Net Promoter Score (NPS) is one of the most commonly-used business performance metrics—a simple and straightforward rating scale that helps businesses understand how well they’re serving their customers. But measuring the score isn’t enough to truly inform your future brand strategy.
To understand NPS in context, companies must put it into context using B2B Net Promoter Score benchmarks. We’ve created this guide to tell you how.
In the sections that follow, we’ll cover:
- What the Net Promoter Score is and how it’s measured
- How B2B organizations use NPS to drive strategy
- General and industry-specific B2B Net Promoter Score benchmarks
Let’s dive in!
Quick Takeaways
- Net Promoter Score uses a 0-10 rating scale to measure how likely customers are to recommend your products, services, and business to others.
- NPS surveys also include a single open-ended question for additional feedback.
- B2B companies use NPS as a customer loyalty measurement, growth indicator, means to gain competitive advantage, and a way to better understand customer needs.
- In general, an NPS of 0-30 is considered good, 30-70 great, and above 70 excellent. A negative NPS score indicates a need for improvement.
- High-engagement industries (like consulting or tech services) see higher NPS scores than other industries like SaaS or cloud hosting.
What is the Net Promoter Score?
The Net Promoter Score was developed in 2003 by Bain & Company partner Fred Reichheld, with the goal of determining how well a company develops customer relationships worthy of earning loyalty and retention.
More specifically, NPS measures the likelihood that customers will recommend a company’s products or services to others. It’s based on a single question: “On a scale of 0-10, how likely are you to recommend our company to a friend or colleague?”
Respondents are classified into three categories: promoters (rating 9-10), passives (rating 7-8), and detractors (rating 0-6). The NPS is then calculated by subtracting the percentage of detractors from the percentage of promoters, resulting in a score ranging from -100 to +100.
In the B2B world, where 88% of customers seek out word-of-mouth referrals and 75% say they’re a key influencer in their purchase decisions, Net Promoter Score is a critical indicator of an organization’s potential for growth.
How Do B2B Businesses Use Net Promoter Score?
Simply tracking Net Promoter Score won’t do much for your business. To make it a metric worth measuring, it needs to be leveraged for measuring important performance indicators. Here are some of the most important ways companies are using NPS to understand current performance and improve for the future:
Customer Loyalty Measurement
Net Promoter Score provides a straightforward and standardized way to assess customer loyalty and advocacy in the B2B space. By understanding how likely customers are to promote and recommend their offerings to others, they can gain insight into customer satisfaction and future revenue generation potential.
Growth Indicator
A high NPS indicates a strong base of loyal customers who are likely to continue doing business with the company and may even refer new clients. This positive word-of-mouth can drive organic growth and reduce customer acquisition costs in the B2B sector. As such, businesses can use NPS to predict growth trajectory.
Competitive Advantage
By tracking and comparing NPS scores with industry benchmarks, B2B companies can better understand where they stand in relation to their competitors. A higher NPS signifies a competitive advantage, as it reflects a greater customer preference and differentiation in the market, while a lower score indicates a need for improvement.
Actionable Feedback
Net Promoter Score surveys also typically include a single open-ended question: “What is the primary reason for your score?” This question gives customers an opportunity to provide open-ended feedback and provides companies a glimpse into their brand perception among their target audience.
By collecting and analyzing qualitative data from this part of the NPS survey, companies can evaluate the strengths and weaknesses of their offerings from the customer’s perspective and make strategic decisions about product/service improvements and optimizations.
Customer Retention and Churn Prevention
A low NPS score indicates a higher proportion of detractors, who are more likely to churn or discontinue business relationships. By addressing the concerns of detractors and elevating their experience, B2B companies can improve customer retention rates and reduce customer churn.
B2B Net Promoter Score Benchmarks
An important part of using NPS as a performance metric is understanding B2B Net Promoter Score Benchmarks—what makes for an excellent, fair, or poor score.
In general, a score between 0-30 is considered good, a score above 30 is great, and one above 70 is excellent. A negative score indicates a serious customer satisfaction issue that needs to be immediately addressed.
But these are averages, and exact B2B Net Promoter Score Benchmarks can vary depending on your industry. As you can see below, high-engagement B2B industries like consulting and technology services average higher Net Promoter Scores, while industries like SaaS and cloud hosting fall lower on the scale.
It’s important to understand your industry’s average NPS and what factors into that average in order to accurately evaluate business performance and use NPS to improve. Rather than aim for an arbitrary NPS score, aim to exceed industry averages and focus on continuous improvement to enhance customer loyalty.
To benchmark your own score accurately, research averages in your industry, drill down to understand score-impacting factors by region and niche, use your own NPS scores as baseline benchmarks for improvement, and use open-ended feedback as a strategic guide.
Final Thoughts
Evaluating customer feedback and using it to make your business better does not have to be complicated. The Net Promoter Score is one of the most effective ways to simplify this process, giving you a measure you can benchmark against industry averages, direct competitors, and your own past performance.
Perhaps most importantly, systematically conducting NPS surveys and staying responsive to the feedback they include shows customers you value their input and are committed to delivering the best possible customer experience for them.
Michael Brenner is a keynote speaker, author and CEO of Marketing Insider Group. Michael has written hundreds of articles on sites such as Forbes, Entrepreneur Magazine, and The Guardian and he speaks at dozens of leadership conferences each year covering topics such as marketing, leadership, technology and business strategy.