Copyright © 2011 Fred Reichheld and Bain & Company, Inc.
All rights reserved
No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.
First eBook Edition: September 2011
ISBN: 978-1-4221-7335-0
Much has changed in this revised and expanded edition—but not its dedication, which remains steadfast: to my wife Karen, with love and loyalty.
Contents
Introduction: From Score to System
The Fundamentals of the Net Promoter System
1. Bad Profits, Good Profits, and the Ultimate Question
3. How NPS Drives Profitable Growth
4. The Enterprise Story–Measuring What Matters
7. Economics and Inspiration: The Dual Imperatives
8. Close the Loop with Customers
9. Organize for the Long Journey
Appendix: Advice for the Journey
This book shows how companies can put themselves on the path to true growth—growth that occurs because their customers and employees love doing business with them and sing their praises to neighbors, friends, and colleagues. This is the only kind of growth that can be sustained over the long term. Acquisitions, aggressive pricing strategies, product line extensions, cross-sell strategies, new marketing campaigns, and all the other implements in a CEO’s toolkit may give a company a short-term boost. But if these gambits don’t ultimately result in delighted customers, the growth won’t last. So it is with market share. A dominant position in the marketplace often gives a company economic advantage. But again: if that potential isn’t utilized to make customers smile, neither the advantage nor the dominant share will last.
This lesson has taken on new importance as a quiet revolution sweeps across the business world. The revolution, like many others shaking up the current world order, has been stoked and accelerated by the development of social media tools. Customers and employees blog, tweet, and text about their experiences in real time, overwhelming the carefully crafted messages proffered by advertising and public relations departments. Power is shifting from the corporation to those who buy from it and those who work for it.
To come out on top in this revolution, business leaders must find ways to enable frontline teams to delight customers. Most leaders want customers to be happy; the challenge is how to know what customers are feeling and how to establish accountability for the customer experience. Traditional satisfaction surveys just aren’t up to this job. They ask too many questions and inspire analysis instead of action. Financial reports aren’t up to it, either. As we’ll see, conventional accounting can’t even distinguish a dollar of good profits—the kind that lead to growth—from a dollar of bad profits, which undermine it.
What the book offers instead is a wholly new approach. Companies begin this approach by asking one question—the Ultimate Question—in a regular, systematic, and timely fashion. Based on the answers, a company can identify the customers who love it, those who hate it, and those who don’t care much one way or the other. It can compile a simple, easily understandable score—its Net Promoter® score—that shows how it is faring on the customer-relations front. It can track that score week in and week out, in much the same way every business already tracks its financial performance.
Then the company can begin the real work: closing the loop with customers, listening to what they have to say, fixing the problems that lead to unhappiness or anger, and creating experiences that lead to more and more delight. It can engage every employee in the quest to build a true customer focus into their daily operations. Just as managers now use financial reports to make sure they and their team members are meeting profit goals, they can use the Net Promoter score to make sure they are meeting customer-relationship goals. This system is helping companies win the quiet revolution by illuminating the path toward greatness.
The companies that have pioneered the use of the system—you will read about them in the chapters that follow—have already learned this lesson and are way out ahead of their competitors. They range from small neighborhood businesses to Silicon Valley superstars and global giants such as General Electric. (“This is the best customer-relationship metric I’ve seen—I can’t understand why any of you wouldn’t want to try it!” exclaimed General Electric CEO Jeff Immelt to a meeting of his senior leaders in 2005.) Different as they are in other respects, these companies have one big thing in common, which is that they take seriously the principle of the Golden Rule: treat others as you would want to be treated. These businesses want customers who are so pleased with how they are treated