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What is this book about
According to Fred Reicheld, success in business and in life depends on whether the company makes people's lives better or worse. Acquisitions, aggressive pricing strategies, expanding product lines, cross-selling strategies, new marketing campaigns and many other tools in the manager's toolkit can provide quick results in the short term. If at the same time satisfied customers do not appear, then the company's growth will be short-lived.

Who is this book for?
This book is for anyone who influences their shareholders, investors or clients in one way or another.

Why we decided to publish this book
The theme of loyalty is close and familiar to us.

Our first book was Customers for Life. In the same book, business loyalty guru Fred Reicheld recommends a methodology that is based on examining a key question vital to the future of any company: "Will they recommend it to their friends?" By asking this question to your customers, you can determine which of them contribute to the growth of the number of your customers, and whose loyalty is short-lived and who will gladly defect to your competitors.

Book chip
A company can divide its customers into those who love it, those who hate it, and those who don't care about it. To do this, she should use a simple and understandable indicator - the Net Promoter Score, which shows how she has succeeded in building relationships with clients. This index can be tracked on a weekly basis, in much the same way that every company already tracks its financial results.
Today, this indicator is used in such famous companies like Apple, Allianz, American Express, Zappos, Intuit, Philips, GE, eBay, Rackshare, Facebook, LEGO, Southwest Airlines and JetBlue Airways.

From the author
"If you really care about the company's impact on the lives of your customers, you won't even be tempted to focus on just a metric. You'll start using the metric as a push, as an incentive, as a reminder that your organization can get better. You'll start hiring people who as the head of the department put it retail sales Apple Ron Johnson, "think about the feelings of the client, not just about his pocket." Creating more promoters and reducing the number of detractors will require redirecting strategic investments and changing processes. This will be done not to increase profits (although it will increase), but because it is right. Will the company then begin to expand the use of NPS to evaluate the behavior and attitudes of other stakeholders? employees, major investors, suppliers and other business partners - and providing insight into how you can win their loyalty. Organizations affect the lives of many people, and you need to know what your company's impact is, wherever and however it affects them.
The ideas behind the NPS system are so simple and intuitive that top managers may decide that it will be just as easy to implement. Those companies that have adopted NPS have learned that it takes a lot of time and effort to create reliable and valid metrics to interpret data and create "closing the loop" processes that actually drive change. NPS affects all processes of an organization including finance, operations, marketing, product design, human resources and Information Technology. It permeates all levels of the organization: from the CEO, the board of directors, to the front-line employees. NPS challenges established ways of working, priorities, and decision-making processes. Although simple, it requires active support from top management. Without this support, companies are likely to lose their passion, experience confusion, reluctance to adopt new ways of working, and a host of other pitfalls. Support and perseverance from the company's management team is essential."

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Sincere loyalty. The key to winning customers for life Fred Reicheld, Rob Markey

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Title: Sincere loyalty. The key to winning customers for life
Author: Fred Reicheld, Rob Markey
Year: 2011
Genre: Management, recruitment, Marketing, PR, advertising, Foreign business literature

About the book Sincere Loyalty. The Key to Winning Customers for Life.” Fred Reicheld, Rob Markey

Business today is a completely revolutionary direction, which has changed so rapidly in just a few decades. Modern market sales, coupled with a rapidly changing economic situation, dictates completely new trends, without mastering which, any company will very quickly become uncompetitive and go bankrupt. Regrettably, yesterday such successful marketing and PR services are no longer effective on their own today. Required new approach to conduct a business that will allow the company to work for the future, to be ahead of the curve and remain profitable in any conditions.

This approach was also found by its authors, well-known specialists in their field, Fred Reicheld and Rob Markey. This revolutionary campaign is outlined in their new book Sincere Loyalty. The key to winning customers for life." On its pages, the authors will talk in detail about what customer loyalty is, what it is and how to achieve it. The book provides many examples and a detailed methodology for calculating and evaluating the customer loyalty score.

Looking ahead, Reicheld and Marki have caught a trend that can destroy companies that are not adapted to new competitive advantages, and, on the contrary, create a bright future for those who are already actively applying new approaches. The so-called "quiet revolution", due to the huge and diverse number of ways to exchange information, is now much more powerful in its impact than intrusive adware. As a result, and in order to avoid the negative impact of various reviews about the company, the authors propose to develop and improve here and now. Namely, to ask your customers one extremely important question: will they recommend it to their friends and acquaintances? Based on the answers to it, a company can divide its customers into those who love it, those who hate it, and those who are indifferent. The result will be a simple and understandable indicator - the net support index, which will show the extent to which the company has succeeded in building relationships with customers. This index can be tracked on a weekly basis, just as every company tracks its financial results. And on its basis in the literal sense of the word, build your future.

Having become acquainted with the new, unique information of the book "Sincere Loyalty", readers who are related to doing business, various business processes and are simply interested in new trends in survival in the market will be able not only to radically change the current situation of their company, but also to avoid old mistakes while creating a brand new business.

Read the new, unique book by Fred Reicheld and Rob Markey, Sincere Loyalty. The Key to Winning Customers for a Lifetime”, get useful information and put into practice brilliant ideas. Enjoy reading.

On our site about books lifeinbooks.net you can download for free without registration or read online book“Sincere loyalty. The Key to Winning Customers for Life” Fred Reicheld, Rob Markey in epub, fb2, txt, rtf, pdf formats for iPad, iPhone, Android and Kindle. The book will give you a lot of pleasant moments and a real pleasure to read. You can buy the full version from our partner. Also, here you will find the latest news from the literary world, learn the biography of your favorite authors. For beginner writers there is a separate section with useful tips and recommendations interesting articles, thanks to which you yourself can try your hand at literary skills.

