For good reason, over the last few years Net Promoter Score (NPS) has gained prominence as a key metric of company performance. Companies with “good” NPS scores retain a higher share of their current customers, sell more to their current customers, and attract more new customers due to strong word of mouth and references from their current customers. The inverse is true for companies with low NPS scores.
While measuring NPS is relatively easy (For a primer on NPS scores and how to measure them, click here), ultimately what matters is not the number itself, but what that number means for businesses like yours in terms of:
• Retention
• Additional sales to existing customers
• New sales via references and word of mouth
In our work, we’ve seen some companies with an NPS of 10 that are strong performers on all of those dimensions while others with the same NPS score that achieve middling results.
So what NPS score is a good score for a business like yours?
Overall, there is a strong inverse correlation between the degree of complexity and the target NPS benchmark: the greater the complexity, the lower the benchmark.
The lowest benchmarks are for enterprise software. Not only are the products highly complex, enterprise typically have multiple stakeholders that each value different features, making it difficult to satisfy everyone. Furthermore, enterprise software is a work in progress. Customers are always waiting for upgrades, updates and add ons, leading to some level of dissatisfaction with whatever they have now.
The highest benchmarks belong to consumer products. As simple, finished products used by a single individual, they are the opposite of enterprise software.
So what NPS benchmarks should you use for your company? Chart 1 below shows the NPS scale divided into 5 categories from Bright Red to Bright Green, that are described in Table 1, for three different classes of products:
• Enterprise Software: Software used by large enterprises with multiple different user groups within the company.
• Departmental Software/Packaged Solutions: Software designed for a single department with a single type of user OR packaged systems (such as firewall appliances) that are self-contained.
• Individual Solutions: These are solutions purchased by business users for their individual use that are similar to consumer products in their complexity and level of finish.
For Enterprise Software, any NPS score above 0 falls into Green while for Individual Solutions, Green starts at 40.
Chart 1: NPS Benchmarks for 3 Classes of Technology Solutions
Table 1: NPS Categories
Need help boosting your NPS score? Topline runs interview-led customer experience programs that provide companies with deep insight and actionable recommendations that help all companies achieve Bright Green. Contact us at info@toplinestrategy.com.
