What Is a Good Net Promoter Score? An In-Depth Guide for 2024

Net Promoter Score, or NPS, is one of the most important metrics for gauging customer satisfaction and loyalty. Businesses in every sector, from ecommerce to banking to software, track their NPS religiously – and for good reason.

Your NPS indicates what percentage of your customers are enthusiastic about your brand and likely to recommend you, versus those who feel negatively about their experience. It‘s a powerful way to identify both your most passionate fans and areas where you may be missing the mark.

But what NPS should you be aiming for? What‘s the difference between a good and bad score, and how do you compare to others in your industry?

In this comprehensive guide, we‘ll break down everything you need to know about NPS in 2024, including:

• What a "good" NPS looks like and benchmarks by industry
• How today‘s NPS leaders achieve best-in-class scores
• Proven strategies and best practices for improving your NPS
• Mistakes to avoid in implementing your NPS program

Whether you‘re an NPS novice, or looking to take your existing program to the next level, read on to learn how to harness this metric to drive customer satisfaction and business growth.

NPS 101: The Basics of Net Promoter Score

First, let‘s cover a quick refresher on how NPS works. To calculate your company‘s score, you survey your customers with a single question:

On a scale of 0 to 10, how likely are you to recommend [company/product] to a friend or colleague?

Based on their responses, customers are divided into three categories:

• Promoters (score 9-10): Loyal enthusiasts who will keep buying and referring others, fueling growth.
• Passives (score 7-8): Satisfied but unenthusiastic customers vulnerable to competitive offerings.
• Detractors (score 0-6): Unhappy customers who can damage your brand through negative word-of-mouth.

To calculate your NPS, subtract the percentage of Detractors from the percentage of Promoters. The score can range from -100 (if every customer is a Detractor) to +100 (if every customer is a Promoter).

NPS is popular because it‘s a simple, standardized way to quantify an abstract concept like customer loyalty. By segmenting customers into promoters and detractors based on a single question, it produces an easy-to-understand datapoint that can be tracked over time.

Many studies have shown a correlation between NPS and business growth. Promoters tend to have a much higher lifetime value – they buy more, stay longer, and tell their friends positive things about your business. One study found that promoters have more than 2x the lifetime value of detractors.

On the flip side, detractors are costly due to high churn and the negative word-of-mouth they spread. Research shows that 67% of customer churn is preventable if firms resolve issues the first time they occur. Detractors represent a huge opportunity.

But beyond the business case for a high NPS, it‘s simply the right thing to do by your customers. In today‘s competitive landscape where alternatives are a click away, customer experience has become the battleground for differentiation. Companies that exceed expectations and create promoters will thrive, while those who disappoint will struggle.

Average NPS Benchmarks By Industry

So what NPS should you realistically aim for? The truth is, there‘s no universal standard because average scores vary widely by industry. What‘s considered good in one sector might be sub-par in another.

Here‘s a look at the most recent NPS benchmarks by industry:

As you can see, there‘s a big range, from a high of 59 for department stores down to the single digits for internet service providers. Even two companies providing a similar product or service can have very different scores.

In general, industries that provide more of a "want" than a "need" tend to have higher average NPS because the customer relationship is driven more by passion than obligation. Adored consumer brands like Apple, Costco and Starbucks are perennial NPS leaders.

In contrast, industries like cable and internet, utilities, airlines, and health insurance have a harder time creating promoters. Customers often see these services as interchangeable commodities they have to purchase. Promoter scores over 50 are rare.

The key is to benchmark your score against companies offering a comparable product or service. Your goal should be to achieve a score that‘s significantly higher than your competitive set and the overall average for your industry.

Even if your number seems low in absolute terms, being the NPS leader in your space is a powerful differentiator. For example, USAA, the bank primarily serving US military members and families, consistently achieves one of the highest scores in the financial services industry, well above mega-banks like Chase or Wells Fargo.

What Today‘s NPS Leaders Do Differently

Let‘s dig into some specific examples of companies who excel at driving promoter behavior and take a look at what they do differently:

Tesla – With an NPS of 97, Tesla is far and away the leader in the automotive industry. The average NPS for car brands is only around 40. Much of Tesla‘s promoter base comes down to the passion they inspire in customers who see the company as a force for positive change in the world. The sleek, high-tech cars are a status symbol. Elon Musk‘s outsized personality and vision generate constant media coverage and discussion. Customers feel they‘re part of a movement bigger than themselves. Tesla is a master of turning customers into advocates.

Zoom – Zoom became a household name during the pandemic as the go-to video conferencing solution. Their NPS of 70 towers over competitors like Google Meet and Microsoft Teams. Customers rave about Zoom‘s ease of use, reliability and fun features like custom backgrounds. Even as workers return to the office, Zoom has sustained momentum through constant innovation while maintaining its trademark simplicity. The leadership team‘s commitment to customer success shines through. While many see video conferencing as a commodity, Zoom has elevated it into an experience customers prefer.

Warby Parker – The DTC pioneer in affordable eyewear has an impressive NPS of 80. From the very start, Warby Parker obsessed over eliminating every pain point in the process of buying glasses. They let customers try on frames at home for free. They accept vision insurance and provide virtual and in-person prescription checks. All frames include anti-glare, anti-scratch, UV-protected lenses. Fast, free shipping and hassle-free returns are standard. Helpful onboarding emails and 24/7 customer service make the experience seamless. Every touchpoint is designed to make customers‘ lives easier.

