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It’s considered by many to be the gold standard of customer satisfaction ratings. At Qonto, it’s a North Star metric and, perhaps, the number we obsess about the most.
A company’s NPS - that’s Net Promoter Score - measures customers’ loyalty by asking them one single question:
On a scale of 0 to 10, how likely is it that you would recommend [your company] to a friend or colleague?
The aggregate score does much more than simply quantify how favorably your customers see you; it can be a precious indicator of your company’s future performance and growth. It can even become the focal point of your entire company culture and strategy.
So how do you calculate NPS? And, then, what can you do with it? Here’s all you need to know about this simple yet powerful number.
To find your NPS, you must first ask your customers how likely they are to recommend your company to friends and colleagues, on a scale of 0-10 (0 being not at all likely, 10 being very likely). You can carry out the survey by email, via online questionnaire platforms, by telephone, on social media or face to face. Based on their responses, you then categorize them into three groups:
You can then calculate your NPS with the following, basic sum: % of promoters - % of detractors.
For example, let’s say you received 250 responses.
75 customers scored you a 9 or 10 (Promoters) - 30%
150 scored you a 7 or 8 (Passives) - 60%
25 scored you 6 or below (Detractors) - 10%
30% - 10% = 20
Your NPS score is 20.
An NPS score will therefore be somewhere between -100 (if every single customer is a Detractor) and +100 (if every single customer is a Promoter).
It’s worth reaching out to any Detractors if you notice an unusually low score. After one NPS survey at Qonto, we contacted a customer to ask what prompted them to leave a score of zero. The answer? They’re perfectly satisfied with Qonto, but are not likely to recommend it because “all my friends already use and love it!”
In theory, anything above 0 can be considered a positive NPS score, as it shows that a company has more promoters than it does detractors. The creators of the NPS scoring system back in 2003, Bain & Company, suggest as a rule of thumb that:
Qonto’s NPS at time of publication (June 2024) was +76.4; it’s a score we’re very proud of, and one we work hard every day to protect.
The reality is that NPS scores can vary significantly from one industry to the next and from one country to the next. That means there’s little point in a Spanish company that makes shoes comparing its NPS to that of an American Software-as-a-Service provider.
Timing and methodology can also impact an NPS score.
This can make benchmarking your company’s NPS score against that of other companies something of a minefield. Let’s take a look at some of those variables.
Some industries naturally lend themselves to higher NPS scores than others. Businesses in the Luxury or Travel/Tourism sectors, for example, traditionally enjoy high scores as what they offer is usually associated with beautiful objects and happy times. On the other hand, players in the Telecoms industry, with its huge customer bases and lack of personalized customer service, usually have lower average NPS scores. Within the Banking industry, NPS creator Bain & Company notices a big gap between traditional French retail banks (average NPS of +9) compared to online banking alternatives (average NPS of +23) (link in French).
NPS scores can also vary according to national and cultural differences. Scores in the USA, for example, are typically higher than those in Europe. Some observers suggest this may have something to do with how children are graded at school; in the USA it’s not uncommon for students to achieve the top mark (an A grade), whereas in European countries, achieving a perfect 10/10 or 20/20 is often almost impossible.
This could explain the fact that Europeans are less likely than Americans to leave a 9 or a 10 rating in an NPS survey. Regardless of the reasons, there’s plenty of data pointing to a geographical disparity in NPS scores. One study carried out by SurveyMonkey reports that overall NPS can be as much as +62 in Brazil and +51 in India, but as low as 2 in the Netherlands and even -52 in Japan.
How you conduct the NPS survey can also affect the results. Asking respondents by telephone or face-to-face can increase the chances of them giving a higher score than they would give if they completed the survey online. One study found that, among the same customer group, telephone respondents left an NPS score of +58, whereas those responding via email gave a +18 rating - a massive gap of 40 points.
The timing of the survey can also influence the result: ask customers to rate you immediately after the successful delivery of a product and they’re more likely to score you higher than if you asked the same question when they call your teams to demand why they haven’t received their order.
Given the above variables, directly comparing your NPS score to others can be complex and imprecise; also, not every company wishes to make its score public. However, when used as an internal benchmark using consistent methodology, your NPS can be a valuable metric for driving company performance and making your customers’ smiles even wider. So, when looking for an answer to the question ’what’s a good NPS score?’, a good candidate would be this: a good NPS score is one that’s better than your previous NPS score.
If externally benchmarking your NPS score can be complicated, there are specialist consultancies who will, for a price, bring you up-to-date statistics for competitors and partners within your industry. But calculating your own NPS is cheap, easy, and potentially extremely valuable. It could even help you recalibrate your business’ outlook and improve its outcomes. Here are just some of the benefits of finding out your NPS score, and knowing where you stand when it comes to customer loyalty:
Identifying your Promoters, Passives, and Detractors will allow you to take targeted action that will make more customers become loyal fans who are likely to keep paying for your product or service. You can reward your Promoters to ensure they keep promoting you. You can provide some extra customer delight to your Passives to convert those 7s and 8s into 9s and 10s. You can directly address the issues facing your Detractors, so they become Passives or Promoters.
As well as asking your customers to give you a 0-10 rating, you can add an open ended question to your questionnaire. You can ask, for example, what they think you do well, how they think you could improve, or what you could do to really wow them.
Remember that the NPS question asks how likely customers are to recommend you. Word of mouth is a fine acquisition channel, and if more customers recommend you, more leads will come knocking at your door. Higher NPS scores often correlate very closely with higher growth figures and are useful indicators of future business performance and revenue growth.
Feedback to any open-ended questions you add to your NPS survey can give you insights into how to improve your product or service. It can reveal blind spots and draw attention to what your competitors are doing to better you, whether that’s with their product, service or communications.
If you have a high NPS, you may well decide to communicate it externally to show potential customers that you’re trusted, reliable, and worth their consideration. Also, the survey will reveal customers who are your most enthusiastic supporters and potential ambassadors. These could be great candidates to feature in case study blog articles or videos, giving them the chance to say, in their own words, how your company has helped them overcome their business challenges.
You can make your NPS score the North Star metric that guides all employees in every team across the entire company. Some companies focus on revenue or customer acquisition figures. Ask yourself whether your workforce would be more motivated and inspired by pleasing your customers, or increasing your turnover. In any case, the circle is usually a virtuous one: higher NPS makes conditions riper for increasing both revenue and new custom.
By investing time and energy into nurturing your NPS score, you can allow a customer-centric culture to flourish in your company. Regularly measuring your NPS and addressing any issues that arise from it can bring customer feedback organically into the decision-making process.
An NPS score is not just restricted to the likelihood that your customers recommend your brand. You can carry out NPS surveys for a launch of a new feature, product line, or even a marketing campaign.
It can also be a lever to help you increase job satisfaction among your teams: eNPS (where the ‘e’ stands for ‘employee’) asks how likely staff are to recommend working for your company. Such surveys have been shown to drive up productivity, engagement, talent retention and, when publicized externally, talent acquisition.
In summary, calculating your NPS score is a simple, cost-effective way of gauging customer loyalty and collecting valuable feedback on your product or service. If you’re looking for a business account that simplifies your finance tasks (and that has a very healthy NPS score of its own), then there’s no better place to start than Qonto. If you’re already a Qonto customer, we may well be in touch soon to find out how you’d score us.
