A young CEO was horrified with the hit her business took during the pandemic. Up until that point, she never really had given much importance to developing her brand’s identity. Her area of focus revolved mainly around improving the revenue and profit numbers.
Then, COVID-19 happened, and everything came tumbling down for her business. Even though the products were great, the sales dried up ‘cause customers didn’t have a connection with her brand. Hence, they had no issues disassociating.
She, in her process of revamping the business, wanted to know about NPS surveys, and one of her questions during the entire discussion was – “What is a good NPS score?”
We realized the generality of this question, and here we are getting to an answer and a lot more to help ambitious entrepreneurs and decision-makers like her and you!
NPS score breakdown — Promoters, Detractors, Passives
To start with, it’s crucial to understand the overall concept of NPS and the structure it follows.
The concept of a Net Promoter Score (NPS) revolved around measuring customer loyalty and brand advocacy, meaning understanding what the customers think about your brand and how highly they rate it.
It’s one of the simplest metrics requiring a simple question to gauge customer loyalty. That simple question generally is – On a scale of 0-10, what’s your likeliness of recommending our product/service to your family and friends?
The customers give their response to the question upon which they’re categorized into three groups;
The respondents giving a 9 or 10 to the question fall under this category. They are your most loyal customers and biggest supporters who’ll likely recommend your brand and its products/services to their friends, family, or colleagues.
Customers giving you a 7 or 8 fall into the Passives category. They’re not entirely happy or engaging with your brand, but they aren’t dissatisfied, too. And, as we’ll see going forward, there’s every chance of converting them into Promoters!
Then there are the Detractors. These are customers who’ve given a rating from 0 to 6. Why? One reason could be their unhappiness with your offerings. Another could be the lack of support to them from your teams. Price and discounts are a factor, too. And not having a brand identity sways away customers very quickly. Especially in this post-pandemic world.
Net Promoter Score Calculation. How To Do It?
You know the overall concept and structure of NPS now. So, what is a good NPS score, you ask again. We share your sentiment, but is it worth your time to know a good NPS score without knowing how to calculate it?
Sure, you can use SurveySparrow’s NPS calculator, but being the curious personas we are, surely, we’ll be interested to know the math behind this simple yet effective metric. That’s why let us quickly answer the ‘how to calculate net promoter score question,’ and we’ll get to the good part then (literally!).
Ok, let’s take a step-by-step process here:
- First things first, find the total customers who’ve responded to the NPS survey.
- After that, segregate the number of promoters and detractors.
- It’s time to find the percentage of Detractors now. For that, divide the total number of Detractors by the total respondents and multiply by 100.
- The next step involves doing the same for Promoters. Divide all promoters from the total respondents and multiply by 100.
- Subtract the percentage of Detractors from the percentage of promoters to procure the overall NPS. This is how the net promoter score calculation works.
So, the final NPS score comes from = % of Promoters – % of Detractors
To give an example, let’s say 150 customers responded to your survey, of which 70, 30, and 50 are the promoter, detractors, and passives split.
So, the percentage of promoters is 46.6% and for detractors is 20%.
Therefore the NPS is: 46.6% – 20% = 26.6%
Voila! Here you go! Your overall NPS is 26 in a range of -100 to 100. And it cannot be 26.6, as NPS is always displayed in whole numbers. It’s cinch stuff that way.
What Is A Good NPS Score?
First things first, there is no single answer to this question. If you’re using the Absolute NPS method, as you’ll see, to check if your NPS scores are good, then the higher the scores, the better they are. It’s as simple. So, a score of 80 is great, not just good, when calculated using the Absolute method.
Then comes the Relative NPS method, where a good NPS score is determined by the industry your business operates in. For more clarity and time-saving, we’ve contextually cherry-picked happening industries to emphasize further this method of looking at NPS scores. If you operate in any one of these industries and have a higher NPS score than the industry average, it’s a good score.
Here’s what we’re talking about;
- Hospital & Health Care – The average NPS of the Hospital and Health Care industry is 75. The main player in the industry is DPC Health Care, with an NPS score of 98.
