Yet, the NPS is much more than just a measurement of customer loyalty. It’s a tool you can use to see how you rank among your competition. For example, if out of 10 competitor’s you’re at the top, great. But, if you’re below anyone, there’s always room for improvement.
You can use the industry comparison to drive your business to the top.
In this article, we look at comparing your industries’ NPS and what it means for business.
What is a Good NPS Score?
Let’s break down the score and see what’s actually a good score. First, any score below zero is a bad score and means you’re in big trouble.
Next, if you score between 0 and 30, that’s a good starting point. You’ve got a lot of room for growth, but things look okay.
If you score higher than 30 but less than 70, you’re doing terrific. Rest assured that the majority of your customers are happy. But, does this mean there’s no room for improvement? No, you do have room to grow.
Finally, if your NPS is higher than 70, you knocked it out of the ballpark. You can assume your highly loyal customers are sharing their good news with all of their friends, family, and co-workers.
Let’s take the example of business A that has a NPS score of 0, and business B that has a NPS of -30. Is business A doing better than business B? Of course. But, in the scheme of things, neither of them can rest on those scores.
While it is nice for business A to know they’re on top of their competition, it’s not going to be good enough. Both businesses will want to improve their customer experience in order to improve their scores.
It is worth noting, though, that you want to be aware of your industry benchmarks because there are some industries that could never realistically reach that 70 mark because no one does. For example, the internet service industry average benchmark is two.
Benchmark Net Promoter Score
You want to compare more than simply numbers. You want to compare your score to the score of your competition.
You can see industry benchmarks, so you know what to compare your number against. Without knowing your industry average as well as the scores of your competition, it’s hard to gauge your standing.
To accurately measure your score, you want to compare it with your industry and your direct and indirect competitors.
When your score is consistently higher that that of your direct competition, you can count on business growth.
To help you, here are a few industry average benchmarks:
- Automotive dealers: 32
- Major Appliances: 31
- Computers and Tablets: 8
- Investments: 30
- Grocery Stores: 20
- Insurance: 19
- Hotels: 4
- Retailers: 1
- Fast food: -1
- Credit Cards: 13
- Utilities: 5
- TV Service: -5
Where does your business fall in this list? If you fall under retailers, again, you’ll want to consider things such as your size (don’t compare yourself directly to the Gap if you’re a small boutique), demographics, and region.
Industry Average Comparison
Let’s say you are a toy manufacturer. If you want to understand your NPS, you want to first compare it with the average scores in your industry. Then, compare to your direct competition.
This allows you a better marker than comparing it to what experts agree is a “good” score.
You also want to consider your market. Are you an online retailer, or do you sell in a small town or a large metropolis? Some markets have a more positive image than others, so be sure you are comparing against the right set.
In addition, just compare yourself to other toy manufacturers. It doesn’t do you any good to compare yourself to restaurants.
The Regional Comparison
We’ve mentioned that the NPS can vary greatly by industry, but they also vary by region. You might expect a toy company in New York City to have a vastly different NPS than a toy company in a small town in North Dakota.
Different areas of the country are populated by unique demographics. Make sure you know these differences before looking at industry benchmarks.
Your Survey Channel
Another factor that can affect your NPS is your survey channel. It pays to know if the channel you are using is similar to that of your competitors.
Try to conduct your NPS survey through the same channel as the competitor you want to benchmark so you’ll have something static to base your results on.
As you compare your industries’ Net Promoter Score (NPS), you want to keep one thing top of mind: your “good” number is the number that’s better than your previous score.
For most businesses, this is the most important benchmark. Over the course of your NPS surveys, you want to ensure continual improvement.
For example, if you survey customers four times this year, make sure you increase each time. If this is happening, you’re doing great. You can then look at industry benchmarks and comparisons.
If you’re not improving, your company most likely isn’t growing. And, whether or not your score is higher than your competitor’s, if you aren’t scoring better, you’ve got a lot of work to do.
Use your NPS score to drive growth and encourage customer loyalty. Continue on an upward trajectory, and you’ll soon naturally rise above the competition.