Fred Reicheld, Rob Markey

Sincere loyalty. The key to winning customers for life

Fred Reichheld with Rob Markey

The Ultimate Question 2.0:

How Net Promoter Companies Thrive in a Customer-Driven World

Scientific translation editor Irina Chichmeli

Copyright © 2011 Fred Reichheld and Bain & Company, Inc.

© Translation into Russian, edition in Russian, design. LLC "Mann, Ivanov and Ferber", 2013

All rights reserved. No part of the electronic version of this book may be reproduced in any form or by any means, including by posting on the Internet or corporate networks, for private and public use without the written permission of the copyright owner.

Legal support of the publishing house is provided by the law firm "Vegas-Lex"

© The electronic version of the book was prepared by LitRes ()

This book is well complemented by:

Carl Sewell

Igor Mann

Andy Sernowitz

Foreword by the publication partner

Here is a book that can answer many questions about how and why to manage customer loyalty. You will find out why the correct growth of the company is possible only by increasing the loyalty of its customers, think about what kind of people are needed for this growth.

At the same time, this book will make you think about how to involve every employee in the process of creating promoters, how to make loyalty as a strategy a reality at all levels of the organization, how to reward leaders, and what to do with those who do not share the company's aspirations for loyalty leadership. And the more you dive into the world of loyalty, the more questions will arise.

For six years now, we at Life Financial Group have been on the path to creating an integrated loyalty management system, the elements of which are described in the book. And with each new step, we face new challenges that need to be answered. We have already found some of the answers: for example, NPS has become a key indicator for us, with which we compare all our branches and businesses. We chose the cost/income ratio as the second indicator for comparison, because loyalty that does not bring profit to the company in the long run leads to bankruptcy. At the same time, to emphasize the importance of customer loyalty, we have gone to extreme lengths: branches with below-average NPS in the group are eliminated from the competition, regardless of their cost-to-income ratio. Last year the team was the winner of our championship in in full force went to the carnival in Rio de Janeiro. Therefore, the motivation to win in all departments is very strong.

Another point that caught my attention in this book is the issue of employee loyalty. I fully share the author's opinion that it is impossible to succeed in creating promoters and achieving the correct growth of the company without the right employees - like-minded people who share the values ​​of the company and are ready to make every effort to achieve its goals. But there are not so many "right" people - according to our estimates, about 10% of the country's population. How to find them and attract them to work in the company?

For ourselves, we decided that the best way to do this is through assessment centers, which we already conduct in 113 cities of Russia. This is how we can already at the selection stage understand whether the candidate who came to us will really be an employee creating promoters. Or, despite excellent professional performance, he is likely to increase the number of detractors, thereby negatively affecting the long-term profit of the company.

I also agree with Mr. Reicheld that it is not about wait for instant wins by starting to build a customer loyalty management system. Of course, there will be “quick wins,” especially if you manage to involve employees who are in direct contact with customers in loyalty management. But you will get tangible results leading to improved financial performance only when a special culture based on customer-centric values ​​is created at all levels of the company, and a special organization management system that allows you to identify, implement and scale the best customer loyalty management practices. At our company, we call it an integrated operating system, and it allows us not only to track the results of NPS measurement in each department, but also to take real actions aimed at increasing customer and employee loyalty based on this data.

For us, as for the author of this book, “NPS is a business philosophy, a system operating methods and commitment of leaders, not just another way to measure customer satisfaction.”. I salute all those who adopt this philosophy as a strategic direction of development, and wish them patience and success on the difficult, but the only right path - the path of building a business based on loyalty.

Sergei Leontiev, President of Life Financial Group

To my wife Karen with love and devotion

Introduction

From Assessment to System

It always seemed to me that success in business and in life should depend on the impact on the people with whom fate brings you together - on whether you improve their lives or worsen them. Financial accounting, for all its importance, completely ignores this fundamental idea. So a few years ago, I created a way to measure how well an organization treats the people it influences—that is, how well it creates relationships worthy of loyalty. I call this the Net Promoter® (or NPS) index. Thousands of innovative companies including Apple, Allianz, American Express, Zappos, Intuit, Philips, GE, eBay, Rackspace, Facebook, LEGO, Southwest Airlines and JetBlue Airways have adopted NPS. Most of them first used it to track the loyalty, engagement, and enthusiasm of their customers. They liked that NPS was easy to understand. They also liked it because it helped everyone focus on the same goal of treating customers so that they would become loyal promoters, and leading to the actions needed to achieve that goal. They also liked the versatility of this tool, the ability to adapt it to the needs of a particular company. Over time, companies have refined and expanded this indicator. They began to use it to create employee engagement and loyalty. They discovered new ways to extend the impact of this indicator not only to the measurement of loyalty, but also to change in the organization. Companies shared ideas with each other and refined the mechanisms for applying NPS, taking into account the characteristics of their work, based on each other's experience. In the face of an extraordinary creative intellectual explosion, NPS quickly transformed into something more than just a metric. Despite the fact that this branch of knowledge is still young, it has become a management system, a way of doing business. And the abbreviation NPS itself began to mean system(from the English system), and not just an index (from the English score).

Now let's see what results this system has brought. Here's what company leaders say about it:

NPS stimulated our thinking and allowed the organization to focus on the customer. In the 1970s and 1980s, TQM revolutionized the cost of quality assurance in manufacturing. NPS is of comparable importance nowadays.

Gerard Kleisterli, CEO of Philips

The NPS system was perfect for Apple. It is firmly rooted in the DNA of our retail stores.

