What is a Good Net Promoter Score?
- October 16, 2023
- 12 mins read
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What is the Net Promoter Score (NPS)?
NPS is a widely used metric to assess customer loyalty and satisfaction. It is a customer loyalty score, ranging from -100 to 100, which is used to know how likely customers are to recommend a brand, a product, or a service to others. NPS is measured by asking customers a simple survey question, which goes like this – “On a scale of 0 to 10, how likely are you to recommend this company or product to a friend or colleague?”Based on the response to this simple question, customers can be categorized into three groups:- Promoters (Score 9-10)
- Passives (Score 7-8)
- Detractors (Score 0-6)
Why the NPS Score Matters to Businesses?
The NPS score serves as a valuable tool for measuring customer loyalty and devising strategies to improve customer service. It is used across industries to understand the level and extent of customer loyalty enjoyed by a business.- Using NPS, a business can know the likelihood of customers recommending them to others.
- A higher NPS score suggests that customers are more likely to make repeat purchases and make referrals.
- NPS surveys serve as customer feedback as it has comments or reasons for the scores given by the respondents.
- The Net Promoter Score is very helpful as it lets businesses make data-driven decisions to improve their products, services, and customer experience. Data is important in customer service as 76% of customers expect personalization,
- Since the NPS score groups customers as “promoters”, “passives” and “ detractors”, this kind of segmentation proves very useful for businesses in tailoring their strategies for different groups.
- A business can compare its NPS score to competitors or to industry benchmarks and assess its performance in relation to others.
What is a Good Net Promoter Score?
We know that the Net Promoter Score ranges from -100 to +100 and what is a “good score” can vary depending on the industry and business type. In fact, a good NPS for one company might not be good for another and vice versa. So, a “good”, “bad” or “neutral” NPS score can vary across industries but any positive score over 0 is considered good since it indicates some loyalty and satisfaction from customers. To know what is a good NPS score, you need to understand a few things –- If the NPS score is less than 0 (zero), or if it’s negative, it should be a cause of concern to the business.
- A positive NPS score, no matter what it is, should be seen as some level of loyalty.
- So, an NPS score above “zero” can be considered good.
- Any score above “50” is seen as impressive while an NPS score over ‘70’ is excellent.
- Similarly, no matter what your NPS score is, it can be termed good only when it matches or exceeds the industry average. If it does not, it can never be termed as good.
- A positive NPS score below the industry average can never be considered good
- When you have a negative score, it should be a great cause of worry for two reasons – first, it indicates you have more customers not willing to refer you to others, and second, you have more customers who might spread negative word-of-mouth about your business.