A fresh look at the impact of customer experience on profits and how to keep the customer at the center of business decisions.
“How likely is it to come back? [company name] To a friend or family member? This question changed the face of customer satisfaction back in 2006.
It all started with Fred Richchild, founder of Bain and Company’s Loyalty Practice. Reicheld wanted to know if there was a relationship between happy customers and profitability. His research revealed that in a sea of survey questions, this simple question was the best predictor of profitability. This is called ‘Net Promotion Score’. And companies went to this concept.
In his new book, Achieving the goal: the unbeatable strategy of loving customers, Fred Richchild strives to return businesses to the profitable power of customer experience.
Evolution of net promotion points
It’s a simple math process. Ask customers to rate the likelihood of referring the company to their friends and family on a scale of 0 to 10. Those who give a rating of 9 or 10 are called promoters. Those who give a rating of 7-8 are negative and those who give a rating of 0-6 are critics. You subtract the critics percentage from the promoters percentage and voila! You have a net promotion points. The higher your Net Promoter Score, the more loyal customers you will have. The more loyal your customers are, the higher your company’s profits.
Unfortunately, over time, the spirit of Net Promotion Score was lost. When Bain surveyed entrepreneurs, they found that only 10% believed that their company’s primary purpose is to maximize value for customers.
“Many companies still operate in the old-school financial capitalist mindset in which maximizing shareholder value is front and center.”
Return the love to the promotion network
If you’re already familiar with the concept of Net Promoter Score, you’ll love”win over purposeIn the first part of the book, Reicheld provides a brief history of his intention behind Net Promoter Score.
One of the things I tried, but didn’t realize, is that Bain made the entire Net Promoter Score process “open source”. In other words, any company can use the account and question to measure customer experience.
The great thing about this decision is that the Net Promoter Score spread like wildfire! The not so great thing is that most companies didn’t have access to the support and expertise behind this method.
This is Reicheld’s mission with “win on purpose. He wants to return the love to the customer experience.
In his research, Reicheld discovered that the referral or recommendation was really true Out of love, aiming to improve the life of a friend or family member. Good people will not enthusiastically recommend a company they know pollutes the environment or abuses its employees…An enthusiastic recommendation that looks into the heart, soul, and primary purpose of the company.”
‘Win on purpose’ Refocusing on the customer experience
in a ‘Win on purpose’ Reicheld takes a strong stand and is committed to using this powerful measuring tool the way it was intended; To improve customers’ lives. He even introduced a new metric called “Earned Growth Rate” to bolster a promoter’s net score.
This is a quick trip through the book.
The first two chapters of the book emphasize the power of having a winning purpose and how staying focused on that purpose actually leads to greatness.
Reicheld then switches to missionary mode where he attempts to explain the concept and benefit of “loving your customer.” If you are a small business owner struggling to compete with the big ones, then pay attention to these chapters! This is your strength!
As companies grow, they have to add systems, processes, and policies in order to create a great customer experience. Ironically, these same systems can actually create a harrowing experience.
The rest of the book delves into the structures of these systems and how an enterprise organization can take a fresh look at how a more humane approach to an impractical system can be presented.
Small business lessons fromwin on purpose
Don’t shy away from customer service. While it’s tempting to start cutting costs, your profits will benefit the most from investing in customer experience.
Record teams in improving customer experience. Just because an employee doesn’t communicate with customers, doesn’t mean it doesn’t affect the experience.
Put the customer at the center of every decision. Your business grows because of your ability to meet customer needs in a specific and unique way. Make your finger aware of what your customers want and need – and even what they may not know they want or need.
Keep hiring and promotion hinged on customer-centric principles. This is a big one. No executive or employee should thrive at the expense of the customer experience.
These are all good things. I’m sure you nodded in agreement as you read through this list. But, if our actions were to judge our ability to keep the customer experience at the center, we would be deficient.
is being “win over purpose“Too perfect?
As I read and understand “Winning on purpose”, I wondered if it was too perfect. It is clear that companies have allocated net promotion points to suit their needs and objectives. So much so that Reicheld has been moved to get us back on what really matters.
Now, larger organizations are likely to pay exorbitant consulting fees to Bain and Company to get the focus back on the customer so that they are as profitable as possible.
As a small business owner, you can learn from these lessons as you grow. ‘Win on purpose’ It reminds me that the lesson I learned in graduate school 30 years ago is still true today; “Making money and doing the right thing are not two opposite principles.”