NPS Blog
Treating People Right
People often ask me why I got focused on customer loyalty, and why I am still so obsessed with it after three decades of studying the topic. The answer is easy; customer loyalty drives extraordinary financial results. What’s not easy is earning that customer loyalty. The financial results are the byproduct of complex and intense efforts to build the right kind of community where relationships are worthy of loyalty, and to measure your progress. It’s not just talking about greatness, it’s figuring out how great you really are—every day and in every location—and using that information to drive the right actions.
For more on what companies with exceptional loyalty do to earn it, take a look at this Harvard Business Review video.
The real customer protection plan
Returning a rental car to the airport during a recent trip to Miami, I encountered an embarrassed rental agent who told me I’d be charged an extra half-day for being 35 minutes late with the car, plus a small fortune for the gas I had forgotten to buy.
What employee wouldn’t be embarrassed to have to treat a customer that way? In a well-meaning but futile effort to make amends, he suggested I get the company’s “protection plan” next time I rented. Protection plan? Was this a car rental company or organized crime? Unfortunately, many companies today find they can make a profit by abusing customers—and embarrass their employees in the bargain.
Living up to the Golden Rule—and avoiding bad profits—are recurring themes in the Ultimate Question 2.0. In this recent video, shot by Harvard Business Review, I talk about both—or what you might call the real customer protection plan.
A speed summary of The Ultimate Question 2.0
Paul Marsden, who blogs about using NPS in brand advocacy recently wrote a “speed summary” of The Ultimate Question 2.0. We thought he did a great job, so we asked him if we could reproduce it here:
Speed Summary: The Ultimate Question 2.0
By Paul Marsden
Many of you will have probably already read the new, revised and expanded edition of Fred Reichheld’s business bestseller The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World, written with Rob Markey.
It’s certainly worth reading; in my view The Ultimate Question 2.0 is the single most significant business book recently published—both inspiring and practical it’s a blueprint for business growth through ‘good profits’—profits derived from enriching the lives of your customers.
But for the time-poor among you, here’s a ‘speed summary’ of the key points chapter by chapter. Continue reading
A conversation with five CEOs
Last September, I played host to five CEOs who gathered to talk about what Net Promoter meant to them and to their companies. A video from that conversation is now available on the site, and it offers a rare chance to hear five executives in one room talk about why they believe Net Promoter is ultimately far more than a just measure of customer loyalty.
“What attracted us to Net Promoter,” says Rackspace CEO Lanham Napier, “is we were thinking about how to measure greatness.”
“Net Promoter,” says Walt Bettinger, CEO of Charles Schwab Corporation, told employees “it is safe to always do the right thing,” even if that means challenging the CEO himself.
For more from these CEOs, and from eBay’s John Donahoe, Intuit’s Brad Smith, and Bain & Company’s Steve Ellis, check out the video.
- Posted in Leadership and communication
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Transform your employees into passionate advocates
The following post originally appeared on the Harvard Business Review Blog Network.
Employee happiness is becoming a hot topic among CEOs and in boardrooms, and it’s about time. The current issue of Harvard Business Review, which includes a series of articles focused on employee happiness, is just one more sign of the growing recognition that happy, engaged employees are more productive and generate better outcomes for their companies.
But there’s also a risk in all this attention to “happiness.” Happiness for its own sake is not the right outcome to seek. If you want happy employees, you can just pay them more. You can give them more time off. You can give them free lunches by celebrity chefs. Only a few of the things that make employees “happy,” however, result in real, sustained benefit for the company. As Gretchen Spreitzer and Christine Porath note in one of the recent HBR articles, “It’s not about contentment, which connotes a degree of complacency.” Continue reading
Net Promoter on a napkin
David Mitzenmacher drew a great summary of the Net Promoter system—on a napkin—and posted it to his blog.
As the co-author of a 267-page book on the subject, I should probably find this vaguely disturbing. Instead, I’m really impressed. Nice job, Dave!
Measuring happiness
This post originally appeared on Forbes.com.
Happiness has been a hot topic in business lately and I’ve been delighted to see such a serious subject get the attention it deserves in the corner office. In the Jeffersonian tradition, the “pursuit of happiness” is considered an inalienable right on par with life and liberty. Yet, until recently, managers here and elsewhere in the world made little effort to rigorously measure or manage happiness.
That was part of the reason I created the Net Promoter score (NPS) nine years ago. When I was considering various names for the new metric, I thought seriously about calling it the Net Happiness Score. We describe NPS as a measure of loyalty, but the overarching objective of the framework is to make people happy—so happy that they recommend a product or company to friends and loved ones so they can benefit from a similar experience.
Of course, I ended up calling it NPS. I decided against NHS as a name because I feared it might sound too corny or whimsical to hard-minded business execs, causing them to overlook the very real connection between how customers feel about their experience with a company and that company’s profitable, sustainable growth.
But even today we still maintain a not-so-subtle link between NPS and happiness through the emoticons we use to report the scores. For example, we communicate a Net Promoter Score of 75 with a wall of faces like this:
It’s pretty hard to miss the link between NPS and the emotional energy of happy or unhappy people when looking at a picture like this. Using emoticons to represent promoters, passives and detractors requires little additional explanation. What’s more, the happy, passive and angry faces illustrate that making people happy and earning their loyalty creates emotional outcomes, not just economic ones.
The turnaround of Charles Schwab
We talk and write a lot about the economic benefits of Net Promoter. But in the newest video in our Behind the Quiet Revolution series, we talk about something more: how Net Promoter can help build, or restore, a personal legacy.
In 2004, Charles Schwab Corporation was in such bad shape that the board asked its recently retired founder, Chuck Schwab, to return as CEO. He came back to a company that wasn’t just in financial trouble, but one that he felt was treating clients poorly.
Chuck Schwab had always tried to make a focus on clients part of the company’s DNA, and in December 2005, I was asked to talk to 600 of the company’s leaders. Shortly afterwards, the company put the Net Promoter framework at the core of its change efforts and began a massive—and ultimately successful—turnaround, which we describe in detail in The Ultimate Question 2.0.
- Posted in Author Q&A, Leadership and communication
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Wharton’s Peter Fader interviews Rob
Wharton marketing professor Peter Fader interviewed me recently about The Ultimate Question 2.0. Fader is co-director of The Wharton Customer Analytics Initiative, and recently wrote his own book on customer centricity, so as you might expect, he asked me some really thoughtful questions. You can read a transcript of the interview, or watch it here:
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Fred’s interview on Canada’s BNN
Earlier this week, I visited the University of Toronto’s Rotman Business School for a speaking engagement hosted by Dean Roger Martin.
While in Toronto, I was also invited for an interview on BNN, one of Canada’s leading business networks. Host Frances Horodelski asked me “Why isn’t everybody doing this? Why isn’t everybody saying if I keep my customers happy, if I treat them like kings, I’ll get more customers and my business will grow?”
Great question, Frances. Of course, more and more companies are saying just that. You can watch the full interview here:
Business Day Interview: Customer Loyalty & Corporate Success (November 16, 2011)
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