The Ultimate Question 2.0 (Revised and Expanded Edition). Fred Reichheld

needed a way of drilling deeper if they were to understand the root causes of promotion and detraction.

      In addition to these customer-relationship scores, some of the business units began to add the “would recommend” question to the brief transaction surveys they were already using to manage the quality of their various interactions with customers. These responses provided a steady flow of NPS insights that illuminated hot spots and trouble spots relating to customers’ experience with the company. For example, Intuit had decided to charge all QuickBooks customers for tech-support phone calls—even new customers who were having trouble getting the program up and running. Net Promoter scores for customers who called tech support were drastically below the QuickBooks average, and it was immediately apparent that the policy was at fault. The business team tested several alternatives to see what effect they would have on scores; eventually the team found that the most economical solution was to offer free tech support for the first thirty days of ownership. Net Promoter scores from customers who called tech support increased by more than 30 points as a result.

      The Consumer Tax Group, home of the industry-leading TurboTax product line, faced a particularly tough challenge. TurboTax’s market share in the increasingly important Web-based segment had plummeted by more than 30 points from 2001 to 2003. Managers in the division knew that they had to get a better handle on customer issues. One successful initiative was the creation of a six-thousand-member “Inner Circle” of customers whose feedback would directly influence management decisions. Customers who registered to join this e-mail community were asked some basic demographics and were also asked the “would recommend” question so that the company could determine whether they were promoters, passives, or detractors. Then they were asked to suggest their highest-priority improvements for TurboTax and to vote on suggestions made by other Inner Circle members. Software sifted the suggestions and tracked the rankings, so that over time the most valuable ideas rose to the top of the list.

      The results were eye-opening. For detractors, the top priority was improved quality of technical support. To address that issue, the management team reversed a decision made two years earlier and returned all phone tech-support functions from India to the United States and Canada. The team also boosted tech-support staffing levels. The second-biggest priority for detractors was to improve the installation process. That became a top priority for TurboTax’s software engineers, who in the 2004 edition of the program achieved a reduction of nearly 50 percent in installation-related tech-support contacts.

      Promoters had a different set of priorities. Topping the list was the rebate process: some complained that it took longer to fill out all the rebate forms than to install TurboTax and prepare their taxes! After getting this feedback, the division general manager assigned one person to own the rebate process and held that individual accountable for results. Soon the proof of purchase was simplified, the forms were redesigned, the whole process was streamlined—and turnaround time was reduced by several weeks. Over time, it became clear that even these improvements were not sufficient, and the division finally realized that the right solution for the customer would be to eliminate rebates entirely. It made this bold move as part of a complete repricing strategy.

      The Consumer Tax Group continued to study Net Promoter scores, examining various customer segments. New customers, the group found, had the lowest scores of any cluster. Executives called a sample of these customers to find out why, and what they discovered was startling and unsettling. All the features that had been added year after year to appeal to diverse customer groups with complex tax needs had yielded a product that no longer simplified the lives of standard filers. In fact, more than 30 percent of new customers never used the product a second time. In response, the management team issued new priorities for the design engineers: make the program simpler. Soon the interview screens were revised according to new design principles. Confusing tax jargon was eliminated—a new editor hired from People magazine got the job of making the language clear and easy to understand. In tax year 2004, for the first time, the NPS of first-time users was even higher than that of longtime users.

      Intuit’s Results: Happy Customers and Shareholders

      Over the two-year period from the spring of 2003 to the spring of 2005, Net Promoter scores for TurboTax jumped. The desktop version, for instance, rose from 46 to 61 percent. New users’ scores climbed from 48 to 58 percent. Most important, retail market share, which had been flat for years, surged from 70 to 79 percent—no easy feat in a maturing market. Scores improved at most of Intuit’s major lines of business. Thanks to this success, Net Promoter scores became part of the company’s everyday operations. “Net Promoter gave us a tool to really focus organizational energy around building a better customer experience,” said Steve Bennett, who was CEO at the time. “It provided actionable insights. Every business line [now] addresses this as part of their strategic plan; it’s a component of every operating budget; it’s part of every executive’s bonus. We talk about progress on Net Promoter at every monthly operating review.”

      At the firm’s 2004 Investor Day, when executives update securities analysts and major investors on the company’s progress, challenges, and outlook for the future, Cook and Bennett unveiled their renewed commitment to building customer loyalty. They described how Net Promoter scores had enabled the team to convert the historically soft goal of building better customer relationships into a hard, quantifiable process. Just as Six Sigma had helped Intuit improve its business processes to lower costs and enhance quality, Net Promoter scores were helping it set priorities and measure progress toward the fundamental goal of stronger customer loyalty.

      Yes, there was still a long way to go. But Cook and Bennett pointed out that the new initiative was simply a return to the original roots of Intuit’s success. As the company grew larger, the need increased for a common metric that could help everyone balance today’s profits against the improved customer relationships that feed future growth. “We have every customer metric under the sun,” said Cook, “and yet we couldn’t make those numbers focus the organization on our core value of doing right by the customer. The more metrics you track, the less relevant each one becomes. Each manager will choose to focus on the number that makes his decision look good. The concept of one single metric has produced a huge benefit for us—customers, employees, and investors alike.”

      By showcasing Net Promoter scores as the central metric for revitalizing growth in the core businesses, Cook and Bennett were signaling to their own organization that this was not some here-today, gone-tomorrow corporate initiative. On the contrary: it was a business-critical priority so important to Intuit’s future that it deserved to be understood by shareholders. Intuit’s leaders were also signaling to shareholders that at the next Investor Day, these investors would be entitled to learn more about the company’s progress on Net Promoter scores. Maybe the event even foreshadowed the day when all investors will insist on seeing reliable performance measures for customer-relationship quality—because only then can investors understand the economic prospects for sustainable, profitable growth.

      Meanwhile, Intuit keeps on finding ways to delight customers and convert more of them into promoters. Most recently, the company introduced an innovative personal tax product that makes it easy to prepare and file some returns via smart phones. Customers with fairly simple tax returns take a photo of their W-2 with their smartphone device, and the information automatically imports and populates the appropriate parts of the returns. After answering a few simple questions, customers can view, print, and file their tax return without ever leaving the smartphone, all for a remarkably low price. This new product, SnapTax, was released nationwide in tax year 2010 and generated an NPS of 72, the highest score for a new product in the company’s history.