Companies must systematically categorize promoters and detractors in a timely, transparent fashion. The categories and resulting feedback must make intuitive sense to frontline employees, not just to statisticians, and this information must be systematically compiled and communicated throughout the organization so people can take action and track their results. Otherwise, what’s the point?
Companies must create closed-loop learning and improvement processes and build them into their daily operations.NPS doesn’t accomplish anything unless companies actually act on what they learn—unless, that is, they “close the loop” between learning and action. The closed-loop processes can’t be an add-on; they have to be part and parcel of everyday management.
CEOs and other leaders must treat creating more promoters and fewer detractors as mission critical.NPS isn’t something that can be relegated to the market-research department. Earning the loyalty of customers and employees is either central to a company’s philosophy and strategic priorities or it isn’t—and if it isn’t, adopting an improved customer feedback process won’t make much difference.
NPS, in short, isn’t something to be entered into lightly. Which brings us to perhaps the most important lesson of all:
NPS ultimately is a business philosophy, a system of operational practices, and a leadership commitment, not just another way to measure customer satisfaction.
This requires a word of explanation.
For starters, ask yourself: Why would a company even care what its customers and other stakeholders think? Many companies don’t, and most of them seem to get by without going broke. (See all the examples of bad profits in chapter 1.) To be sure, I believe that NPS can make a business more successful. But I also believe that caring about your customers is the right thing to do. It makes for a better company, a better society, and a better life.
Think for a moment about the Golden Rule, the principle that you should treat others the way you would want to be treated if you were in their shoes, in a manner that brings honor and dignity to both parties. In one form or another, the Golden Rule is a pillar of most of the world’s great religions. But it’s hardly foreign to business. Companies such as Southwest Airlines, Four Seasons, and Chick-fil-A make the Golden Rule a centerpiece of their missions. If people can live up to the Golden Rule, they can reasonably assume they are living a worthwhile life; they are having a positive effect on those whose lives they touch. The “how likely” question is merely a practical shorthand for the question of whether you are observing the Golden Rule. It brings the whole thing back to earth, and to business. The purpose of a survey, after all, is not to begin a philosophical discussion or to launch a lifelong relationship. It is to create workable categories and a score that can facilitate action. It is a way of making business relationships better.
But the underlying philosophy is important to examine, because it reflects the values that inform and guide an organization. If you truly care about your company’s effect on its customers’ lives, you won’t even be tempted to stop with a score. You will use the score as a prod, an incentive, a reminder that you can get better as an organization. You will begin to hire people, as Ron Johnson of Apple’s retail division puts it, who “care about a customer’s heart, not just her pocketbook.” You will redirect your strategic investments and redesign your processes to create more promoters and fewer detractors, not just to increase your profits (though it will) but because it’s the right thing to do. You will also begin to extend NPS, so that it measures the attitudes and behaviors of other stakeholders in the business—employees, major investors, suppliers, and other business partners—and unlocks insights into how to earn their loyalty. Organizations touch many lives, and you need to know what your company’s impact is wherever and however it affects people.
Every leader of a business leaves a legacy when he or she departs, and it is that legacy by which a leader is judged. If you want to leave a legacy that extends beyond profits, a legacy of caring about customers and employees and about the kind of company you have built or contributed to, a legacy of enriching the lives you touched, NPS is an indispensable tool.
The Challenge of Making NPS Work
The ideas behind NPS seem so simple and intuitive that executives may be lulled into thinking that implementation will also be simple. It isn’t. The companies that have adopted NPS have learned that it takes time and hard work to establish reliable, trustworthy measurements, to understand what the scores are telling you, and to create closed-loop processes that actually bring about change. NPS touches every part of the organization, including finance, operations, marketing, product design, human resources, and information technology. It reaches from the CEO and board all the way to the frontline employees who serve customers. It challenges established practices, priorities, and decision processes. Simple it may be, but it requires serious commitment on the part of senior leaders. Without that commitment, companies are likely to experience loss of momentum, confusion, resistance to new ways of doing things, and other pitfalls. Support and perseverance from the top of the organization are essential.
You may also find that merely broaching the idea of NPS runs into a wall of opposition from a group of critics that practitioners have dubbed Net Pro-moaners (discussed further in chapter 10). No surprise here: there’s already a well-developed industry that purports to measure customer and employee satisfaction through long and largely ineffective research surveys, and an open-source solution such as NPS threatens the economic models on which most of the research firms depend. The firms’ closed-source, black-box models are designed so that their algorithms remain closely guarded secrets. If the algorithms weren’t secret, no one would pay these companies to use their models or seek advice on how to boost scores.
With NPS, by contrast, every company is welcome to adopt the process for free, and its transparency makes it easy to understand and improve. Little surprise that market-research traditionalists have scurried to write white papers and academic articles claiming that NPS doesn’t work. Similarly, Encyclopedia Britannica does not hold Wikipedia in high regard, and proprietary software makers have little nice to say about open-source technologies. It’s worth remembering the famous Upton Sinclair dictum: it is difficult to get a man to understand something when his salary depends upon his not understanding it.
When you shake up the existing order, you can expect opposition and obstacles. So what? This is a destination that is worth the trip, a journey that is worth the trouble. The knowledge you can gain from implementing the Net Promoter system is in fact priceless. It will help you run a better business, do more satisfying work, and build relationships that yield a more fulfilling life.
Before I close this introduction, I want to take the opportunity to welcome my colleague Rob Markey to a more public role on my writing team. Rob and I have worked together at Bain for almost twenty years now. He was an important reader and adviser on the first edition of this book, and he has played such a substantial role in the creation of this edition’s new material that he deserves to be recognized as coauthor. Rob leads the NPS Loyalty Forum and is the head of Bain’s Global Customer Strategy and Marketing practice. His depth of experience working with clients on NPS-related issues is unparalleled. This book is the stronger for his contributions.
In years to come, we intend to write more books about the Net Promoter system. But this book provides the starting point, the foundation. It will help you understand what the movement is all about, where it came from, and what it hopes to accomplish. And it will give you a taste of the remarkable success stories of companies that practice—and continue to learn from—the system. Perhaps someday we will be writing about your company as well. I hope so.
—Fred Reichheld
Wellesley, Massachusetts
April 2011