Ron Johnson, Senior Vice President and Founder of Apple Retail

NPS has completely changed our world. It has become an integral part of our workflow and culture. Now this system can no longer be removed from them, even if such an attempt is made.

Junien Labrousse, Executive Vice President and Chief Product and Technology Strategist, Logitech

NPS is a litmus test that allows us to understand how our lives correspond to our core values. This is the first app I look at when I boot up my computer every morning.

Walt Bettinger, CEO of Charles Schwab

NPS is the most powerful tool we have ever implemented. And the reason is that it encourages action.

Dan Henson, former director of marketing at General Electric

We use NPS every day to make sure we exceed the expectations of our customers and employees.

Tony Shay, CEO Zappos, author of Delivering Happiness

You will find more than a dozen stories about how companies like the ones listed above have implemented the Net Promoter system in their operations and what results they have achieved. NPS was a key element in Charles Schwab's economic recovery, during which the company's share price tripled. It has become the centerpiece of Apple's famous retail stores, where sales per square meter are considered the highest in the world. The system has enabled Ascension Health to better care for its patients, Progressive Insurance to gain market share and increase the number of insurers, American Express to better serve customers while reducing costs, and so on. The Net Promoter system has proven to be a powerful growth driver and prosperity.

However, I would not like to dwell on the word system, since there is one more word for the letter S, which has infiltrated the companies that have achieved the most impressive results with Net Promoter. These companies embody spirit leadership Net Promoter, a special philosophy that energizes the system. Leaders who capture this spirit believe that the mission of any great organization is to improve the lives of all with whom it comes in contact, to build relationships worthy of loyalty. A great organization must, of course, have a positive impact on its shareholders, but it must also have an impact on its employees, business partners, and especially customers. If it does not win the loyalty of all these key individuals, its shareholders will not receive dividends. Moreover, company leaders recognize that their reputation and wealth will be determined by how well they fulfill this mission.

Words like reputation, spirit Net Promoter and life improvement may give you the idea that NPS is something vague. Instead, NPS is the junction of mission and math. A mission without an accurate measure of success or failure is just a shake of the air. Only by systematically measuring its impact on people and relationships can an organization assess whether it is truly achieving its mission and improving lives. That's the reason the NPS system exists. It provides a practical measurement tool with which to accurately assess a company's progress.

This book tells the story of NPS: how it originated, how it evolved, and what it aims to achieve. It shows you how you can use the system to improve your business—and your life.

NPS evolution

When we first published this book, we really wanted to put the words “net support index” in the title. However, this would be a bad move: hardly anyone had heard of NPS before. While the idea was at the initial stage of development, on the way of transition from theory to practice. The theory was backed up by a number of compelling studies and gave rise to promising experiments by early adopters of the theory, such as Intuit and General Electric. But it was just a theory, nothing more. Special attention it focused on those companies that we found had a higher NPS than their competitors. (We have learned how to measure industry NPS using what we now call the top-down market comparison method, which yields overall score the company's relationship with customers, rather than ranking individual transactions). However, exemplary firms have not used the concept and tools of the Net Promoter system to succeed, for the simple reason that they did not yet exist in 2006 - the NPS index had just been invented.

By the time this edition was published, the situation had changed significantly. Thousands of organizations are already using NPS. Many have achieved outstanding results. Companies such as Apple, Intuit, Philips, Rackspace, and others mentioned above have placed NPS at the center of their management processes by creating systems that support this theory. For example, they can calculate how much it will cost to transform passive client to the promoter. In addition, the metrics, tools and processes that now form the basis of Net Promoter's standard management system have been developed. This system helped them discover more effective methods hiring, training and remuneration of staff. As a result, companies have revised their policies, redesigned products, and improved business processes. In short, they discovered that the Net Promoter system could change them, and realized that, despite the simplicity of the concept, the path to creating an army of promoters is both more thorny and more effective than they expected.

My colleagues and I have had the privilege of working with many of these companies as they made their journey through the NPS journey. Forums, conferences, websites and online communities were created to speed up learning and stimulate exchange best practices. At the center of this growing business movement was the NPS Loyalty Forum, a voluntary organization sponsored by the international consulting firm Bain & Company, which has been my professional home for the past thirty-two years. Forum member companies meet several times a year, usually at the head office of one of the participants (for a partial list of participants, see ). These meetings allow the group to interact with a variety of members of the host company's team, from the CEO and CFO to COOs and customer service professionals. This "cross-pollination" is especially valuable because NPS has a significant impact on all functions and levels of the organization.

We were also supported by Satmetrix, another of our early partners in the development of the NPS scorecard and tools, which helped us organize conferences. These conferences are held twice a year in the US and in Europe. In the early years, more than 3,200 managers visited them. In addition, we have developed a three-day certificate course that, as of this writing, has been rolled out worldwide to more than a thousand executives. This course is now available online.

Participating in forums, conferences, and tutorials has helped me understand the evolution of NPS from assessment to system, and much more. In fact, one of the main lessons that practitioners learned was that the power of NPS extends far beyond the topic outlined by the main question. The indicator gives starting point, but it is the system that helps leaders create a corporate culture that inspires employees to become more customer-focused.

The main question, as previously mentioned, was: how likely is it that you will recommend? .. This formulation was an abbreviated version of more general question: did we treat you well? is it good enough to earn your loyalty? The abbreviated form worked well for most companies, that is, it produced an indicator that correlated reliably with consumer behavior, although some companies found that a slightly modified formulation gave better results. However, the focus should not be on the question itself. After all, no company can expect to increase profitability just by doing research, no matter how it is done.

