Share this content

Why you shouldn't use NPS as the core metric for industry benchmarks

29th Jun 2016
Share this content

Benchmarking is the process of comparing one's business processes and performance metrics to industry bests. In order to get the best results, it’s important to choose the right metric.   

As many companies are using NPS, it does seem tempting to use the Net Promoter Scores as core metric to benchmark companies by. However, using that score as a core metric for that kind of benchmarking isn't as obvious as it may seem.   

The reason for that is quite simple: NPS can vary enormously depending on lots of factors. Unless your survey has the exact same survey process as the benchmark's process, Net Promoter Scores are incomparable.   

In order to better understand NPS vis à vis Industry Benchmarks, I had an inspiring talk with Nele Aendekerk.  

Nele AendekerkNele has been working with customer service and the Net Promoter Score for over 16 years and knows a lot about Industry Benchmarks. She started working at Luminus - an energy supplier in Belgium - in 2002 , where she led the customer experience team during the last 5 years. In 2014 they've won the Belgian Contact Center award. Two years later, in January 2016, Nele started working at Securex as Director Customer Connection. Securex is a social secretary that offers HR Consulting, medical control & prevention and much more. 

No Net Promoter Score is created equal

Comparing your scores with those from others is a good thing, it gives you context and makes you aware that as a company, you're not an island. You're definitely not alone and comparing data will help you to be more competitive and to get inspired.   

When using the Net Promoter Score as a metric, it's important to keep in mind not to compare apples with pears. Your Net Promoter Score is not just a score. There's a lot of different factors that will define how you should interpret your results.  

1. The Industry you're operating in

First and foremost, every industry is different. Lots of companies would like to compare themselves with companies that are doing really well: Apple, Coolblue, Zappos, … But they forget that they're in a totally different sector.   

When comparing scores, it's important to understand what industry you're working in. Some industries have a more negative image than others. Services for example will always have a lower NPS score whereas Apple, who's really focusing on a total experience, will have a higher score. But, it's not because you're in an industry that may gave a negative image, that you cannot have great scores!   

The difference in industries proves that it's almost impossible for regular retailers, let's say a clothing store, to compare themselves with a company that provides services (electricity, television or internet). It'll just give you a wrong picture.   

But that doesn't mean that, when you're comparing scores from companies that are operating in the exact same industry, you'll have a reliable result. Let's take Coca-Cola Enterprises and Pepsi Co as an example. Both are operating in the same industry: they're producing soft drinks. But when they're measuring customer satisfaction they might use different touchpoints or different points within the customer journey.  

2. The contact points your survey is based on

Secondly, different points within the customer journey that trigger the launch of the NPS question will lead to different Net Promoter Scores. For example, you could ask your customers if they would recommend your company right after their purchase. What you end up with is a transactional NPS. This could work very well for restaurants: the customer has visited your restaurant and has consumed a meal. Best way is to send them a survey immediately.   

For car dealers that want to know how satisfied customers are about a certain car brand (not the service at the dealership itself) it would be more interesting to wait a couple of months.  When people just bought a car it would be impossible for them to tell how great it is to drive that car. They first need to experience it. So wait until they’ve had a chance to live through the experience, and then, pop the question to them. This will give you a brand NPS.  

Both scores, the transactional NPS and the brand NPS, are completely different. Comparing them is of no use; your conclusions would be unreliable.  

The best way to know what different touchpoints your customer journey has, is by creating a customer journey map. This is a timeline that starts at the initial contact and goes through the entire process of engagement and into a long-term relationship.   

Creating a customer journey map will help you to see things from a customer point of view, as opposed to seeing them from your organizational bulwark. That will help you to make the right decisions.   

3. The emotions of your customers

Thirdly, there's also a difference between transactional and emotional NPS. Some transactions are purely based on what needs to be correct, whilst others play more on emotions.   

Take this for an example: imagine you get your electricity invoice and everything on it is correct. Right after receiving it, you get an NPS survey. Would the fact that all the information on your invoice is correct result in you giving a high score for that company? Probably not. An invoice needs to be correct. There’s no other way. Sure enough, if there's a mistake this will result in a lower score. But there’s no points to be granted for sending a correct invoice.   

Whilst for gaining trust, that's another story. When someone is about to switch supplier for example, they'll first want to get to know the company. They want to build a relationship. So these interactions have a higher emotional focus. This is how Nele and the customer experience team at Luminus got the award for best Belgian contact center.   

You might assume that they’ve been handing out nice gadgets. This is what they've actually done: they’ve been working on the core of their business. A thorough understanding of the needs and emotions of the customers, by listing to their customers, enabled them to make clear choices for process redesign. This has enabled Luminus to increase satisfaction both transactionally and emotionally.  

Again both scores, the transactional and the emotional one, will be completely different. The transactional ones will be lower, since it's about things that really need to be correct. Whilst for transactions that are based more on emotions, scores will be higher (if everything is ok).  

So if we cannot benchmark our NPS, what should we look at?  

All these factors influence your Net Promoter Score and they make every score unique. Which makes it really hard to compare scores. Certainly if you don't know what attributes the other score is based on. There's absolutely no harm in looking at what's happening in your sector and beyond, but always keep in mind that no Net Promoter Score is created equal.   

According to Nele Aendekerk, the only scores worth comparing with, are you own. And that answers the question: what is, in fact, a good NPS? It’s a NPS that is better than the one you had yesterday.   

But there's another factor that's very important when analyzing your Net Promoter Score: how your score was formed. Every score is a combination of a certain number promoters and detractors. According to Nele, it's important to zoom in on that as well.  

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.