Customer satisfaction is a key indicator of success, and the most important metric that has gained widespread popularity for measuring customer satisfaction is the Net Promoter Score (NPS).
As we step into 2024, businesses across various industries must understand where they stand in terms of NPS benchmarks compared to their competitors. Let’s explore the NPS benchmarks you can look at in 2024.
Understanding NPS
Before we dive into industry-specific benchmarks, let’s refresh our understanding of NPS.
NPS is a metric used to gauge customer loyalty and satisfaction by asking a simple question: “On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?” Based on their response, customers are categorized into three groups:
- Promoters (score 9-10): these are loyal enthusiasts who are likely to promote your business to others.
- Passives (score 7-8): these are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6): these are unhappy customers who can damage your brand and hinder growth through negative word-of-mouth.
The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. This yields a score between -100 (all customers are detractors) and +100 (all customers are promoters).
NPS benchmarks by industry
Each industry responds to different customer needs and aims at various levels of satisfaction. Now, let’s get down to business.
Here’s our curated list of NPS benchmarks per industry:
- Technology and Software: leading tech companies aim for NPS scores in the range of 50 to 70. This is driven by factors such as product usability, customer support efficiency, and innovation.
- Retail and E-commerce: with the rise of online shopping, retailers focus heavily on customer experience. NPS benchmarks in this industry typically range from 40 to 60. Speedy delivery, hassle-free returns, and personalized recommendations contribute significantly to NPS in this sector.
- Finance and Banking: trust is the cornerstone of the finance industry. NPS benchmarks for banks and financial institutions hover around 30 to 50. Factors influencing NPS include transparency, ease of transactions, and responsiveness to customer queries.
- Healthcare and Pharmaceuticals: NPS benchmarks in this sector vary widely, but generally fall between 30 and 60. Factors such as quality of care, communication with healthcare providers, and access to services impact NPS scores.
- Hospitality and Travel: NPS benchmarks typically range from 50 to 70. Factors such as cleanliness, comfort, and staff friendliness play a significant role in driving NPS scores.
- Telecommunications: benchmarks in this industry usually range from 20 to 40. Factors such as network reliability, customer service quality, and pricing influence NPS.
I can’t find an NPS benchmark for my industry…
If you find yourself in a situation in which there isn’t a readily available NPS benchmark for your industry, don’t panic. While having industry-specific benchmarks can provide valuable insights and a comparative framework, the absence of such benchmarks doesn’t mean you can’t measure NPS.
Here’s how you can navigate this scenario effectively:
Establish internal benchmarks
Start by establishing internal benchmarks based on your historical NPS data. Analyze trends over time and set realistic goals for improvement. Your past performance can serve as a reference point for assessing your current standing and progress.
Seek comparative data
Although industry-specific benchmarks may not be readily available, you can still gather comparative data from similar businesses or sectors. Look for case studies, reports, or industry surveys that provide NPS insights. While not directly applicable, this data can offer valuable context and perspective.
Focus on improvement
Regardless of industry benchmarks, the primary objective of measuring NPS is to identify areas for improvement and enhance customer satisfaction. Instead of fixating on external benchmarks, prioritize internal initiatives aimed at delivering exceptional experiences and driving positive word-of-mouth.
Engage with customers
Leverage customer feedback to understand their needs, preferences, and pain points. Conduct regular surveys, solicit feedback through various channels, and actively listen to customer inquiries and complaints. By engaging with customers directly, you can gain invaluable insights that inform your improvement efforts.
Monitor competitors
While direct industry benchmarks may be lacking, keeping an eye on your competitors’ NPS scores can offer some comparative perspective. Monitor their customer reviews, social media interactions, and public sentiment to gauge how your performance stacks up against competitors in the eyes of customers. This can also be an opportunity for your business to fill in the missing gaps of your competitors and gain a nice competitive advantage.
Focus on long-term trends
Instead of fixating on short-term fluctuations or arbitrary benchmarks, focus on long-term trends in your NPS scores. Track changes over time, identify patterns, and strive for gradual improvement. Consistent efforts to enhance customer satisfaction will yield tangible results over time, regardless of industry benchmarks.
In summary, while industry-specific NPS benchmarks can be informative, they are not the sole determinant of success. By establishing internal benchmarks, seeking comparative data, prioritizing improvement initiatives, engaging with customers, monitoring competitors, and focusing on long-term trends, you can effectively leverage NPS measurement to drive meaningful outcomes for your business.
How to surpass the NPS of your industry
This is the juicy part. Improving and surpassing the NPS benchmark for your industry requires an effort across various aspects of your business, from customer service to product development.
Here’s how:
Understand customer needs
Conduct thorough research to understand your customers’ needs, preferences, pain points, and expectations. Use surveys, interviews, and feedback mechanisms to gather insights directly from customers.
Empower employees
Invest in training and development programs to empower your employees to deliver exceptional customer service. Equip them with the skills, knowledge, and tools necessary to address customer inquiries, resolve issues promptly, and create positive interactions. If you’re the only one running your business, make sure you stay on top of trends!
Improve product/service quality
Continuously improve the quality of your products or services based on customer feedback and market trends. Ask for feedback from customers throughout the product/service lifecycle and iterate based on their input to ensure alignment with their needs and expectations.
Focus on customer experience
Prioritize the customer experience across all touchpoints, from initial contact to post-purchase support. Streamline processes, eliminate pain points, and personalize interactions to create memorable experiences that foster loyalty and advocacy.
Be proactive in addressing issues
Anticipate potential issues before they arise and proactively address them to prevent negative experiences. Monitor customer feedback, social media mentions, and reviews to identify areas of concern and take swift action to rectify them.
Deliver consistent service
Consistency is key to building trust and loyalty. Ensure that every interaction with your brand reflects your commitment to excellence and aligns with your brand promise. Set and uphold high standards for customer service across all channels and touchpoints.
Encourage and act on feedback
Create a culture of feedback within your organization where both positive and negative feedback are welcomed and acted upon constructively. Regularly review NPS data, customer surveys, and other feedback sources to identify trends and areas for improvement.
Innovate and stand out
Stay ahead of the curve by continuously improving your product/service in the marketplace. Leverage customer insights to identify unmet needs and opportunities for innovation that set you apart from competitors.
Build emotional connections
Foster emotional connections with your customers by demonstrating empathy, understanding, and authenticity in your interactions. Show genuine appreciation for their loyalty and make them feel valued and heard.
Measure and track progress
Implement a system for measuring and tracking NPS scores, customer satisfaction metrics, and other relevant KPIs. Regularly assess your performance, set benchmarks for improvement, and celebrate successes along the way.