So the question led to the development of a control system with three basic components. One of them is categorization of clients into promoters, passives and detractors based on a simple question. The second component is creating an easy-to-understand index based on categorization. These elements form the net support index. And then comes the third main component - expression in these terms of progress and success, motivating all employees of the organization to take actions that are aimed at increasing the number of promoters and reducing the number of detractors among its clients. In other words, the third component is the systematic and purposeful study of how to use the assessments obtained as a result of feedback with clients. This is how a company can improve its results and pave the way to greatness. This is what turns NPS from an index into a system.

The following is a partial list of companies that have participated in at least one NPS Loyalty Forum meeting.

Members of the NPS Loyalty Forum

What will you find in this book

The first part of the book describes the main idea and begins with a description of the depressingly widespread unfriendly customer service and the bad profits it generates. Here the origin of NPS is presented and the results of our research are described in detail; it also explains and quantifies the logical relationship between NPS and company growth. This connection becomes more and more significant and immediate as it spreads. network tools communications. In real-time mode, clients get access to information about the methods and results of the company's work, and thus sit even more tightly in the chair of its leader. Part I also looks at ways to measure customer relationships. It tells the compelling story of Enterprise Rent-A-Car, the creator of the system that I based the NPS model on, and outlines the rules for measuring the ephemeral metric of customer experience in a timely, accurate, and reliable manner.

Part II focuses on how leading companies achieve outstanding results with the NPS system. It considers innovate experience leading companies and summarize the lessons learned from them. Particular attention is paid to the fundamental changes that the leading companies had to make to stimulate a cultural shift and create an army of promoters. Just as a movie trailer highlights its highlights, I'm previewing some of those lessons.

NPS is a flexible, adaptable, open system. There is as little orthodoxy in it as it is possible for a system to be. Most companies have found that the 0 to 10 scale works great, but it's not the only one possible. (Enterprise uses a scale of 0 to 5.) Most companies start the question with "how likely," exactly as it appears in our book. But some have found a more suitable formulation for themselves. Many gave the system its own name. Schwab has a "customer support index"; Thermo Fisher Scientific - "customer loyalty indicator"; Chick-fil-A uses the name "percentage of enthusiastic fans".

However, three fundamental components cannot be dispensed with. Despite the flexibility, the NPS system will not work without them.

1. Companies should systematically identify promoters and detractors among their customers.. Categories and related feedback need to be intuitive not only to analysts but also to front-line employees, and this information needs to be systematically processed and communicated throughout the organization so that employees can track their results and understand how to manage them. Otherwise, what is the meaning of the indicator?

2. Companies need to create a learning process for “closing the loop” and improve it and build it into their daily work. NPS will not produce results until companies act on what they have learned, that is, until the loop between knowledge and action is “closed”. Processes within such a “closed loop” should not be just an addition to the main work, but an integral part of the daily management of the company.

3. The CEO and other top managers should consider increasing the number of promoters and reducing the number of detractors as mission critical. You can't just hand over control of NPS to market research. Winning the loyalty of customers and employees is either at the center of the company's philosophy and strategic priorities, or not; in the second case, improving the process of obtaining feedback from customers will not play a big role.

In short, NPS doesn't come easy, which brings us to perhaps the most important lesson:

Ultimately, NPS is a business philosophy, a system of operating practices, and leadership commitment, not just another measure of customer satisfaction.

Some explanation is needed. To begin with, ask yourself why should a company even care what customers and other stakeholders it influences think of it? A lot of people really don't care; and most of them manage to avoid bankruptcy. (See examples of poor profits in .) In my opinion, NPS can make a business more successful. In addition, I think it is right to take care of customers: this is how we will create a better company, a better society, a better life.

Think for a moment about the Golden Rule - according to this principle, you need to treat others the way you want to be treated yourself. In other words, with such an attitude, both parties retain a sense of their own dignity and show respect for each other. Anyway, " Golden Rule”is the basis of most of the world's religions. However, it is not alien to business. Companies such as Southwest Airlines, Four Seasons, and Chick-fil-A have built the golden rule at the core of their missions. If people begin to live according to this rule, they will not without reason be able to believe that they are living a worthy life and positively influence the lives of those with whom they come into contact. “How likely?..” is a practical shorthand for asking if you are following the golden rule. He returns from heaven to earth, to business. In the end, the purpose of research is not to start a philosophical discussion or start a relationship for life, but to create working categories and a metric that stimulates action. This is a way to improve business relationships.

However, it is important to analyze the underlying philosophy of the system as it reflects the values ​​that guide the organization. If you truly care about the company's impact on the lives of your customers, you won't even be tempted to focus on just a metric. You will begin to use it as an incentive, as a reminder that your organization can be better. You'll start hiring people who, as Apple's head of retail Ron Johnson puts it, "think about the customer's feelings, not just their pocket." Creating more promoters and reducing the number of detractors will require redirecting strategic investments and changing processes. This will be done not to increase profits (although it will increase), but because it is right. The company will then begin to expand the use of the NPS to evaluate the behavior and attitudes of other stakeholders—employees, major investors, suppliers, and other business partners—and provide insight into how to win their loyalty. Organizations affect the lives of many people, and you need to know what your company's impact is, wherever and however it affects them.

Leaving the company, every business leader leaves a "legacy". And it is by him that he will be judged. If you want to leave a legacy that is valued more than profit—the ability to care for customers and employees, the company you created or helped create, the improvement of the lives of the people you worked with—then NPS is an invaluable tool for that.