- Computer Products & Network Security – 34 is the NPS benchmark for those in a particular industry. The highest NPS is 98, which belongs to Fractal.
- Marketing & Advertising – The NPS Benchmark for the industry is 44, while the highest NPS score, 82, belongs to Ruddocks.
- Accounting – The average NPS of the Accounting sector is 72, the highest being 93, owned by Equity Method.
- Apparel & Fashion – NPS benchmark of the industry is 72. The highest NPS score in the industry is Amour Vert’s, which is 88.
- Broadcast Media – NPS benchmark of the industry is 15, and the highest NPS score, 21, belongs to Univision.
- Building Materials – The sector has an average NPS score of 81. The highest NPS score is also 81 belonging to Cali Bamboo
- Education – The average NPS of the educational sector is 66. CrossKnowledge has the highest NPS of 93.
- Real Estate – NPS Benchmark of the real estate industry is 30. The highest score in the industry is 82 by Virtuance.
- Luxury Goods and Jewellery – The industry average is 45. Tiffany & Co. has the highest NPS score of 51.
You can also take a glance at the pictorial representation of NPS benchmarks by industries.
Absolute NPS vs. Relative NPS
The Absolute and Relative NPS methods are the two ways to figure out if an NPS score is good or not. One uses the aforementioned industry benchmarking, and the other doesn’t. And it’s really up to you to choose the method you wanna go with.
Let’s understand a bit more about the two before you make a decision here;
Absolute NPS Method
Using this method, if your score dips below 0, i.e., a negative NPS, means you have more detractors. In that case, a majority of your existing customers won’t prefer recommending your brand.
This method takes the absolute numbers purely into account, making the negative NPS scores a sign of more detractors and a score of 50+ is a sign of more promoters. Anything in between means that you have a majority of passive customers.
Relative NPS Method
Using the Relative NPS outlook, comparing your brand’s NPS score with relevant industry benchmarks becomes the key to deciding if the NPS score is good or not compared with competitors. Simple and straight, what say?
NPS Survey — How To Make & Analyze It using SurveySparrow?
After having covered the major as well as the interesting topics, this is what remains – How to make and analyze an NPS survey using SurveySparrow?
Why SurveySparrow? Well, ‘cause it offers the most robust and powerful NPS feedback software to collect ratings from your customers and calculate NPS proactively. Read this success story to know how exactly can it help your company.
And now, here are the steps for creating a net promoter score survey using SurveySparrow:
Step-1: Click + New Survey on the top right corner of your survey dashboard and select NPS Survey.
Step-2: Modify the survey title and click Next.
Step-3: You can edit your NPS question to add variables like contact details or custom variables. Do this by adding the dollar sign($) next to your question.
Step-4: You can customize the label texts and enable the option of segmenting your scale to mark promoters, passives, and detractors. The colors are customizable, too.
Step-5: For the open-ended follow-up question, edit as required and use question piping to pipe the respondents’ NPS scores into the question.
Step-6: Enable the ‘Question Text by Rating’ option to send individual follow-up questions to Promoters, Passives, and Detractors.
Step-7: Click +Add New to add more follow-up questions to your survey. Pick from the Multiple Choice, Rating, and Text question types.
Step-8: Add a Thank You page to your survey and personalize it using custom variables, if you’d like. That’s it! You have now successfully created your NPS survey!
Step-9: Share it with your customers, and once all the responses are populated, head to the Results section and select the Overview tab. You’ll see the NPS score at the top.
After getting all the scores, here’s how you can analyze them using different options using SurveySparrow’s NPS solution;
Step-1: Under Overview in the Results section, you’ll see a trend of NPS responses over time. Adjust this trend to show daily, weekly, monthly, quarterly, or year-long responses.
Step-2: Widgets help you dissect your data better and gain deeper insights into the business. Select any of the widgets by merely clicking on the box or the Add Widgets button. Read this to know more about it. And for the time being, here are the widgets we have;
- Gauge Chart
- NPS Comparison
- Word Cloud
- Trend Graph
NPS Best Practices To Follow In 2022 And Beyond
Now you know how to create and analyze NPS surveys fast and efficiently, but are there some best practices to follow, too? The answer is yes, and here’s what we have in the bag for you;
- Personalize your NPS survey to make it more friendly and inviting. This increases the odds of customers actually filling out the survey with intent and being honest about it. Start by mentioning your customer’s name, especially first name, within the starting sentence itself.
