2020 Indonesia Holiday Shopping Trends Report

Download Now

Net Promoter score: Industry benchmarks the factors that affect them

Tanuj Diwan
Apr 08, 2020

7 mins read

Tanuj Diwan

What is NPS?

NPS, which stands for Net Promoter Score is perhaps the best yardstick businesses have to measure customer and employee loyalty.

NPS is determined with the help of surveys that asks respondents (customers or employees) to rate the likelihood of referring the business/service/feature to their friends or family on a scale of 10.

Depending on the NPS score that respondents provide, they are segmented into three categories: namely promoters, passives, and detractors.

Also, the aggregated Net Promoter Score is also used to benchmark the business against its industry average and competitors. That brings us to the question: what is a good Net Promoter Score?

What is a good Net Promoter Score?

As a baseline number, any positive NPS is deemed to be good NPS. NPS is an absolute number between -100 to 100.

Any positive integer can be deemed to be a good NPS score since it indicates the overall positive sentiments of customers towards the business.

However, the average NPS varies significantly from industry to industry. So, what constitutes a good NPS score for the hospitality industry may not be applicable to the retail industry.

The macro and micro factors existing in each industry, the level of customer experience expected and provided, the size of the industry are some variables that make it difficult to have a common benchmark for a Net Promoter Score.

This also requires a business to monitor two variants of the NPS — absolute and relative NPS.

absolute NPS refers to the comparison of the score to a commonly accepted standard across all industries, including those in which the business may not be operating. The overall positive score refers to this category.

Relative NPS is one in which the comparison is made with other companies within the same industry.

For example, McDonald’s compares its NPS score with Burger King.

This gives more context since it helps the business identify with certainty whether the score is good or bad. Also, relative NPS gives more clarity on the company’s position. Here is how.

Let’s take the NPS score of two companies: A & B.

Company A may have achieved an NPS score of 50 while it might be considered the market leader in size or pioneer in innovation.

On the other hand, Company B may have achieved an NPS score of 60 whereas it is a startup that has just begun to grow.

So, it is better to go by the absolute NPS which compares the NPS score with the industry average.

Bird’s eye view of NPS benchmarks across industries

To get a brief idea of where your business stands in terms of NPS, you must know the industry benchmark. A good resource to go to for this information is the 2018 NICE Satmetrix Net Promoter Benchmarks (for US consumers).

The survey was conducted for 188 brands in 22 industry sectors covering a whopping 62,000 respondents. Based on the survey, the NPS benchmark was derived as under:

Net Promoter Score Industry Benchmarks

As is visible from the graph above, there are industries that have high Net Promoter Score benchmarks — like specialty store (62) where internet services have negative NPS (-1).

In fact, if you take a closer look at the lower end of the chart, it is visible that the industries are more or less essential services that we cannot go without a single day.

Banking, mobile apps, insurance, pharmacies, travel, TV, etc. Despite their importance in daily life, these industries have a low NPS score.

There are several factors at play that impacts the NPS of these industries.

Factors that influence Net Promoter Score benchmarks

Why do different industries have different Net Promoter Scores? There are inherent factors that create this variation in NPS. let’s take a quick look at them.

Market size & spread

The bigger the market size and geographical spread, the more varying would be the NPS score. A bigger market caters to customers hailing from diverse cultural backgrounds.

As a result, their responses to surveys, especially ones that have customer satisfaction as the central theme would be extremely different.

For example, European customers are a bit conservative when it comes to offering NPS score whereas US customers are generous in giving high NPS scores.

Also, bigger market size is difficult to tame. As a result, there will be more instances of customer complaints resulting in a dip in the NPS score.

Customer expectations

Customer expectations vary wildly from industry to industry causing a serious fluctuation in the NPS scores.

For example, customers have high expectations out of the restaurant and hospitality sector. They look for unique experiences in addition to great customer service.

However, in the finance industry comprising the insurance and banking sectors, the customer expectation would be centered around perfect customer service. As a result, the NPS scores that these industries achieve would also be significantly different.

Competitive forces

The level of competition involved in an industry also affects the NPS score drastically. A cut-throat competitive scenario would require businesses to innovate faster and better which would result in better customer service.

This should help lift the NPS score as well. On the other hand, a moderately competitive environment could slow down innovation or sustain the current level of customer service, which may not give a positive thrust to the NPS score.

Going beyond the Net Promoter Score Industry Benchmarks : How can SurveySensum help?

SurveySensum is an Artificial Intelligence-based NPS survey tool. It enables businesses to pick up real-time insights about customer and employee loyalty.

The insights so garnered can be used to steer the business operations that will maximize RoI.

Here are some of its critical features:

Multi-channel surveys

SurveySensum lets you send NPS surveys to customers through multiple channels. If you have a strong mobile app user base, you can use its in-app surveys to gather responses.

If you want to run NPS surveys through other channels like email or SMS or even offline channels like tablet devices, SurveySensum enables that as well. Further, you can also integrate the surveys with promo codes or coupons to incentivize the user to respond to the survey.

CRM integration

All the NPS responses (read: data) that you collect from customers must be put to good use, right? The best way to use that data would be to integrate them with your CRM.

This would give a bird’s eye view of the customer, their current business association (like plan or package) and also their sentiments towards the business.

Unified NPS view

SurveySensum comes with a customized dashboard view that gives you a quick glance at all the live analytical data.

Right from the current NPS score to the response rate for the ongoing survey, you will have all information readily available.

If required, you can also customize the dashboard further to create your own custom view with relevant data required for reporting.

Advanced filters

One of the key findings of NPS surveys is customer sentiments towards the business. The sentiments can be broadly classified into positive or negative.

With SurveySensum, you can quickly filter out customer response by sentiment and priority. Armed with such data, you will be able to make quick amends to the business process that will enhance your customer experience.

Text analytics

A significant amount of your NPS survey, especially the feedback section responses would come in the form of textual data. This textual data,

if analyzed deeply could reveal the customer’s sentiments behind it. SurveySensum enables the power of text analytics that will help you unearth hidden meanings from textual data.

Want to raise your NPS score beyond the benchmarks? Do that right with SurveySensum. Time to turn your customers into superfans


How much did you enjoy this article?