How to apply NPS correctly

The ideas behind the NPS system are so simple and intuitive that top managers may decide that it will be just as easy to implement. Companies that have adopted NPS have learned that it takes a lot of time and effort to create reliable and valid metrics to interpret data and create “closing the loop” processes that drive change. NPS affects all processes in an organization, including finance, operations, marketing, product design, human resources, and information technology. It permeates all levels of the organization: CEO, board of directors, front-line employees. NPS challenges established ways of working, priorities, and decision-making processes. Although simple, it requires active support from top management. Without this support, companies are likely to lose their passion, experience confusion, reluctance to adopt new ways of working, and a host of other pitfalls. Support and perseverance from the company's management is extremely important.

You may find that even the beginning of a discussion about the idea of ​​​​implementing NPS can hit a wall of resistance from critics, who have been nicknamed Net Pro-Moaners by practitioners - pure whiners (a term will be discussed in). And no wonder, since we already have a well-established industry focused on measuring customer and employee satisfaction through extensive and mostly ineffective research, and a new metric like NPS threatens economic model on which most research companies depend. The closed "black box models" used by these firms are built in such a way that their algorithms remain closely guarded secrets. If these algorithms were not classified, no one would pay companies to use their models and turn to them for advice on how to improve performance.

With NPS it's the other way around. Any company can implement this process for free, but the transparency makes it easy to understand and improve. Not surprisingly, traditional market researchers were quick to write articles claiming that NPS didn't work. Similarly, the Encyclopedia Britannica does not have much respect for Wikipedia, and the producers of licensed software won't say good things about open source software. Here st about Let's recall Upton Sinclair's famous aphorism: "It's hard to get a man to understand something if he is paid a salary for not understanding."

By shaking the foundations of routine, resistance can be expected. So what? Along this path, about it pass. The knowledge you can gain by implementing the Net Promoter system is truly priceless. They will help you manage your company better, get more job satisfaction, and build relationships to live a fuller life.

Before I conclude this introduction, I would like to take this opportunity to introduce my colleague, Rob Markey, who helped me write this book. Rob and I worked at Bain for twenty years. He was my reader and advisor in the preparation of the first edition, and also played such an important role in the preparation of new material for this edition that he deserves the right to be called a co-author. Rob runs the NPS Loyalty Forum and is also the head of international practice in Bain Customer Strategy and Marketing. His experience with clients on NPS-related issues is unique, and the book has greatly benefited from his involvement.

More books about the Net Promoter system are planned for the future, but this book lays the groundwork. It will help you understand what this movement means, how it came about, and what it hopes to achieve. It will give you the opportunity to learn about the great success stories of companies using the system and continuing to learn from it. Perhaps someday we will write about your company. I hope so.

Fred Reicheld

Net Promoter Basics

1. Bad profits, good profits and main question

Majority modern companies tries to focus more on customers - to become customer-centric. And this is not surprising, because we live in the world of the Internet, where almost any information is available to customers. In such a world, only companies that put the customer at the center of their business can compete successfully.

Many companies also want to be more customer-focused. mission than on profit. Their management understands that they can't win and keep customers if they don't first win and keep the best employees. And the most talented employees choose to pursue a mission—a goal that goes beyond delivering value to shareholders.

Despite all the efforts that companies put into this dual challenge of focusing on customers and inspiring employees, the vast majority of them have not been very successful. The corporate culture of these companies remains stubbornly profit-focused, driven by financial budgets and accounting metrics. Managers must deliver on plans, business leaders must meet sales and profit targets, and CFOs must submit quarterly earnings reports. Leaders know"catechism" of customer-centricity, and most can recite it by heart. To the question: " Why do we need loyal customers?"- answer:" Because loyal customers come back more often, buy additional products and services, recommend us to friends, provide useful feedback; they are cheaper to maintain and less price sensitive". Yet these leaders monitor, discuss, and guide themselves every day. financial performance.

This is where the gap occurs. There is no word in our financial and management accounting systems about feelings of loyalty, enthusiasm, repeat purchases, recommendations and other emotions and actions that determine the economic results of an individual client. Managers and employees know how to achieve immediate financial results and know that they will be held accountable for it. And customer loyalty and the mission of the company seem to be something obscure, indefinite, practically not amenable to quantitative measurement. In the hustle and bustle of daily decisions and priorities, budget constraints, sales quotas and accounting the gravitational force of short-term profit pulls us down. Thus, companies, despite the best intentions, are drawn into the maelstrom. They begin to make decisions that separate customers and employees; spend too much time focusing on the wrong things; succumb to a temptation that has only one name - bad profits. Let's look at a few examples.

The alternative is good profits

However, companies do not necessarily choose this path. Some of them grow because they have learned to distinguish bad profits from good ones, and direct their efforts to making good ones.

Good profits are fundamentally different from bad ones. Bad profits come from customers, while good profits come from active collaboration with customers. The company earns good profits because it pleases its customers and they return with pleasure, moreover, they recommend it to friends and colleagues. In fact, satisfied customers become part of the company's marketing department, as they not only increase their own purchases, but also give good recommendations. They become promoters. To overcome dependency on bad profits, a company needs to build relationships that grow promoters, generate good profits, and strive for growth.

The Vanguard Mutual Fund Group is a compelling example of the difference between good and bad returns. Not so long ago, the Vanguard Group by a third lowered prices for clients who have recently made large investments or maintained a positive balance for a long period. Management recognized that customers who maintain large balances and trust with the company can and should share in the returns generated from economies of scale. The company had the opportunity to reallocate value in favor of its best customers, increasing the price gap compared to competitors' offerings. It would be more profitable for her to continue charging customers the same fees that new customers and customers with a small account balance pay. However, Vanguard found this to be unprofitable from a business standpoint. Why not share the profits from economies of scale with the customers who create them? The move so delighted the company's key clients that they deposited additional funds and actively recommended it to their peers, propelling Vanguard's explosive growth and positioning it as a leader in the mutual fund industry.

