Net Promoter Score

What is a Good Net Promoter Score: Calculation, Good NPS & NPS Benchmarks

Mar 29, 2023

9 mins read

Manisha Khandelwal

With simple questions like – “On a scale of 0-10, how likely are you to recommend our product to your friends and colleagues?” 

NPS aims to unravel customer’s sentiments. You can receive a score of 35 or 50 or 63 which determines how happy or unhappy your customers are.

But how can you know if is it a “good” or “bad” NPS score? 

Scroll down and find out. But for that, we must first understand how NPS is calculated

How to Measure Net Promoter Score?

The image shows the net promoter score formula. Here NPS is calculated by subtracting the percentage of promoters from the percentage of detractors. % of promoters - % of detractors = NPS score.

To calculate NPS score, whether you are using an 11-point or 5-point NPS scale, all you need to do is,

STEP 1: Ask your customers how likely they are to recommend your product to others.

STEP 2: Then, categorize their responses into promoters (9-10), passives (7-8), and detractors (0-6).

STEP 3: Subtract % of detractors from % of promoters. This is the foundational NPS formula. Now, the NPS score can be anywhere between -100 and +100.

STEP 4: At last, benchmark your NPS score industry average.

Or instead, use the NPS calculator below. It’s totally free!

However, you don’t necessarily need to go through the process of calculating and analyzing the NPS score, all you need is robust NPS software.It updates scores in real time and offers detailed insights on a user-friendly dashboard.

→ Here’s a list of top NPS tools that can help you with it.

NPS Breakdown – Promoters, Detractors & Passives

Here’s a breakdown of the Net Promoter Score.

  1. Promoters: These are customers who rate your product or service highly, giving a score of 9 or 10 on the NPS scale. They are extremely satisfied with their experience and are likely to become repeat customers or even brand advocates.
  2. Detractors: These are customers who rate your product or service poorly, giving a score of 0 to 6 on the NPS scale. They are dissatisfied with their experience and may have encountered issues or problems with your product.
  3. Passives: These are customers who give a neutral score, rating your product as 7 or 8 on the NPS scale. They are neither strongly satisfied nor dissatisfied with their experience.
→ Know when to send an NPS survey to generate responses!

Now that you know your NPS Score, what is the next step? 

To understand if your NPS score is good or bad? If it is 73, it is surely a good number. But what if your NPS score is 28? Is it bad? Not necessarily!

But wait, before we explore what is good NPS score, let’s first explore the two ways of approaching a good NPS score.

Absolute and Relative NPS

To determine whether your NPS score is “good”, there are two ways of thinking about your NPS:

1. Absolute Method

Absolute NPS refers to the straightforward calculation of NPS based on the percentage of promoters, detractors, and passives without comparing it to any external benchmark or industry standard. It focuses solely on the raw score derived from the NPS survey responses within a specific timeframe or among a particular customer base.

2. Relative Method

Relative NPS involves comparing your NPS to external benchmarks such as industry standards, or previous performance within your organization. It helps businesses understand how they stack up against others in the market and identify areas for improvement or competitive advantage.

An NPS score can be considered to be good only if it matches the industry average or exceeds it. If your NPS score is equal to or more than the industry average, it indicates that your customers are loyal and are willing to refer to new customers as well.

Absolute NPS: What’s a Good NPS Score?

As a thumb rule, if the NPS score is less than 0, it is a cause for worry as it is a negative NPS score. And an NPS score above 0 is considered okay as it is a positive NPS score, but it still has some further categorization, let’s take a closer look.

  • NPS of 50 or Higher: This is often considered excellent and suggests that a company has a strong base of loyal customers who are highly likely to recommend its offerings to others.
  • NPS score ranges from 30 to 49: This range is still regarded as good, indicating that the company has a solid foundation of satisfied customers who are generally willing to recommend it.
  • NPS between 0 and 29: While positive, this range suggests room for improvement. It signifies that the company has more satisfied customers than dissatisfied ones but may not have fully tapped into its potential for customer advocacy.

 

Launch, analyze, and extract actionable insights from your NPS program with SurveySensum’s NPS experts!

 

Relative NPS: What’s a Good NPS Score?

Your NPS score is relative. There are a lot of factors associated with it. This is why NPS benchmarks by industry become important.

Here is a study of NPS benchmarks that reveals the average NPS score of different industries in 2024.

