Many companies put significant emphasis on their Net Promoter Score (NPS), but some businesses have healthy growth with a low NPS. The NPS numbers are used to determine customer loyalty and advocacy to your brand, and look at the results to one single question: would your customers recommend your company to others? In order to answer that, the NPS puts customers in three categories: promoters, passives and detractors. Companies focus on moving customers into the promoter bucket, as Client Heartbeat found 80 percent of referrals come from this category. This score matters, but NPS only reveals one part of the customer experience and often lacks context.
Comparative NPS, sometimes referred to as relational NPS, is a process comparing your NPS to other companies. These scores may come from your own industry, so you understand how you stack up against your competitors, or you may look at how you compare to high-NPS companies. A relative NPS often explains high-growth companies with low absolute NPS, because even if the overall score is low, it just needs to be higher than the competitors to help fuel loyalty and growth.
Comparative NPS gives a baseline, but it comes with some downsides as well. In some cases, companies with higher NPS than competitors may stop putting as much effort into delighting customers, even if overall NPS is low, Forbes reports. Comparative NPS offers much needed insight into your industry and overall NPS performance, but it’s not always a good indicator of customer satisfaction and loyalty.
The absolute NPS looks at your numbers without any comparisons to your competitors. You evaluate this score to determine whether your customer experience is delighting customers overall. A low absolute NPS is not always an indicator of poor customer loyalty or growth. Low or negative numbers do indicate problems with your CX, although figuring out which areas are problematic may require feedback and customer conversations to understand the problem. Some industries have lower overall NPS than others, such as cable services and healthcare providers.
Your survey design, channels, frequency and segmentation all have an impact on your NPS, which has the potential to skew results one way or another. If you survey customers shortly after they engage with your company through customer support or another touchpoint, your encounter is fresh in their minds. If you ask later on, they may change their answers. Genroe recommends asking the customer why they gave the recommendation score they did as an open-ended question, which can drive 60 percent response rates.
Competitive benchmark NPS numbers go beyond your existing customer base. With these, you look at your target audiences, which includes non-customers, instead of focusing solely on people doing business with you. You gain understanding into what the overall market is looking for, instead of focusing entirely on your current customers. When you understand what non-customers look for from your competitors, you can gain insights to create a better customer experience.
Your NPS is one metric among many to help you measure your customer loyalty and advocacy. It provides useful insights into how your customers and non-customers feel about your company, but you may lack enough information to tie your NPS into your performance. Comparative NPS helps, but ultimately you want to use NPS with other survey options to get a complete view of your customer loyalty and satisfaction.