What Is a Good NPS Score? Industry Benchmarks & Tips for 2024
If you work in customer experience, you've no doubt heard about the Net Promoter Score or NPS. It's a powerful metric that seeks to supersede many other metrics, providing the perfect all-encompassing snapshot of your company's CX.
NPS is a powerful metric, but it's also full of nuance. NPS scores vary widely by industry, by geography and by the timing and placement of the survey question. While NPS can be a powerful tool, if used uncritically it can lead companies astray.
In fact, in a recent CX Lead survey of top CX professionals, 30% of respondents said that an over-reliance on NPS is one of the most common CX strategy mistakes.
So what's the real deal with NPS? What roles should or shouldn't it play in your CX strategy? Read on to find out!
Key Takeaways
- NPS (or Net Promoter Score) measures satisfaction by asking customers the likelihood they'd recommend the company to others. It categorizes customers into Promoters, Passives, or Detractors.
- Good NPS scores are relative and vary across industries, with benchmarks influenced by industry dynamics, market competition, and cultural norms.
- Improving NPS involves a customer-centric approach, leveraging feedback for improvement strategies, and employing service and industry best practices. The choice of NPS feedback software can significantly aid in the response management, analysis, and improvement processes.
Understanding Net Promoter Scores
NPS is not just a number; it’s a reflection of your customers’ satisfaction towards your brand. An NPS score is an (albeit imperfect) reflection of your company’s growth potential, as it measures the likelihood of your customers recommending your services to others. In the CX space it's probably the most significant metric. Millions of companies across the globe have incorporated it into their customer experience programs since its inception by Bain & Company in 2003.
But what makes NPS so special? It’s the simplicity of its approach and the depth of insights it provides. Unlike other customer satisfaction metrics, NPS doesn’t bombard customers with a long list of questions. It focuses on one key question, and categorizes customers into three large categories.
How Do NPS Scores Categorize Customers?
NPS responses categorize customers into one of three groups: Promoters, Passives, or Detractors. Each of these categories suggests a different level of customer loyalty and overall satisfaction.
Promoters are your brand’s ambassadors. They are the loyal enthusiasts who will not only continue buying from you but also refer others, driving the growth of your business. These are the customers who score a 9 or 10 on your NPS survey. Customer service agents play a crucial role in nurturing these promoters.
On the other hand, Detractors are unhappy customers who have had unsatisfactory experiences with your brand. They are likely to sway potential customers away from your brand through negative word-of-mouth. These are the customers who score between 0 and 6 on your NPS survey.
In between the Promoters and Detractors lie the Passives, who are satisfied but not enthusiastic about your brand. They are susceptible to competitive offers and are typically the ones who score between 7 and 8 on your NPS survey.
| NPS Score | Description | Business Result | |
| Promoters | 9-10 | Loyal enthusiasts who continue buying and refer others, driving business growth. | Drive growth through positive word-of-mouth and repeat business. |
| Passives | 7-8 | Satisfied but not enthusiastic, susceptible to competitive offers. | Neutral impact, at risk of leaving for competitors. |
| Detractors | 0-6 | Unhappy customers likely to deter potential customers through negative word-of-mouth. | Negative impact through deterring potential customers. |
Calculating Your Net Promoter Score
NPS is appreciated for its simplicity, even calculating it is very straightforward. Here's how to calculate your NPS:
Take your company's percentage of Promoters, and subtract from it the percentage of Detractors. The result, which can be either positive or negative, is your Net Promoter Score.
Remember, a good net promoter score is an absolute figure, not a percentage.
But what do these positive and negative NPS scores mean?
- A positive NPS indicates more promoters than detractors among your customers, which is a positive sign for your company’s CX and potential for growth.
- A negative NPS means you have more detractors than promoters, signaling potential challenges for customer retention and loyalty.
- The scale of NPS ranges from -100, indicating all customers are detractors, to +100, signaling all customers are promoters.
Industry-Specific NPS Benchmarks
Now that you understand what NPS is and how it’s calculated, you might be wondering, “What’s a good NPS score for my industry?” The answer to this question isn’t straightforward, as NPS benchmarks can vary significantly across different industries. These benchmarks can be significantly influenced by factors like:
- Industry maturity
- Economic events
- Dynamics of supply and demand
- Competitive intensity
- Regulatory environment
For example, the average NPS score for the Healthcare industry is 27. On the other hand, for Communication & Media, it ranges from -6 to 19. The SaaS industry average NPS is 36.
