It comes in many flavours but easily the most common Net Promoter Score question I get asked is:
How good is my Net Promoter Score?
The root of this question is “how can I benchmark my score”.
Unfortunately it is also the question with the answer that people want to hear the least: there are very few ways to really know.
While there are some reasonably comprehensive, multi-industry, NPS research reports unless your company is actually included in the study they are generally worthless in giving you a benchmark against which to measure your internally derived score.
The reason is quite simple. NPS can vary dramatically depending on a variety of factors and unless your survey process is the same as the benchmark’s process they are not comparable.
Don’t worry I’ll give you two good resolutions to this problem but first why, are those published data of so little assistance?
Public NPS Benchmarks Data Are Generally Not Comparable to You
Industry Sector Variations
As can be clearly seen by the chart below the NPS can vary dramatically between industries. With average scores for whole industries ranging between 10 and 60, if your industry is not specifically on the chart your chance of getting a viable benchmark are low.
Country and Culture Variations
If you are in an industry that is on the chart you might be thinking “great there’s a benchmark that I can use”. Not so fast.
NPS also varies by country and culture so even if your industry is in the benchmark, if your country is not in the benchmark it is of no use to you.
Don’t believe it? Check out the chart below for benchmarks for the same industry in different countries that we put together a couple of years ago.
Survey Administration Impacts
Terrific you are on the industry list and it shows numbers for your country – finally you’ve got your benchmark!
Probably not. Now the issue is that the survey administration process (telephone, internet, face to face) has a big impact on the score.
Research has been released on how scores change based on methodology. In their study Sam Klaidman and Frederick C. Van Bennekom identified that simply running the survey by phone versus email gave one company a 40 point (58 to 18) change in the outcome for the same customer set.
The implications of this are enormous. If you don’t run your survey the same way as the benchmark then the comparison is almost meaningless.
Companies Can Manipulate their Scores for Publishing
The scores companies publish in their press releases and on public databases can also be consciously or un-consciously manipulated. You won’t know when this happens so you won’t know if the published score is real or fabricated.
Below are some common manipulative practices:
Selective Sampling: Companies survey only satisfied customers to inflate scores, leading to unrepresentative results and a false sense of success.
Timing Bias: Surveys are sent after positive experiences while avoiding negative moments, creating an overly optimistic view of customer sentiment.
Incentivising High Scores: Offering discounts or rewards for favourable ratings distorts genuine feedback and reduces trust in the metric.
Pressure on Respondents: Employees may plead for high scores by linking them to personal performance or bonuses, introducing bias and ethical concerns, so called Score Begging.
Tying NPS to Bonuses: When employee compensation is linked to NPS, staff may manipulate responses or game the system, prioritizing scores over real improvements310.
There Are More
Actually there are even more elements that can impact on the score but I think you get the picture here.
External Benchmarks Don’t Tell You How to Improve
Also raised in a recent post on B&T (Why Australian Marketers Need To Evolve Their Scores) was the very good point that changes in external scores have as much, or more, to do with what other companies do than with what you do as a business to improve.
…Competitive NPS is a great brand tracker that can compare your position with that of your competitors, but there are factors outside of improving the customer experience that can cause fluctuations in NPS.
The point is made in that article that Transactional and Relationship NPS provide deeper insight into how the organisation should change and improve to lift customer loyalty. I agree completely with that assessment.
Solutions to the Net Promoter Benchmark Problem
So where to from here?
There are some real reasons why it would be good to know how your score stacks up relative to your competitors. The most important is that it has been found that your score relative to your peers is indicative of your relative revenue growth performance.
The further ahead of them you are the better your growth. So getting some type of benchmark is useful. The problem is knowing that, except in very special circumstances, published benchmarks are not very useful how can you proceed?
You have only two real choices.
1. Ignore External Benchmarks and Benchmark Internally to Your Own NPS
I tell customers that the most important Net Promoter benchmark that they have is their own score last month, last quarter and last year.
The whole purpose of this approach is culture change and continuous improvement.
So with that in mind, do you really care what other companies are doing?
If you’re ahead of them are you going to stop driving change? No.
If you’re behind them are you going to stop driving change? No.
So what does it matter where your competitors are sitting? Relax about external benchmarks and focus on improving your own change management processes. That is where most of the value lies anyway.
2. Construct Your Own Independent Survey
If you don’t buy the point above then you can always conduct your own independent Net Promoter benchmark survey. The steps are quite straight forward:
- Identify a set of your customers and your competitor’s customers. You will need 100 or more responses to aim for 500+ invites per company in the benchmark. If you are a large B2C brand this will be the easier as you can use survey panel companies to contact a large number of suitable respondents. On the other hand if you are a B2B player or a more niche provider that can be more difficult. How are you going to get hold of the 500 names and email addresses of your competitors customers? There are ways but you’ll need to bring in an external company to enable that to happen.
- Design a simple survey that includes the “would recommend” question
- Send that survey to the recipients and wait for their responses.
- Total up the answers.
Knowing that, this may seem like odd advice but before you run that type of study I recommend you focus on your relative scores.
Get them working and you’ll already be way ahead of most companies.
Get the Business Leader's Guide to Net Promoter Score Download Here
