Net Promoter Score Benchmarks to Help You Understand Customer Loyalty

 We've all heard the saying "the squeaky wheel gets the grease." And although we recommend visiting a mechanic over fixing your car with a can of grease, this expression still applies to your customers.

Customer reviews have a lot of power -- especially in the internet age, when recommendations and complaints can go viral on social media faster than you can say "the customer is always right."

Word-of-mouth recommendations -- and complaints -- are taken incredibly seriously by consumers. Recommendations from friends and family members are the most trusted source of advertising for 83% of respondents, and nearly 100% of customers surveyed said they trusted recommendations from other people -- even strangers -- more than content from brands.

Conversely, a Harvard Business Review study found 48% of customers who had negative experiences with a company told 10 or more people. And as it turns out, customers like talking about bad customer experiences more than good ones -- American Express's "Global Customer Service Barometer" survey found the average customer in the United State tells 12 other people about good experiences -- and 24 people about bad experiences.

If you're reading this and starting to panic because you have no idea what your customers think of your product or your service, remain calm. You just need a method to start surveying them and analyzing their reviews to determine how loyal and enthusiastic your customers are -- or aren't. That's where the Net Promoter Score® can help.

→ Download Now: Customer Service Metrics Calculator [Free Tool]

What Is Net Promoter Score?

The Net Promoter Score, or NPS, is a simple survey method to help you determine how loyal your customers are. NPS is a customer satisfaction metric that measures, on a scale of 0-10, the degree to which people would recommend your company to others. 

Surveying Your Customers

NPS is calculated by surveying customers and asking the question, "on a scale of 0 to 10, how likely are you to recommend to a friend?"

Once you've collected the answers to this question, you can categorize customer answers into three groups:

  • Customers who answer with a 9 or 10 would most likely recommend to a friend, so they are promoters.
  • Customers who answer with a 7 or 8 are neutral, so they are passives.
  • Customers who answered between 0 and 6 most likely wouldn't recommend to a friend, so they are detractors.

Tally up the total number of respondents, and then tally up the number of respondents in each category. Determine the percentage breakdown of each category. 

Calculating Net Promoter Score

Then, to calculate NPS, you subtract the percentage of "detractors" (customers who wouldn't recommend you) from the percentage of "promoters" (customers who would recommend you). Obviously, the fewer detractors, the better. Regularly surveying and evaluating the NPS for your business allows you to establish benchmarks so you can figure out how to improve the loyalty of your customers -- and, hopefully, generate more positive recommendations than negative reviews.

So, if you surveyed 10 customers, and eight were promoters and two were detractors, 80% would be promoters, and 20% would be detractors. The formula for your NPS calculation would be:

NPS = 80% - 20% = 60

Net Promoter Score by Industry

Context is important when it comes to most statistics and data, and NPS is no exception. The average NPS varies across industries, so it's important to consider the context of your industry when evaluating your own company's NPS. Below are customer experience management company Satmetrix's calculations for the average NPS, by sector, in the United States:

1. Department/Specialty Stores: 52

2. Tablet Computers: 52

3. Brokerage/Investments: 46

4. Online Entertainment: 43

5. Online Shopping: 43

6. Airlines: 39

7. Auto Insurance: 39

8. Credit Cards: 37

9. Laptop Computers: 36

10. Hotels: 36

11. Home/Contents Insurance: 35

12. Smartphones: 34

13. Banking: 34

14. Grocery/Supermarkets: 32

15. Cell Phone Service: 32

16. Software & Apps: 30

17. Shipping Services: 28

18. Life Insurance: 26

19. Drug Stores/Pharmacies: 26

20. Travel Websites: 18

21. Health Insurance: 14

22. Cable/Satellite TV Service: -6

23. Internet Service: -7


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