- Send NPS surveys in real-time for customers to feel inclined to fill them immediately. This small practice reduces the risk of negative sentiments from them and ensures the most authentic feedback.
- Ask more probing questions to go along with the standard NPS questions for granular insights on specific business issues. This allows you to dig deep into the ‘Why’ behind every customer rating giving you the areas for product/service improvements.
- In 2022 and beyond, it’s pivotal to make your NPS surveys mobile-friendly and simple, that’s intuitive with a visually compatible design.
- The email you send along with the NPS survey link has to be crisp and short. This will make sure the respondents actually open the survey and take it.
- Be trustworthy and professional in the way you approach the customers for NPS surveys. Adding your company’s logo and address goes a long way in doing that.
- Lastly, add follow-up questions to your NPS survey. That makes sure customers give you detailed and open-ended feedback. Questions like – ‘Just curious! Why did you give us this score?’ or ‘Awesome, please tell us the reason for this rating?’ – works best.
Extremely Common (Yet Important!) NPS FAQs
Before we wrap up on this ‘what is a good NPS score’ article, here are the common yet crucial NPS FAQs you should know the answers to;
#1 How accurate is the Net Promoter Score?
Very. Net Promoter Score was developed after testing various questions to find the best aligned with customer loyalty. It was further developed and eventually trademarked by Fred Reichheld and Bain & Company. And many argue that it is by far the best customer loyalty metric in the market and the most accurate one, too.
#2 Do I need to send the NPS survey after every purchase?
No, if you want to understand your brand’s customer loyalty, sending an NPS survey every quarter or every six months works best. However, an NPS survey after every purchase will work if you want to know their loyalty towards a specific product.
Generally, NPS is meant for gauging customers’ loyalty to your brand. Hence, sending it out after every purchase would be an overkill without giving grand results. Stick to a definitive timeline of 3,6, or 12 months for these surveys to work best.
#3 Is Net Promoter Score a percentage?
No – Rather, NPS is the difference between two percentages (percentage of Promoters less percentage of Detractor). It generates a score between -100 and +100, based on the size of your promoters and detractors compared to the overall survey takers, but it’s not a percentage.
#4 Is it easier to convert a Detractor or a Passive to a Promoter?
Well, that’s debatable. But from our experience of having conducted hundreds of NPS surveys, we would say yes. It is easier converting a Passive to a promoter compared to a Detractor. Because passive customers aren’t dissatisfied with your brand like the Detractors are, they will come along to be your brand’s Promoters if you start engaging with them the right way.
Although, the risk of never hearing from a Passive customer is also real, which makes people state that Detractors are easier to convert than Passive customers, ‘cause they stick with your brand and give you a second chance.
#5 Is an NPS score of 70 good?
As we mentioned, the answer to ‘what a good NPS score is depends on your company’s industry. So, an NPS score of 70 is outstanding if yours is a real-estate entity, and alarmingly low if you’re in the hospitality business. The industry benchmarks bring more meaning to your NPS scores, and rightly so.
The Ball’s In Your Court, Really!
If you do build a great experience, customers tell each other about that. Word of mouth is very powerful. – Jeff Bezos
Ain’t Jeff completely right here? Customers do tell each other about their fantastic experiences with a brand. And an NPS survey is how to know about that. Organizations, however, score very low NPS. Why? Well, because they don’t even bother conducting timely customer loyalty checks. Like our ambitious woman entrepreneurs from the intro., they’re busy thinking about sales and profits.
It’s crucial, we get it, but so is your brand’s identity that a customer can relate it. Otherwise, a mere transactional customer relationship won’t give your business the wings of sustained growth. As NPS survey isn’t the solution to all your customer loyalty problems. It’s a way of getting to the solution, especially in this much-changed post-pandemic world.
Here’s hoping you make full use of this metric. For any help, literally any help, we’re here 24/7. Keep growing!