We often hear the question what a good NPS is or what the NPS of similar branches is. One way to find out is NPS benchmarking. Benchmarking in general means that you compare your business to other companies in the same industry to analyze how your organization develops in comparison to your competitors. You can do this with NPS by comparing your company's NPS score with the NPS of your direct competitors. For example, 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
Imagine 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 will respond with a complaint. A company that already measures the NPS has more respondents who give higher NPS. 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 NPS 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, whilst 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 with NPS varies by company, you cannot compare these scores to each other.
NPS time recording does not give insight into season-dependent industries
NPS benchmark reports are often a time-frame because they are executed annually and do not provide an insight into fluctuations throughout the year. The averages that roll out these reports do not give a full 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 centre 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.
Cultural influences NPS
It also varies per country which score one gives. In the Netherlands people do not often rate a 9 or a 10 out of 10, while Americans are much more generous in that respect. The Dutch are soberer in showing their enthusiasm than Americans. As an international company, never compare your NPS between different countries. In Japan, for example, it is not socially desirable to give a company too high or too low a figure. And Germans are very conservative, even if they are very satisfied.
So, you have to be sure that the NPS is measured and calculated in exactly the same way in similar companies. That you compare apples to 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 analyzes the trend of the score throughout the year or the years. Compare, for example, which establishment is doing better and what the reasons behind it are. Internally you can compare apples with apples and learn from each other.
So, look at NPS as a 'system' to give your organization insight into where changes need to be made in order to improve the customer experience and customer satisfaction. It's much more important that your NPS continues to grow than you have a higher score than your competitor. Only then you get value from measuring your NPS!