Vanguard is not the only example. There are others.

It would not be difficult for Amazon.com to afford to invest more in advertising than it does now, but the company is investing in free shipping, low prices and service improvement. Its founder and CEO, Jeff Bezos, said: “If you create something wonderful, customers will definitely tell each other about it.”

The online clothing and footwear store Zappos.com has followed the same path. Avoiding investing in sales and marketing, Zappos has focused its resources on customer experience. CEO Tony Shay's strategy was to generate growth through repeat purchases and consumer referrals, which helped reach one billion dollars in sales in just ten years. (Amazon was so shocked by the success of Zappos that it acquired it in 2009 for $1.2 billion.)

Southwest Airlines does not charge any flight change or baggage fees. The carrier also changed the pricing structure from complex segmentation accepted by the industry, transparent pricing policy. Today, Southwest carries more passengers on domestic flights than any other US company and boasts the highest total market value of the business in the industry.

Costco is a leader in customer loyalty among retail warehouse stores. In the Fortune 50 rankings, the company soared from the bottom position in less than 20 years, spending almost nothing on advertising and marketing. Her customers are so loyal that she achieves growth solely through good reviews.

Among internet companies, eBay's impressive post-launch growth contrasts starkly with AOL's stalled growth. The eBay site says:

eBay is a community that encourages open and honest communication among all members. Guiding our community is based on five core values:

1. We believe that people are inherently good.

2. We believe that everyone can contribute.

3. We believe that honest and open communication can bring out the best in people.

4. We recognize and respect everyone as a unique individual.

5. We want you to treat people the way you want them to treat you.

eBay clearly follows these principles. We believe that members of our community should honor them too, whether by buying, selling or chatting with friends on eBay.

Of course, anyone can lay out grandiloquent principles on a website or in a hiring brochure. However, eBay has found a way to bring these principles into its daily priorities and decisions. As a result, by 2010, eBay had converted over 70% of its customers into promoters. (In the online shopping sector that year, only Amazon’s promoter percentage was higher at 76%, although by 2011 Zappos had grown enough to be included in the loyalty survey and its NPS equaled the eBay index.)

Most of the new customers came to eBay through referrals, giving the business many economic benefits. The company has found that referral customers are cheaper to serve because they have already learned from the promoter how the site works, and they usually have friends to help them solve problems instead of eBay employees.

In addition, eBay has learned to harness the creativity not only of its own employees, but of the entire community. The company encourages members of the community to identify areas of their work that do not comply with its principles, as well as to find new opportunities to improve service. Community members are invited to rate sellers after every transaction, and those ratings are visible to everyone. The process allows each participant to build a reputation based not on public relations or advertising, but on the combined experience of the community members with whom they have done business. The eBay virtual world is like a small town: success here is based on a good name.

Conventional wisdom tells companies to strengthen their market position and then get the most out of customer service. However, eBay is doing the opposite. Despite its dominant position in the online auction market, the company tries to take into account the needs of community members and the long-term interests of shareholders when making decisions. Community-based governance allows eBay to look beyond next quarter's stock price and constantly look for ways to improve the lives of community members. For example, a company has developed a group health insurance plan for its most active, typically small sellers who do not have the opportunity to take advantage of economies of scale through corporate insurance plans. While eBay is coordinating the program, the company does not include a profit margin in it. eBay's acquisition of PayPal is not only a forward-thinking business move, it has built strong communities of sellers and buyers with additional fraud protection built into the system. eBay's robust value platform has made it a secure home for PayPal, another example of a loyal customer base that has allowed the company to move into an adjacent business, strengthening its core business and fueling significant growth for PayPal itself.

Such moves show a mindset that is radically different from that of companies focused on bad profits. The airlines that dominate certain routes have repeatedly used their bargaining power to drive up prices, sometimes to such a high level that such behavior could only be called a rip-off. AOL scared off its customers not only with service disruptions and pop-up ads, but also by continuing to charge by the minute and not wanting to switch to flat-rate plans. eBay could substantially increase profits by boosting ad revenue, but management understands that a high volume of costly advertising will make the site less valuable to members of the community and possibly put small merchants at a disadvantage compared to big market players.

This way of thinking demonstrates a deep respect for the power of verbal advice in modern economy. Just as detractors have a mouthpiece for negative recommendations, promoters use it for positive feedback. Promoters bring in new people. By speaking well of the company, they add shine to its reputation, increase the number of sellers in the company at no cost. They enable the company to earn real profits and thus ensure profitable and sustainable growth.

At the heart of this approach to customers is the idea: treat people the way you want to be treated. It is surprising that many leaders express it in this way. in simple terms. eBay founder Pierre Omidyar says, "My mom always taught me to treat other people the way I would like them to treat me - and I respect people." Other leaders also use the golden rule:

The application of the Golden Rule is integrated into everything we do.

Colin Barrett, former CEO of Southwest Airlines

All of our success revolves around the Golden Rule.

Isadore Sharp, founder and chairman of the Four Seasons hotel chain

The only way to grow is to treat clients in such a way that they come back to us again and tell their friends about us. If we were customers, we ourselves would like to be treated that way. The Golden Rule is the basis of loyalty, and loyalty is the key to profitable growth.

Andy Taylor, CEO Enterprise

A truly customer-focused company is a golden rule company. Employees treat customers the way they would like to be treated if they were customers. Consequently, they completely abandoned bad profits.

How to distinguish good profit from bad?