The image shows the average NPS score of different industries in the B2B sector.

The image shows the average NPS score of different industries in the B2C sector.

*Source: Retently 2024 NPS Benchmarks for B2B & B2C

 

Analyze and benchmark your NPS with SurveySensum’s NPS experts and stay ahead of the competition!

 

How to do NPS Benchmarking?

Here are the 3 proven ways of NPS benchmarking.

Compare With the Industry Average

As we said earlier in this blog, NPS is more of an industry-specific metric. So it makes sense to look at the industry average and where your NPS stands in relation to that.

It is also recommended to benchmark your NPS score against that of competitors. This method of relating an NPS score to the industry average and competitor scores is referred to as the relative method of benchmarking.

For example, in the US, the average NPS score of Health Insurance is 48. If your business is in the same line, then your NPS score should ideally be more than 48 or be in this range to be considered a good Net Promoter Score.

Compare With the Regional Average

If you are a global business, by now it would have been evident how regional differences and cultural values affect consumer decisions.

To cite an example, US customers are willing to pay a premium price for high-end trending products. Whereas, their Asian counterparts would prefer budget-friendly products that serve the purpose and have reasonable durability.

The same attitude spills over to NPS survey responses as well. The scores that customers give will be largely influenced by regional practices and cultural beliefs.

To repeat the same example of US and Asian customers, US customers are generous when it comes to giving 5-star reviews or high NPS scores. Asian customers expect extremely impressive products/services to give a high NPS score.

As a result, there will be regional imbalances in the NPS score as well. Hence, a need to benchmark NPS and compare it on a regional basis.

Without regional benchmarking, you might end up evaluating an average or Good Net Promoter Score as bad.

Compare Scores By Channels

NPS surveys are sent through diverse channels like email, social media, mobile apps, SMS, and so on. The survey response is bound to vary due to various factors.

For example, NPS email surveys usually get high responses since customers find them to be non-intrusive. Also, it is easy to fill up an email survey since it gives enough buffer time for the customer to think and update.

Other channels like SMS and in-app surveys lose out on these. However, they have their own pros and cons, which further influence the NPS scores.

In-app surveys are contextual and hence drive accurate responses, although the NPS response rate could be low.

These differences mean that the business has to populate the NPS score from various channels and compare them side-by-side to arrive at a benchmark score.

 

Step-by-Step Process on NPS Benchmarking – Download Now!

How to Improve Your Net Promoter Score?

NPS is a complex metric that differs from industry to industry based on what services you provide or products you sell. Your NPS score will tell you about all your customers’ negative and positive experiences. Though there are several tips to improve your NPS, we list down only the most important ones here. 

  • Collect NPS feedback at the right time
  • Use aesthetically pleasing survey designs
  • Include visual cues for a better understanding
  • Close the loop immediately and inform them
  • Identify reasons that fail you and areas where you excel
  • Improve operational efficiencies and performances
  • Segmentize low-score areas and give special care
  • Train staff to offer better customer support
  • Offer consistency and special care on common NPS issues
  • Run NPS surveys at regular intervals to check the progress
  • Avoid NPS gaming to ACTUALLY make a difference.
Suggested Read: Read more on what NPS survey questions you should ask in your next NPS survey

But to achieve all of these, an efficient NPS software, designed to evaluate both 11-point and 5-point NPS scales, is required to help you create NPS surveys and launch them at the right touchpoint and at the right time. Also, the tool helps share alerts to the team when a detractor shares their feedback and analyzes all the feedback.

Conclusion

NPS methodology is indicative of customer satisfaction and loyalty, reflecting positively on a company’s performance and reputation. However, while a good NPS is a valuable metric, it should not be the sole measure of customer experience or business success. Businesses should complement NPS metrics with other CX metrics such as CSAT, CES, etc to gain a comprehensive understanding of their customers’ needs and preferences. 

Now, gaining insights is just the beginning, you need to analyze and extract actionable insights from this feedback to improve customer retention, and to do that you need a robust customer experience management tool like SurveySensum. With this tool, you can run text and sentiment analysis on the gathered feedback and automate the process of extracting valuable insights. This tool will also present a detailed report on your promoter and detractors and with the help of the CX experts, you can analyze this data better and derive an action plan to boost your business growth.

Manisha Khandelwal

Senior Content Marketer at SurveySensum

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