How's Your NPS? Find Your NPS Benchmarks
This episode might reference ProfitWell and ProfitWell Recur, which following the acquisition by Paddle is now Paddle Studios. Some information may be out of date.
Originally published: May 9th, 2018
NPS or net promoter score is trending down across the board. But are the products we are building today really worse than they were 5 years ago? As the data suggests, with competition increasing it's getting tougher to drive a memorable experience that returns high NPS, but your brand, support, and speed to ship new features can help.
On this episode of the ProfitWell Report, Christian Holmsen, CEO at Rezstream asks us to look at how NPS has changed over the years and what seem to be the main drivers of higher NPS. To answer Christian's question, let’s look at the NPS data from just over five thousand subscription executives and nearly twenty five thousand consumers.
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NPS Trending Down
To not bury the lede - net promoter score across different industries and ARPU levels has actually trended downward over the past five years and when cross referencing roughly a dozen factors, brand, usage, and support satisfaction seem to be the main influencers.
Overall, it’s hard to say the products we buy today are worse than the ones we bought a decade ago.
Yet, NPS data tells a different story.
When looking at NPS in both B2B and B2C aggregated across thousands of companies, note that the average Net Promoter Score five years ago was in the upper 20s and low 30s. With a scale of -100 to 100 that’s pretty good, but the average today has dropped to single digits and low teens. Why has NPS performance dropped regardless of industry?
What’s causing the change? Well, frankly consumers have become more and more ungrateful. This isn’t because you’re doing your job worse today than you were five years ago, but you’re certainly in a world where there’s more competition and creating a magical customer experience is just that much harder. But without a great customer experience, you run the risk of creating more customer churn, less customer loyalty, and driving down a good NPS score. And, ultimately, a poor NPS score doesn't bode well for churn and retention rates (regardless of industry).
3 Key Factors to Boost Your NPS
So how do you boost your NPS? When looking at 12 different factors we found you need to focus on brand, support, and the frequency you’re shipping.
Brand
Brand appeared to drive NPS the most. We coded respondents perception of a company’s brand before measuring their NPS. Those customers who perceived a company’s brand positively had over double the NPS as those who were neutral. Negative perception just tanked NPS as to be expected.
Support experience
Customer service and support perception showed similar results with positive perceptions of a company’s support showing 50-70% higher NPS than those customers with neutral perception.
Frequency of updates
Finally, the frequency at which you ship new features or products showed a positive trend, as well with customers who perceived the company as shipping new features and functionality often having 30-40% higher NPS than those who perceived the company as shipping infrequently.
Of course, many of these factors compound on one another, but in isolation the story they tell is that momentum and brand is crucial to customer satisfaction. Long gone are the days where a product just needed to work in order for your customer to love you and the expectations will continue to increase as the B2B and B2C products in our world of recurring revenue become more and more magical. The important part is getting feedback from customers on your NPS survey. Without feedback and responses, you'll have no way to measure your improvements.
Want to learn more? Check out our recent episode: Driving Higher ARPU at Signup with Value Metrics and subscribe to the show to get new episodes.
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You've got the questions,
and we have the data.
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This is the ProfitWell Report.
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Hey, Patrick. Christian
from Rezstream here.
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We recently implemented an
NPS tool to better track
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satisfaction amongst
our hotel clients.
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So my question to you is, how
has NPS changed over the years?
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And what seems to be the main
drivers in your overview?
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Great question, Christian.
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Because NPS or Net Promoter
Score has been something that's
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been fascinating
for quite some time.
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To answer your question,
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let's look at the NPS data
from just over five thousand
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subscription companies and
nearly twenty five thousand
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subscription consumers.
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To
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not bear the lead,
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Net Promoter Score across
different industries at ARPU
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levels has actually trended
downward over the past five years.
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And when cross referencing
roughly a dozen factors,
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brand usage and
support satisfaction
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seem to be the main influencers.
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Overall,
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it's hard to say that products
that we buy today are worse
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than the ones we
bought a decade ago.
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Yet, NPS data tells
a different story.
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When looking at NPS in both
b to b and b to c aggregated
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across thousands of companies,
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note that the average NPS score
five years ago was in the upper
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twenties and low thirties.
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With a scale of negative
a hundred to a hundred,
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that's pretty good.
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But the average today has dropped
to single digits in low teens.
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So what's causing this change?
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Well, frankly, consumers have
become more and more ungrateful.
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This isn't because you're doing
your job worse today than you
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were five years ago,
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but you're certainly in a world
where more competition and
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creating magical experiences
is is just that much harder.
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So
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how do you boost your NPS?
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When looking at twelve
different factors,
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we found you need to
focus on brand, support,
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and the frequency
you're shipping.
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Brand appeared to
drive NPS the most.
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We quoted respondents
perception of a company's brand
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00:01:43,190 --> 00:01:45,030
before measuring their NPS.
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Those consumers who perceive
a company's brand positively had
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over double the NPS as
those who were neutral.
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Negative perception just
tanked NPS as to be expected.
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Support perception showed
similar results with positive
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perceptions of company support
showing fifty to seventy
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percent higher NPS than those
customers with neutral perceptions.
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Finally, the frequency at which you ship
new features or products showed a positive
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shipping new features and
functionality often having
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thirty to forty percent higher
NPS than those who perceive the
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company as shipping
infrequently.
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Of
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course, many of these factors
compound on one another.
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But in isolation,
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the story they tell us is
that momentum and brand are crucial
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to customer satisfaction.
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Long gone are the days where
a product just needed to work in
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order for a customer
to love you,
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and the expectations will
continue to increase as the b
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to b and b to c products in
our world of recurring revenue
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become more and more magical.
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Well,
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that's all for now.
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If you have a question,
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shoot me an email or video
to p c at profitable dot com.
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Let's also thank Christian from
RezStream here for sparking
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this research by by clicking on the
link below to give him some love.
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We'll see you next week.
