We are often asked what a good Net Promoter Score (NPS) is or what the NPS is of companies in similar branches. One way to find out is through NPS benchmarking. Benchmarking in general means that you compare your business to other companies in the same industry to analyze how your organization is developing in comparison to your competitors. You can do this with NPS by comparing your company's NPS with the NPS of your direct competitors. One way to do this is through yearly recurring NPS benchmark reports. Reports for which you often have to pay if you want in-depth insight. Don’t do this! We believe that NPS benchmarking is a waste of time and money.
NPS is measured at different times
Let's say your average Net Promoter Score (NPS) is 45 and a competitor has an NPS of 60. This seems to be a big difference, but is the history of the company taken into account here? If, as a starting company, you have just started measuring the NPS and are asking for the opinion of your customers for the first time in this way, it is likely that only customers with complaints will respond. A company that has been measuring their NPS for a longer period of time usually has more respondents who give a higher score. These customers have more experience with the company and the company has probably already built up a legion of loyal customers over the years who would like to give their positive feedback.
As said in the article 'Customer Experience Benchmarking: beware how you use it!', you must be sure that the Net Promoter Score is measured at the same time in the customer's journey and at the same touch point. Sometimes, the NPS is only measured after the customer has been in contact with customer service, while other companies are not requesting the NPS until the end of the customer's journey. If the moment and the touch point that are measured vary by company, you cannot compare these scores with one another.
Time-specific NPS recording does not give insight into season-dependent industries
NPS benchmark reports tend to be time-specific, as they are executed annually and do not provide insight into fluctuations throughout the year. The averages that these reports produce do not paint a proper picture of how a company scores throughout the year. Especially companies that are in a season-dependent industry have to deal with fluctuations. A garden center attracts many more visitors in the spring than in the winter, so the experience in the spring is very different. This affects the NPS score. This also applies to the travel industry. It is therefore important to know at which time the NPS is measured.
It also varies per country which score one gives. In the Netherlands people do not often give a rating of 9 or 10 out of 10, while Americans are much more generous in that regard. The Dutch are more down to earth and therefore not so easily express their enthusiasm compared to Americans. As an international company, never compare your score with other countries. In Japan, for example, it is not socially desirable to give a company a rating too high or too low. And Germans are very conservative, even if they are very satisfied.
So, you have to be sure that the Net Promoter Score is measured and calculated in exactly the same way in similar companies. You must be certain that you are comparing apples with apples. Otherwise, it makes no sense to compare your own business with other companies based on NPS.
More importantly, NPS is not seen as a score, but rather it analyzes the trend of the score throughout the year or years. You can, for example, compare which branch is doing better and what the reasons behind this are. Internally it is possible to compare apples with apples and learn from each other.
So, you should see NPS as a 'system' to provide your organization with insight into where changes need to be made in order to improve the customer experience and customer satisfaction. It is much more important that your NPS continues to grow than to have a higher score than your competitor. Only then you get value from measuring your Net Promoter Score!