Net Promoter Score (NPS) score in product management is a crucial element that functions as a growth indicator. When creating new products, this metric which measures customer loyalty is taken into consideration. In, this article we will discuss whether Net Promoter Score (NPS) is a good NPS Score or a bad NPS Score. Further, we will check what are the things we can measure from Net Promoter Score (NPS).

A NPS score above 0 is considered good, but above 20 is excellent and above 50 is remarkable, according to Bain & Company, the company that developed the NPS metric. The top percentile is anywhere above 80.

Good Net Promoter Score (NPS)

What is Net Promoter Score (NPS)?

Net Promoter Score (NPS) is a metric used to assess a company’s customer loyalty, satisfaction, and enthusiasm. It is calculated by asking customers one question: “On a scale of 0 to 10, how likely are you to recommend this product/company to a friend or colleague?” Aggregate NPS scores assist businesses in improving service, customer support, delivery, and so on to increase customer loyalty. However, organizations must ensure that NPS surveys do not feel forced, and they should not be the only metric used to determine customer loyalty.

Which Score is Considered a Good NPS Score?

A good Net Promoter Score (NPS) depends on the industry and the company’s specific goals. However, in general, an NPS score of 70 or above is considered to be excellent, a score of 50 to 69 is considered to be good, a score of 30 to 49 is considered to be neutral, and a score of 0 to 29 is considered to be poor.

• NPS > 0: Generally considered a good score, with more promoters than detractors.
• NPS > 50: Indicates a high level of customer loyalty and satisfaction.
• NPS < 0: Suggests that there are more detractors than promoters, indicating potential areas for improvement.

Which Score is considered a Bad NPS Score?

Any score less than zero indicates that a company has more detractors than promoters. This is where industry NPS benchmarks, such as the ones mentioned above, come in handy: while an NPS score of -3 may appear bad in isolation, it’s difficult to interpret without comparable scores from key industry players if the industry average was -10, the score would suddenly look less bad.

Even if the bar is set low, a negative NPS indicates that a company needs to work hard to improve the situation, reduce the number of unhappy customers, and generate more promoters.

What can you measure with NPS Score?

Net Promoter Scores can be used by organizations that provide a product or service, such as call centers, internet service providers, department stores, or healthcare providers.

The following tasks are made easier by the metric:

• Evaluate the loyalty and retention of your customers.
• A specific impact held by customers.
• A particular customer loss of talent.
• Enhance the company, item, or service.

How to calculate NPS?

The percentage of detractors is subtracted from the percentage of promoters to get the NPS score. The NPS score might be 50, for example, if 60% of consumers are promoters and 10% are detractors.

Here is the formula for calculating NPS:

How to calculate NPS?

NPS = % Promoters – % Detractors

NPS scores can range from -100 to 100. A score of 100 would mean that all customers are promoters, while a score of -100 would mean that all customers are detractors. A score of 0 would mean that the number of promoters and detractors is equal.

Companies having a Good NPS Score

Here are a few examples of the companies that having a good NPS scores:

Companies having a Good NPS Score

• Apple: 87
• Amazon: 77
• Netflix: 69
• Tesla: 76
• Google: 68

These companies have consistently high NPS scores because they focus on providing excellent customer service, developing innovative products and services, and building strong relationships with their customers.

How NPS measures Customer Loyalty

Net Promoter Score (NPS) measures customer loyalty through a simple question: “On a scale of 0-10, how likely are you to recommend our product/service to a friend or colleague?” Customers who respond with a 9 or 10 are promoters, indicating strong loyalty and likelihood to recommend. Those who respond with 7 or 8 are passives, somewhat satisfied but less likely to advocate. Scores of 0-6 are detractors, signaling dissatisfaction. NPS calculates loyalty by subtracting the percentage of detractors from the percentage of promoters, providing a clear metric of customer loyalty and satisfaction.

Conclusion – Good Net Promoter Score (NPS)

A good Net Promoter Score (NPS) typically falls in the range of 50 to 70 or higher, depending on industry benchmarks. It signifies that a significant majority of customers are promoters who are likely to recommend the company’s products or services to others. This score reflects strong customer satisfaction, loyalty, and positive brand perception.

Companies achieving a good NPS often excel in delivering exceptional customer experiences, addressing customer needs effectively, and exceeding expectations in product quality and service. They prioritize continuous improvement based on customer feedback, promptly resolving issues and enhancing their offerings to align with customer preferences.

Good Net Promoter Score (NPS) – FAQs

Is 70 a good NPS score?

A Net Promoter Score (NPS) of 70 is considered excellent, indicating strong customer loyalty and satisfaction with a company’s products or services. Scores above 50 are generally seen as very favorable in most industries.

Is Net Promoter Score useful?

Yes, the Net Promoter Score (NPS) is useful as it provides a simple and effective metric to gauge customer satisfaction and loyalty, helping companies assess and improve their overall customer experience.

What is a bad NPS score?

A Net Promoter Score (NPS) below 0 is generally considered a bad score, indicating that there are more detractors than promoters among customers, reflecting significant dissatisfaction and potential issues with the company’s products or services.

How to improve Net Promoter Score?

To improve Net Promoter Score (NPS), focus on enhancing customer experience through personalized service, addressing feedback promptly, and consistently delivering value that exceeds expectations.