Top-Performing Industries
Some industries have been remarkably successful in achieving high NPS scores. The Insurance industry, for instance, leads the pack with an impressive average NPS of 80, far outperforming other sectors. Following closely are the Consulting and Financial Services industries, with NPS scores in the high 70s and 73, respectively.
The factors contributing to high NPS scores include overall CX, brand responsiveness, and consumer expectations.
Lower-Performing Industries
On the flip side, some industries struggle to achieve high NPS scores. The construction industry has seen a significant drop in its NPS in recent years, sitting at 37 in 2024.
Various challenges contribute to these lower NPS scores, including high market competition, low entry and exit barriers, and difficulties in retaining customers and fostering loyalty. These same factors are common to the SaaS sector.
Evaluating Your NPS Score
Regardless of your industry, evaluating your NPS score is crucial to understanding your customers’ loyalty and your company’s growth potential. They are typically defined as follows:
| NPS Score | Rating |
| Below 0 | Unfavorable |
| 0-19 | Good |
| 20-49 | Favorable |
| 50-100 | Excellent |
These are general guidelines, so remember: A good NPS score is always relative to industry benchmarks.
How can you make sure your NPS score is on the right track? Let’s take a look...
Comparing NPS to Industry Averages
One effective way to evaluate your NPS score is to compare it with industry averages. This relative method of NPS evaluation, known as relative NPS, is crucial for gauging your company’s performance against industry averages. Understanding where your company stands in the industry and what steps are required to surpass competitors becomes easier with this assessment.
Assessing Regional NPS Differences
Another critical factor to consider when evaluating your NPS score is regional differences. Cultural norms and practices can significantly impact NPS scores. For example, customers in Japan tend to give lower ratings due to cultural norms that consider it inappropriate to rate any business too highly or too poorly.
Such regional practices and cultural beliefs can significantly impact the way customers respond to NPS surveys, leading to variations in scores. Hence, it’s vital to benchmark NPS scores regionally to accurately evaluate NPS performance and address regional disparities.
Strategies for Improving Your SaaS Company's NPS Score
Understanding and evaluating your NPS score is the first step. But what next? How do you improve your NPS score? The key to improving your NPS lies in focusing on customer experience, leveraging customer feedback, and implementing NPS best practices.
Adopting a customer-centric approach is fundamental to improving your NPS. Designing surveys that are concise and distributed through customer-preferred channels can significantly enhance your NPS score.
Focusing on Customer Experience
A positive customer experience is the cornerstone of a high NPS score. This involves examining every aspect of the customer’s journey with your brand, from the first interaction to post-purchase support. Tools such as co-browsing and video chat, along with immediate live chat support, can enhance the customer support experience and result in higher NPS scores.
Meeting customer expectations and aligning with industry benchmarks is another key strategy to improve your NPS score. This involves making informed decisions about changes in organizational policy and product experience, considering everything from revenue implications to the mapping of the customer journey.
Leveraging Customer Feedback
Effectively collecting customer feedback is often the first step in improving your NPS score. The qualitative feedback obtained from surveys, and the resultant actions taken, are more critical than the numerical score alone.
Improving customer service and boosting your NPS score can be achieved by gathering customer feedback, conducting in-depth analysis, and identifying the root causes of poor customer service. NPS software can enhance this process by providing detailed insights, allowing companies to standardize measurement and promptly act on feedback.
Moreover, analyzing NPS survey responses can help predict customer churn, enabling companies to proactively address churn risks and improve customer retention.
Implementing NPS Best Practices
Along with focusing on customer experience and leveraging feedback, implementing NPS best practices is crucial for improving your score. To maximize NPS response rates, surveys should be concise, focusing on the overall feelings of customers about your company, and avoid any irrelevant demographic questions.
An effective NPS solicitation means reaching out through the customer’s preferred channel at an opportune moment without causing a disturbance with transactional inquiries. NPS analysis involves using customer experience surveys and NPS software to provide detailed insights, which allow companies to promptly act on feedback and standardize measurement.
Successful implementation of NPS best practices necessitates organizational buy-in, ensuring that improvement initiatives receive support from all levels within the company.
Choosing the Right NPS Software
In your journey to improve your NPS score, choosing the right NPS software is a crucial decision. Why? Because NPS software automates the creation, distribution, collection, and analysis of NPS surveys, enhancing the efficiency of customer feedback management.
