One of the great philosophers said that a person who sets out to be happy probably won’t achieve his goal. On the other hand, if a person sets out to help others and make the world a better place, he will probably end up happy.
The same logic applies to companies that set the vague goal of maximizing shareholder value, according to Roger Martin, former dean of the Rotman School of Management at the University of Toronto. In reality, successful companies create products their customers want and provide exceptional service—and increase shareholder value in the process.
Roger, who’s the author of 10 books, including Getting Beyond Better and Playing to Win, and a frequent contributor to Harvard Business Review, shares his business philosophies in this podcast episode. You can listen to our conversation on iTunes, Stitcher or through the player below.
Social media has opened up vast new ways for companies to get to know their customers—what they like, what they hate and where they shop. But anyone with a Twitter handle knows that social networks are littered with inane noise.
Customer loyalty programs, such as the Net Promoter System, and social media scraping have advanced along largely separate paths of development. However, there’s a huge opportunity for companies willing to combine them—and cut through the dissonance.
I discuss how companies are bringing together their Net Promoter and social media efforts in my latest blog post on LinkedIn.
Read the post: Here’s a Better Use for Social Media
People like to ask about the significance of the likelihood-to-recommend question—”how likely would you be to recommend a product or service to a friend?”— and why it was chosen over others.
The answer is simple: It offered the best prediction of consumer behavior in early testing. In other words, customers who give a strong ratings are more likely to buy the product again and promote the product to their friends.
By focusing on a single question, the Net Promoter System eliminates unnecessary complexity. In this short episode of the podcast, Fred Reichheld and I discuss the origins of the system’s central question. You can listen to the short on iTunes, Stitcher or through the player below.
Steve Jobs. Charles Schwab. Howard Schultz. They all spotted an unmet customer need and made it their mission to meet it. They also founded iconic companies that started out as disruptors only to struggle as bureaucracy and distraction set in. In each case, it took the founder’s return to get the company back on track.
It’s a story that will be played out again and again in business. But it doesn’t have to.
According to Bain Partner Chris Zook, these companies have battled the predictable crises of growth. In The Founder’s Mentality, a new book Chris cowrote with Bain’s James Allen, Chris talks about how companies can hold on to the spirit of their founders as they grow. No surprise: It requires companies to focus on their customers.
When it comes to surveys and statistics, it’s easy to get mired in models and analysis. Perhaps you have a rich tranche of customer data and you know you’ll find a critical new insight if you could devote a team to crunching the numbers. This kind of thinking rarely leads to long-term change because it’s missing a critical element: immediate action.
Millennium Mat has developed a unique culture in which employees make production decisions for their teams and share in the financial benefits of their success. The leaders of these teams are called CEOs and they steer everything from hiring to process. Their employees, whom Millennium calls partners, are expected to bring forth their performance-improving ideas. Companies of all sizes and in all industries could learn a lot from Millennium’s approach, which has propelled its business to almost 40 countries.
Ian Malpass, founder of Millennium Mat, joined me on the podcast to discuss what it takes to forge a culture that’s truly self-directing and self-correcting. You can listen to our conversation on iTunes, Stitcher or through the player below.
Large companies tend to focus on traditional financial forecasts—earnings estimates, sales targets and so forth. After all, it’s how the market measures their value and whether they’re worthy of investment.
The intense pressures to meet these goals can cause some executives to make short-term cuts that can undermine their long-term strategies. Some would argue that we need new gauges of corporate strength. The Net Promoter Score is a very powerful measure, but so is another: customer lifetime value. This measure helps companies identify their most valuable customers and build those relationships.
Peter Fader, a marketing professor at the Wharton School of the University of Pennsylvania, returns to the Net Promoter System Podcast to discuss the importance of measuring customer lifetime value. He recently founded a company called Zodiac that specializes in estimating customer value.
The Net Promoter System’s “outer loop” mechanism supports improvements that go beyond the individual or team.
Its explicit purpose is to prioritize and support the kind of customer-friendly changes that employees and teams can’t make on their own. But there’s an implicit purpose as well. An effective outer loop makes employees feel supported. It gives them a voice in the firm’s priorities. It creates confidence that the company’s priorities support customer centricity—and that leadership is putting its money where its mouth is.
Read more: The Net Promoter System’s Outer Loop
A lot of companies find themselves a situation in which their competitors are increasingly adding value to their products, while they’re struggling to figure out which features and services might move the needle with customers. The leaders of these companies aren’t sure what level of service will capture more of their market—or if they should even focus on service.
It’s the classic “how to play/where to win” question. Companies can’t invest in everything. To succeed, they must distinguish themselves from competitors. Often this means meeting customers’ deepest needs—aspirations they might not even be aware of.
Bain Partner Eric Almquist has spent much of his career researching these questions. In this episode, he discusses the 30 elements of value that draw customers most to a product or service. Companies that fulfill more of these needs have customers who are more loyal.
Does the Net Promoter Score gauge a customer’s broader relationship with a company or just the customer’s most recent experience? Or both? Who should make follow-up calls to customers? I discuss these questions and more in this short episode of the Net Promoter System Podcast.
The goal of the Net Promoter System is to create a culture that encourages employees to bring energy, enthusiasm and creativity to their jobs.
Developing that kind of culture requires inspiring leaders. We’ve all seen those people who seem born to be leaders. They have an uncanny knack for motivating the people around them. They show gratitude and connect with people in authentic ways.
You might chalk it up to charisma or a rare innate gift. While that might be true, it’s possible that they studied their own behavior and learned how to mobilize the best qualities of their personality.
In this episode, I talk to Bain Partner Mark Horwitch, who has been studying what makes a leader inspiring. He says it comes down to 33 qualities. Most of us have some of them, but none of us have all of them. He says that when we know our strengths, we can develop them into true leadership assets.
Learn more: How Leaders Inspire: Cracking the Code
After all, people use their phones for everything. Consumers surveyed by Bain last year said they would miss their phone more than their wallet. Broadband service and Wi-Fi has become a basic need to businesses, and you’ll rarely see a more agitated customer than the one who can’t access a free Wi-Fi network.
However, many are not delivering memorable customer experiences that make people’s lives easier. My latest post on LinkedIn discusses how the telecom industry could benefit from some simplification.
You can read the post here: Simplify Before Your Customers Hang Up
Huddles are short, interactive team meetings, usually 15 to 30 minutes. These regular get-togethers—often daily or weekly—are a critical element of the Net Promoter System.
These meetings might be brief, but they reconnect employees to a company’s core mission. They reinforce their commitment to serve customers better and create more promoters. They also connect the inner loop mechanism to the outer loop and help speed learning.
In this short episode of the Net Promoter System Podcast, I discuss their role in building customer advocacy and engaging employees. You can listen to the episode on iTunes, Stitcher or in the player below.
It’s a question just about every manager wrestles with: How do I get my employees to do what I want them to do? How do I get them to be more empathetic to customers? To take feedback and make meaningful changes?
Obviously, fair pay is essential, but there’s far more to it. After all, motivating people requires tapping into deep emotional needs for autonomy, purpose and affiliation.
I had the good fortune to sit down with Daniel Pink, author of the 2011 best-seller Drive: The Surprising Truth About What Motivates Us. In the book, Dan breaks down the scientific research on motivation and explains why simple carrot-and-stick approaches rarely result in the behaviors that companies want. I cite his work all the time with clients.
Recommended reading: Your Best Employees Work for Love, Not Money
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