Across industries, the companies achieving remarkable NPS differentiate themselves in a few key ways:

1. They have a clear mission and values that resonate emotionally with customers. It‘s not just about the transaction, but a deeper relationship.

2. They put customer feedback at the center of every product, process and policy. Closing the loop with detractors is an obsession.

3. They empower frontline employees to do what it takes to make customers successful. Staff are well-trained and have the autonomy to solve issues on the spot.

4. They make the customer journey as effortless as possible, often reimagining outdated industry conventions. Technology enables proactive service.

5. They create and nurture community among promoters. Customers aren‘t just fans of the company but feel connected to each other.

Best Practices For Improving Your NPS

If your NPS leaves room for improvement, don‘t despair. With dedication and a customer-centric approach, you can boost your score over time. Here are some proven strategies:

Follow up with your detractors. When customers give you a low score, you need to reach out and make things right. Don‘t just send a generic "thank you for your feedback" email. Get on the phone, understand exactly what went wrong, and do what you can to fix it. Even if you can‘t resolve the issue, showing the customer you care and are taking action can help prevent churn.

Analyze the drivers behind your score. Don‘t look at your NPS in a vacuum. Use an open-ended follow up question after the rating to capture customers‘ reasoning in their own words. Tag and categorize the feedback to understand themes across promoters and detractors. Combine this with other customer data for deeper insights – for example, do you have more promoters among long-time or newer customers? Among those who‘ve hit a certain usage milestone? Share the data widely with cross-functional partners to help prioritize improvements.

Iterate on your program. Don‘t survey your entire customer base at once and stop there. Develop a regular survey cadence for each customer segment, whether that‘s quarterly, semi-annually or annually. Consider posing the NPS question at key moments like after onboarding and big feature releases. Experiment with the survey medium, trying in-app and text-based surveys alongside email. The key is making it as frictionless as possible for customers to respond.

Find quick wins. Improving NPS is a long game, but look for fast opportunities while tackling the bigger issues. For example, create helpful content to address common customer complaints that come up in NPS responses. Coach your support team on language proven to drive promoter behavior. Surprise and delight detractors with a token of appreciation. Small changes can spark outsized impact.

Close the loop with promoters too. Don‘t ignore happy customers in your efforts to minimize detraction. Promoters want to feel valued, so let them know you appreciate their feedback through a personalized note. Invite them to share their success story more widely in a case study or online review. Consider creating a loyalty or rewards program exclusively for promoters. Look for ways to mobilize promoters as an extension of your marketing efforts.

Pitfalls to Avoid With NPS

As you work to boost your NPS, steer clear of these common traps:

Trying to game the system. NPS works because of its simplicity. Don‘t muddy the waters by getting too clever with your question phrasing or surveying only customers you know will give you a good score. You want honest feedback, even if it‘s hard to hear.

Treating it as vanity metric. NPS can easily become trivialized, another number leadership demands go up and to the right. To be truly meaningful, it needs to be baked into decision making, with clear accountability and changes that stem from the data.

Misinterpreting benchmarks. While helpful context, don‘t get too hung up on how you stack up to big brands or averages across all companies. Focus on your own industry and competitive set. And remember even a "good" score leaves room for improvement.

Overemphasizing the score itself. Your NPS is a snapshot in time. It will fluctuate from survey to survey. What matters most isn‘t the absolute number, but the insights you glean from customer verbatims and how you act on them to get better. Always bring it back to the "why" behind the data.

NPS Success Stories

Finally, let‘s look at some real-world examples of companies who significantly moved the needle on NPS:

HubSpot
This marketing, sales and service software company uses NPS data to uncover leading indicators of churn and take proactive measures. By reaching out to at-risk customers and fixing issues before they escalate, they increased retention and moved more passives and detractors into the promoter bucket. They closed the loop with an incredible 95% of detractors through 1:1 conversations. Over 5 years, they boosted their NPS by more than 16 points.

Porsche
The luxury automaker launches ad hoc NPS surveys after major customer touchpoints like a purchase or repair. The instant, contextual feedback helps them identify acute pain points and empowers dealers to act in the moment. Insights are shared with cross-functional teams from engineering to marketing to drive systematic improvements. Porsche‘s NPS has remained best-in-class even as the company has tripled sales.

Marriott
The hotel giant uses NPS to evaluate each property in its portfolio with the goal of delivering a consistent guest experience worldwide. Marriott‘s leadership pores over the NPS data and takes it very seriously – persistently low-scoring hotels are at risk of losing their contract if issues aren‘t resolved. The focus on continuous improvement based on customer feedback has helped Marriott maintain a high NPS despite its massive, geographically diverse operations.

Conclusion

A high NPS is achievable for companies of any size in any industry. It requires a steadfast commitment to your customers and a willingness to make their success your top priority. By listening closely to feedback, systematically minimizing friction, and turning satisfied customers into evangelists, you can outpace competitors and drive remarkable growth through NPS.

As we head into 2024, make improving this all-important metric a key part of your customer experience strategy. Use the benchmarks, best practices and examples in this guide as your roadmap. A few points of NPS improvement can have an outsized impact on retention, brand advocacy and revenue. Seize the opportunity to create more promoters and transform your business.