NPS software not only assists in collecting NPS customer feedback but also helps in:
- Tracking the customer journey
- Analyzing NPS data to gain actionable insights
- Monitoring customer loyalty and satisfaction
- Improving customer service practices
- Refining products, services and pricing strategies
Case Studies: Companies with Exceptional NPS Scores
While understanding NPS and strategies to improve it are important, nothing beats learning from real-life examples. Companies with exceptional NPS scores serve as excellent case studies. These companies have not only mastered the art of measuring customer loyalty but also translated it into tangible growth and success.
Companies across a diverse range of industries, from financial services to technology and retail, have achieved exceptional NPS scores. Some examples include:
- Princeton Mortgage, with the highest recorded NPS of 98 in the financial services industry
- Metro Bank, with an NPS of 82
- T-Mobile, with an NPS of 82
- Warby Parker, with an NPS of 80
- Starbucks, with an NPS of 77
These case studies confirm the attainability of exceptional NPS scores and provide benchmarks for businesses striving to attain high customer satisfaction and loyalty.
Tesla
Among companies with exceptional NPS scores, Tesla stands out with an NPS score of 97 as of 2022. Tesla’s strong customer loyalty is evident from the fact that 97% of their customers are willing to recommend the brand to friends.
Ranging from its innovative products to its dedication to environmental sustainability, Tesla has struck a chord with consumers globally. The safety rating of the Tesla Model S, the swift expansion of its global supercharger network, and its promised autopilot technology have all contributed to its high NPS score.
Tesla’s customer-centric approach, including personalized ordering, delivery options, and the capability for remote software updates, further enhances its customer loyalty. All are reflected in Tesla's high NPS.
Amazon
Amazon is another company with an impressive NPS score. Amazon’s commitment to providing exceptional customer service and convenience is reflected in its strong NPS score of 73.
Thanks to its user-friendly website and mobile app, wide product selection, and reliable delivery, Amazon’s customer-focused approach has captivated millions of customers globally. The company’s innovative services, such as Amazon Prime and Kindle, have also contributed to its high NPS score, showcasing the company’s continuous effort to deliver value to customers.
How Is NPS Misused?
With all this talk about the benefits of NPS as simple gauge of customer sentiment and customer experience, it's worth remembering: NPS is NOT a magic bullet! As with all CX metrics, there's a risk that companies come to over-rely on NPS.
Melissa Henley is one of the top experts on CX in the SaaS space. We chatted with her on the potential downsides of relying on NPS.
"NPS can be a dangerous metric to focus on, as it represents a specific audience at a specific point in time. Imagine your company has changed its pricing strategy to appeal more to an enterprise audience to help your product move up market. That's great, but if you're sending NPS surveys to your large audience of existing single-user customers, you're likely to get negative feedback on the changes you've made."
"If you are blindly following the results and comments on your NPS survey, you're likely to assume your pricing strategy is a failure. It's not a failure - it's just not a fit for this audience. And it shouldn't be, because it wasn't designed for them!"
Our point isn't to discourage you from implementing an NPS program, but rather to remind you that it should be part of a balanced customer feedback system. So remember,
NPS is one barometer to look at in your overall customer health metrics. If you look at your NPS scores along with CSAT, churn, and NRR, you're likely to get a much more realistic picture of customer happiness.
Melissa Henley
Summary
Net Promoter Score (NPS) is a powerful metric for measuring customer loyalty and satisfaction. Understanding what constitutes a good NPS, comparing it with industry benchmarks, and employing strategies to improve it are crucial for any business aiming to enhance customer experience and loyalty.
While NPS software aids in this process, learning from companies with exceptional NPS scores provides invaluable insights. However, as we have learned, the journey to improving your NPS score doesn’t end with achieving a high score. It’s a continuous process of listening to your customers, learning from their feedback, and striving to deliver an exceptional customer experience at every touchpoint.
Frequently Asked Questions
What is an average NPS score?
The average NPS score can vary by industry, but for SaaS companies, it typically ranges between 30-36, with scores above 50 being considered excellent and above 80 being in the top percentile.
Is an NPS of 60 good?
An NPS score of 60 is excellent and very high in the industry. It means that your customers love your company and you have a lot of word-of-mouth references.
How is NPS calculated?
To calculate NPS, subtract the percentage of Detractors from the percentage of Promoters. This gives you the Net Promoter Score.
How can I improve my NPS score?
To improve your NPS score, focus on enhancing customer experience, leveraging customer feedback, and implementing NPS best practices.