“Loyalty is the key to profitable growth,” says Enterprise's Andy Taylor. Logically. However, this statement raises as many questions as it answers. Most companies can't even articulate what loyalty is, let alone measure and manage it. Why do customers stay with the company? Because of loyalty or because of ignorance and laziness? Are they bound by long-term contracts that they would gladly terminate? Be that as it may, do managers really know how many customers love the company and how many hate it? And how in practice to distinguish good profits from bad ones?

After all, without a systemic feedback mechanism, the golden rule remains overly simplistic and cannot serve as a reliable basis for decision making. I may think that I treat you the way I would like to be treated, but you may completely disagree with me. When it comes to companies, satisfaction surveys often mislead top managers that their performance is rated, for example, an A level, while customers give a C or even an E. Business leaders need a clear, meaningful indicator, an honest rating system. which clearly shows how well things are going in fact.

Finding that metric—the missing link between the golden rule, loyalty, and sustainability—has proven to be a long and difficult task.

At Bain & Company, almost thirty years ago, we began by analyzing the relationship between loyalty and growth. First, data was collected showing that a 5% increase in customer retention results in a 25% to 100% increase in profits. We later showed that the companies with the highest customer loyalty (we called them loyalty leaders) are growing revenues twice as fast as their competitors.

Of course, not everyone wanted to study the mysterious loyalty effect, which explains how building relationships worthy of loyalty is associated with high profits and growth. The "commanders in chief" of corporations like Enron and WorldCom simply couldn't care less about their customers than they did. Some Wall Street companies last years seemed to be neglecting clients in favor of greater profits from their own trading operations. However, in general, most top managers became interested in this concept. After all, it's not hard to see that a company can't grow if it escorts customers out the back door faster than salespeople can get them through the front door.

However, there is a mystery here. Study after study shows that customer loyalty really is a top priority for most CEOs of companies, and despite this, lower-level managers in organizations continue to treat customers in a way that they do not often want to return. If CEOs of companies really have as much power as they think, why can't they make their employees take care of their customers?

The reason is as we discussed earlier in this chapter: employees are responsible for growing profits. Companies measure financial results. Financial results determine the success of managers in assessing their effectiveness. Unfortunately, accounting procedures do not allow you to distinguish between good and bad profits. Did you generate $10 million in additional revenue from hidden fees or new purchases from loyal customers? Did you get $5 million in savings by degrading customer service or by lowering your churn rate? Who knows the answers to these questions? And if no one knows, who cares? You can't blame department or branch managers for paying attention to the metrics by which their work is judged.

Regardless of what the top manager personally thinks, companies that evaluate success primarily through the prism of financial accounting tend to believe that loyalty does not pay off, that good relationships are not essential, and the approach to dealing with customers should be built on the basis of profitability, rather than correct and fair treatment of customers. By evaluating success in financial terms alone, managers focus on profits, whether those profits are rewards for building good relationships or are related to their abuse. Ironically, customer loyalty provides companies with a powerful financial advantage—an army of trusted sales, marketing, and public relations professionals who require no salary or commission. However, the importance of such promoters is ignored because it is not recognized in the income statement or balance sheet.

One day at a European loyalty conference, a colleague of mine at Bain made a very important observation. Watching senior executives leave the audience after the presentation, enriched with knowledge about loyalty, he shook his head and said: “A sad picture. They now realize that their companies cannot thrive without increasing customer loyalty. However, when they return to the office, they find that there is no one in their company who could be entrusted with this matter. There is no system to help them measure loyalty in a way that makes individuals accountable for the outcome.”

Exactly! A responsibility is one of the magic words of business. Any experienced leader will tell you that things get done only when specific people are in charge. Another magic word measure. Because what can be measured creates a responsibility. In the absence of a standard, reliable measure of customer relationships, employees cannot be made accountable for them, which is why their importance is underestimated. Conversely, clear, accurate daily measurements of profit and its components show that the same employees (at least those who do not want to lose their jobs) are personally responsible for costs or revenues. Therefore, the pursuit of profits dominates the agenda of both companies and individual employees, while the responsibility for treating customers correctly, improving their lives, building good relationships remains in the background.

A few years ago, we thought we had solved the measurement problem. We have helped companies develop a range of key indicators, such as retention rate, share of repeat purchases, and "company share of buyer's wallet". But then we had to face reality. Most organizations have found it difficult to collect accurate and up-to-date data to measure these loyalty metrics. These companies have been unable to reprioritize and instill responsibility for building good customer relationships. Despite steady progress in the science of measuring profits since the invention of double-entry accounting in the 15th century, relationship quality measures have remained stuck in the Middle Ages. Companies lacked a practical and reliable system to measure the percentage of improving and deteriorating customer relationships and to engage the right people in the implementation of appropriate actions based on this data. Therefore, we returned to our developments. We needed an error-proof test, a practical indicator of loyalty levels that could tell the difference between good and bad profits. It was necessary to find an indicator that would allow for personal responsibility. We knew that momentary attitudes expressed in satisfaction surveys cannot determine loyalty; only the real behavior of customers measures their loyalty and stimulates economic growth. Therefore, we decided that the building blocks of the system should be behavior. We needed to find a metric based on customer behavior.

After numerous studies and experiments, some of which you will read about in the following chapters, we have found such an indicator. We've found a single question you can ask your customers that usually characterizes their behavior so precisely that it's possible to reliably predict their actions. By asking this question thoughtfully and systematically, and by linking results to employee compensation, you can tell the difference between good and bad returns. You'll be able to manage customer loyalty and the growth it generates with almost the same precision you now manage profits.

Customers' answers to this question provide a simple and honest meter. This easily obtained indicator makes employees responsible for the right attitude towards customers. A single number will allow you to determine how much progress you have made on the path to becoming customer-centric. We called this question main issue because it helps you understand if you have succeeded in achieving your mission to improve the lives of those you encounter. However, on reflection, we were forced to call this question partly the main one, because it should always be followed by an additional question - why?

