Benchmarking Net Promoter Score (NPS) and factors affecting it

Net Promoter Score (NPS) Benchmarking

As we discussed in the previous blog, net promoter scores vary by market and industry, and you can never be sure what is appropriate for your industry unless you look at your competitors. In fact, some markets will never exceed a NPS score of 20. So, how do you benchmark your net promoter score?

• Comparison You must select the relative method, which entails examining the numbers as an agreed-upon standard in your industry and among competitors. This enables you to understand what constitutes a good nps score in the market. Your NPS score will vary depending on the market in which you work. A retail store is more likely to make people happy than a finance company. As a result, a retail store is likely to have a higher NPS score than a finance company. You must compare yourself to people in your market rather than a company outside of your market. According to one leading company, Verizon's NPS score dropped to 19 in 2019, which may appear to be extremely low. It was, however, the highest in its industry and was only defeated by AT&T Fiber in the ISP industry by a score of 20 in 2020. If your goal is to identify your company's strengths and weaknesses in order to improve customer satisfaction, customer journey, and customer needs, you may also want to conduct a competitor analysis.
• Regional Comparison Because your geographical location is important, you should compare your NPS score not only by industry but also by location. Cultural differences are important. Some places vote in extremes, while others do not want to give you the short end of the stick, which is perfectly fine. It should, however, be remembered so that it does not cloud your judgement. When throwing in 9's and 10's, Europeans tend to keep their fists a little tighter. Even when they are completely satisfied, they tend to stick to the middle values. It is considered bad etiquette in Japan to rate someone too poorly or too highly; they also adhere to the middle values. Americans, on the other hand (America being the origin land of the NPS score), are more likely to give you either of the extremes when satisfied or dissatisfied. According to an industry leader in NPS, the United States, Brazil, India, Indonesia, and Mexico give a median response of 9 when satisfied with a company, whereas South Korea and Japan record similar satisfaction with 7 and 6. CheckMarket even suggested that a new European scale for NPS be developed, with 8s also considered Promoters.
• Survey Channel Larger companies have the financial stability to pay for an outsourced survey, whereas smaller businesses typically measure NPS on their own, which can result in a significant difference. Larger companies may conduct surveys and collect data through various channels such as e-mail, in-app, SMS, and so on. In many cases, approach, outreach method, cost, and demographics can all contribute to a company outperforming you, even though web surveying appears to be the channel from which every company makes most of its decisions. When comparing your scores, ensure that your competitor is using the same methods as you. For example, if you rely on a web survey, which is obviously less interactive, cost-effective, and intrusive in nature, an on-the-call survey with direct human interaction where a customer may provide more positive insights to the agent will outperform it. So, in order for you to know where you stand, your benchmarked competitor must use the same methodology as you.
• Individual benchmark "You are your own adversary." You must consistently beat your own score. Every time you finish calculating your NPS score, you should see a 5% – 10% increase in your score. You should be able to identify what needs to be improved and work accordingly to achieve the best results for your company! An increase simply means that your customers' needs are being met, which is exactly what you should aim for.