Is it Useful to Benchmark Your Net Promoter Score?

Net Promoter Score (NPS) benchmarking presents an interesting challenge for many business leaders. On one hand, executives value information about their organization’s performance and how they compare to other companies in their industry. On the other, trying to rank order the competition on a metric like NPS can be very tricky business.

Collectively, we have learned a lot through NPS benchmarking studies. We have come to expect that cultural differences can lead to geographic variations in scores. We understand the unique considerations that should be made when measuring NPS for B2B organizations compared to B2C. We have seen that customers in some industries are tougher scorers, causing certain companies to struggle to achieve high scores. It is precisely because we have learned these things that NPS continues to be a powerful customer loyalty metric and business intelligence tool. So, why is it such a difficult business decision to obtain NPS benchmark intelligence?

Drawbacks of NPS Benchmarking

This isn’t to say that normative data isn’t available. It’s just that acquiring benchmarking can be a risky investment. There are a few companies that offer NPS benchmarking data for purchase, but the relevance of the data may be an issue. There may not only be methodological inconsistencies, but the data’s relevance depends on how well your competitors are defined in the database and which contact roles the scores represent. For those and other reasons, it’s not always clear if you are comparing apples to apples. Databases that rely on people at those companies to self-report, rather than third-party administered surveys, can be even more dubious. Beyond these challenges, it’s unlikely that you will have clarity into the timeliness of your intel, regardless of its source.

Given these challenges, Satrix Solutions offers advice on how to approach NPS benchmarking in a balanced manner: Your organization’s NPS is always the NPS to beat, but if you chose to benchmark, then benchmark the wise way!

Understanding the Value of Net Promoter Score

Knowing your competitor’s Net Promoter Score doesn’t really help you retain your customers. Rather, NPS is the impetus of actions that move the needle on customer loyalty behavior within your organization. In fact, the richest intelligence is not your competitor’s—it lies within the individual or account-level scores, changes in account loyalty over time, the segment and cohort analysis conducted, and the unstructured, text-based feedback in response to the open-ended “why” questions. These are the best places to start if your goal is truly to build a world-class customer-centric culture—and not just a world-class Net Promoter Score. The insights that will get you to the next level are not necessarily found within NPS benchmarks.

With each survey conducted, re-focus on what your Net Promoter Score means for your organization. Ultimately, a good understanding of customer sentiment will increase the predictability of customer loyalty behavior. By partnering with a third-party provider that specializes in voice-of-customer (VoC) programs, you gain the expertise to help you contextualize your relationship survey. This is all without purchasing benchmarking data. Satrix Solutions can help you make sense of your current score, establish what NPS range is in reach based on your industry, and provide guideposts for your VoC maturity.

Consider a Competitive Benchmark Study

All that said, we realize that some executives rely on benchmarking and comparative data for a variety of understandable reasons. In such cases, we recommend a Competitive Benchmark Study to reduce a large amount of uncertainty compared to online databases and reports available for purchase.

A Competitive Benchmark Study is a blind study that will help your team obtain relevant, trusted, and timely NPS data across the industry competitors you care about most. Most often administered by a third-party, such as Satrix Solutions, it enables you to glean the richest competitive intelligence from respondents because the respondents are blind to which company is sponsoring it.

When we run these studies on behalf of our clients, we invite feedback from a thoughtfully developed contact list that targets the right people—those who truly represent the stakeholders or segments your organization hopes to capture. Compared to a database of scores, a Competitive Benchmarking Study can lead to better data and, consequently, far more impactful insights. This is because an expertly designed, custom-made survey provides answers to your top-priority business questions and maximizes response rates.

A Competitive Benchmarking Study can lead to a fuller picture of the landscape that not only shows you how you stack up but also offers new perspectives to bolster your organization’s strategy decisions, goal setting, and overall customer experience maturity.

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By |2020-06-16T06:59:41-07:00June 15th, 2020|Categories: Net Promoter Score|