ByBack in 2003, a metric was introduced in the business world that we today know as NPS. Net Promoter Score is one of the simplest metrics used to gauge customer satisfaction and loyalty.
As we mentioned in its simplicity, this metric involves only a single question and a rating scale to answer that question. That’s the reason why most people respond to this survey. Moreover, those who respond are divided into promoters, passives, and detractors. Finally, subtracting the percentage of promoters from detractors gives us an NPS score.
While this score tells a lot about a business, comparing it to the NPS benchmark makes it even more comprehensive. Benchmarking the score helps businesses evaluate their performance, identify the room for improvement, and tell where they stand in the industry. So, in this blog, we will understand what NPS benchmarking is and how it helps businesses.
What are NPS Benchmarks?
NPS benchmarking is a frame of reference for understanding your performance based on net promoter score. No single score can be set as a good score for all the existing industries. That’s why each Industry has its own NPS benchmark, which can be used to determine whether it is underperforming or overperforming.
For instance, the digital marketing industry has an NPS benchmark of 60, and the internet software and services industry has a benchmark of only 4. So, there can be a drastic difference between net promoter score benchmarks of different industries. It is one of the reasons why benchmarking is important. Let’s see some of the benefits below:
It helps you to set realistic goals that you can achieve. Being known to your Industry’s score lets you plan your actions to chase the benchmark, which is true for your Industry.
It helps you evaluate your business’ performance against the whole Industry. You can know how good or bad you are doing in your space.
When you track your Industry’s net promoter score benchmark, you can also discover industry trends, such as customer sentiment changes, and adapt strategies accordingly.
These are the benefits of NPS benchmarking. Let’s now examine industry-wise benchmarks of some popular industries.
Here are some industry benchmarks of NPS Scores:
- B2B Software and SaaS: 40
- Healthcare: 46
- Financial Services: 73
- Insurance: 80
- Construction: 37
- Technology and Services: 61
- Consulting: 76
- E-commerce: 52
- Retail: 64
- Logistics and Transportation: 40
However, NPS is a relative metric, which means you must measure it from time to time to know how much improvement you have made or if it is still falling. To do that, you simply need to measure your score and compare it to the benchmark. If you find it lower than the benchmark, then take action and measure the score again to learn about your progress. But that gives birth to a new question: how can you improve your net promoter score? So, let’s talk about that now.
Actionable Strategies to Improve Your Net Promoter Score
- Listen to Customer Feedback
The best way to improve your score is to understand the actual problems that your customers are facing. Moreover, to understand these problems, you should gather their feedback. Keep sending them NPS surveys from time to time and also use open-ended questions to get detailed feedback. It will help you understand the real issues affecting the customer experience.
- Act on the Feedback
Now, when you take feedback from customers, also make sure to close the loop by acting on it. Find the trends in the collected feedback to identify the issues bothering a large number of customers. Plan your actions and objectives. Lastly, implement your plan to solve those issues.
- Improve Customer Experience
CX plays an important role in improving net promoter score. It ultimately measures customer satisfaction and loyalty, which are factors directly influenced by the CX. So, improving it will absolutely improve the NPS-related factors, too.
- Turn Detractors into Promoters
Categorizing detractors doesn’t mean that you suppose them as the customers you lost. There are still chances to pull them into your business again. The only thing you need is a detractor-centric strategy. Simply pay attention to their issues and work on them to make improvements. Once you are done with the improvements, inform us about your changes. It will improve your promoters vs detractors ratio, ultimately leading to a better NPS score.
- Reward Your Promoter
There’s no doubt that your promoters are happy with you, but that doesn’t mean they need no attention. Keeping them in the state of being promoters is important as if they turn passive or detractors, it will impact your NPS. Rewarding your promoters is how to keep them as promoters and ensure stability.
- Follow Up on the Passives
Lastly, many businesses ignore passives because they are mostly not involved anywhere in the calculations. But, if you think logically, turning your passives into promoters is probably easier than turning detractors into promoters. However, they may also turn detractors since they are standing in the middle ground. So it’s a 50-50 situation where it’s undoubtedly better to feel their issues and turn them into promoters to improve your NPS.
Key Takeaways
- Net Promoter Score is a simple metric to gauge customer satisfaction and loyalty.
- Benchmarking NPS is beneficial to set attainable goals and perform performance evaluations.
- The best way to improve it is to work on customer experience and listen to and act on customer feedback.
- Categorising promoters, passives, and detractors and creating personalised strategies for them also help enhance the score.
However, as discussed, NPS is a relative metric, so updating it is important. In this, QDegrees Services can help you a lot. It is an all-in-one tool for sending surveys, measuring NPS and other metrics, and giving you actionable insights. With its dashboard and analytics, you can look at your promoters and detractors more comprehensively. So, it makes it easy to create personalised strategies and find issues affecting your customers’ experience.
