score is let me define NPS briefly.
It is a simple method that will help you determine how loyal your customers are.
It is often held up as the gold standard customer experience metric.
NPS is calculated by asking the customers the question, “How likely is that you would recommend our company to a friend or colleague?”
=> TIP: You can change “our company” in the NPS question to “our product” “our website” or any other aspect of your business that you would like the participant to rate. If you’re using Feedier, all you have to do is edit the NPS question and type the word of your choice.
The answers to the NPS question along with the NPS score will allow you to classify your customers into 3 categories:
- Promoters: Customers who answered with a score of 9 or 10. They are loyal customers who are extremely likely to recommend your brand.
- Passives: Customers who answered with a score of 7 or 8. They are considered neutral as they are satisfied with your business but not enthusiastic enough to tell other people about it.
- Detractors: Customers who answered with a between 0 and 6. These are dangerous customers because they are not only unhappy and won’t promote your brand, but they are also able to discourage others from purchasing your products. That’s why a good NPS score can make a big difference.
=> TIP: You can add search filters in Feedier that will allow you to see all your detractors (or your promoters or passives) at one glance along with all the answers that they gave to understand why you didn’t get a good NPS score and solve the issue instantly.
Straight to the point, what is a good NPS score?
NPS score ranges from -100 to +100, so you would assume that everything close to 100 is considered as a good NPS score and the closer you get to -100, the worse your score is.
That’s not completely true and not completely wrong either.
Let’s start with the general rule
A positive score is always a good NPS score, it means that most of your customers gave positive responses and a negative score means that you have more unsatisfied customers than happy ones.
- –100: Your customers are very unhappy with your business and wouldn’t recommend you to their friends or colleagues. All your customers are detractors. You should urgently do something about it.
- +100: All your customers are happy, your business is highly recommendable. All your customers are promoters, and all of them will happily recommend your brand to others. This is not just a good NPS score it’s rather a perfect one. Kind of the dream scenario.
- 50: In general, 50 is considered a good NPS score. This means that your customers are happy with your brand, but you need to make some extra efforts to increase the overall satisfaction.
- 70: This is an excellent score, your customers are quite satisfied with what you’re offering them. You should keep following the same path.
The more specific rule
In order to accurately know whether your score is considered a good NPS score or not, you should compare it to the average score in your field.
If it is above average, great job, you’ve not only made your customers happy but you’ve also created a competitive advantage for your company which is the the secret recipe of success.
If your score is below average, then there is still a lot of work that you need to do…
You may assume that the NPS averages are almost the same in all the fields. They are definitely not.
The highest score goes to Department/Specialty Stores as the NPS average is 52 and the lowest is for Internet Service: -7.
You can check the NPS average of your industry in the chart below:
Brands with a good NPS score:
- Tesla: Tesla holds an incredible NPS of 96, considering that any score above 40 is still considered a very good score, in auto-industry.
- Netflix: Netflix’s NPS is 68, well above their competition.
- Starbucks: An excellent NPS of 77
- Airbnb: A high NPS of 74
Last but not least, Net Promoter Score Calculation
The NPS is the difference between the percentage of Promoters and the percentage of Detractors. However, it is not expressed as a percentage, it is rather an absolute number lying between -100 and +100 as we mentioned before in the article.
For instance, if you have 50% Promoters, 35% Passives and 15% Detractors, the NPS will be +35.
Now that you have all the details from the NPS, you can learn how to improve your feedback reporting, taking instant actions.