2. Measure of success

Scott Cook was worried. His financial software company Intuit was on a slippery slope, and he didn't know what to do.

It is safe to say that to an outside observer, his problems could seem far-fetched. Since its founding in 1983, Intuit has grown by leaps and bounds. Its three main products—Quicken, QuickBooks, and TurboTax—dominated the market. The company went public in 1993 and was making significant profits by the end of the decade. The business press hailed Intuit as a customer service icon. Cook himself—a very polite, bespectacled, Harvard MBA graduate who worked at Procter & Gamble before co-founding the company—had an instinctive sense of the importance of turning his clients into promoters.

“We have hundreds of thousands of sales people,” he told Inc. magazine. in 1991. “These are our clients.

What is the mission of Intuit?

– Make sure that the client likes the product, and he would persuade five friends to buy it.

And now what? Did his words really come true? Cook wasn't sure. While the company was in its infancy and working out of a cozy office in Silicon Valley, he personally knew all the employees and was able to explain to them the importance of making products and providing services that consumers would truly love. They could all hear him personally answering the customer service phone. They could watch him personally participate in his company's famous Follow me home program, in which employees asked customers to watch them install software to see if there were problems. . The company now has thousands of employees. Like many fast-growing businesses, it has hired many professional managers who have been trained to lead by numbers.

What are these indicators? For growth there were two necessary conditions as Cook liked to put it: profitable clients and happy clients. Everyone knew how profits were measured, but the only measure of customer happiness was obscure “satisfaction” statistics gleaned from surveys that no one trusted and for which no one was held accountable.

Naturally, managers focused on profits, and the consequences of this could be predicted. Managers who cut call center headcount to cut costs were not responsible for increased wait times or resulting customer dissatisfaction. The call center employee who pissed off the customer so much they switched to someone else software for tax purposes, could still get a quarterly bonus because it had high call-per-hour rates. The overall level of her performance was easily measurable, but the overall level of customer satisfaction could not be calculated. The marketing manager, at the suggestion of which new fashionable features were introduced into the programs to attract customers, was rewarded for the growth in revenue and profits; actually additional options created confusion that repelled new users. Cook increasingly heard complaints. Some indicators of market share began to decline. Due to the lack of a system of accurate measurements and, as a result, responsibility, the company gradually lost what led it to success - a good relationship with customers.

Determining the right question

All this number-crunching was done with one goal in mind—to determine which research questions showed the strongest statistical association with repeat purchases or referrals. For each industry, we hoped to find at least one question that effectively predicted customer behavior to predict company growth. We were betting on what that question might be. We ourselves—perhaps reflecting years of loyalty research—really liked the option: how much do you agree that Company X deserves your loyalty?

However, the results were different, and they came as a surprise to all of us. It turned out that the same question - the main question - worked for majority industries. And the question was: How likely are you to recommend company X to a friend or colleague? In eleven out of fourteen cases, this question was ranked first or second. In two or three more, it was very close to the winning question, so the first or second place in the ranking could be divided between them.

After considering the results, we came to the conclusion that they are completely logical. After all, loyalty is a powerful, value-based idea, usually related to family, friends, and country. People can to be loyal to the company where they shop, but do not describe their feelings with this word. However, if they really enjoy working with a particular supplier of goods or services, what comes most naturally to them? Of course, recommend this company to those who are not indifferent to them.

We also realized that in order for clients to make a personal recommendation, two conditions must be met. First, people need to know that the company offers exceptional value in terms that an economist can understand: price, features, quality, functionality, ease of use, and other such factors. Second, they must also experience pleasant emotions in their relations with the company, to believe that the company knows, understands and appreciates them, listens to them and shares their principles. In the first case, the company wins the mind of the client. The second is the heart. Only when both sides of the equation are equal will a customer enthusiastically recommend a company to a friend. The client wants to be sure that his friend will get something of real value and, in addition, that the company will treat him well. This is why the question “How likely is it that you would recommend…?” is such an effective measure of the quality of a relationship. He analyzes both rational and emotional components.

However, we do not want to overestimate the result obtained. Despite the fact that the question “How likely is it that you would recommend? ..” is undoubtedly the best predictor of consumer behavior in different industries(and not only in terms of recommendations, but also in terms of repeat purchases and increase in the amount spent, as well as the desire to provide feedback), it is not the best for absolutely all industries. In certain circumstances, when working with corporate clients, for example, the questions: “How likely is it that you will continue to purchase products or services of company X?” or “How likely is it that you would recommend that we work more actively with company X?” - give the best results. Therefore, companies need to do their homework - to test the empirical relationship between the answers of the questionnaire and the subsequent behavior of customers towards the company. When this connection is established, as we will see in , there is a compelling effect: it provides a tool for measuring performance, determining responsibility, and justifying investments. It shows the relationship between customer centricity and profitable growth.

Evaluate answers

Of course, finding the right question is only the beginning. Now we had to find the right way to score responses.

The rating of the answers should be as simple and unambiguous as the question itself, and the scale should be meaningful to the clients answering the question. The categorization of responses should be made understandable to managers and staff responsible for results. Proper categorization will make it possible to effectively divide customers into groups that deserve different attention and different reactions of the company depending on their behavior, value for the company and needs. Ideally, the scale and categorization should be so easy to understand that even the uninitiated - investors, regulators, journalists - can understand the main ideas without an application manual and studying a statistics course.

For these reasons, we settled on a simple scale of 0 to 10, with 10 being “very likely to recommend” and 0 being “not likely.” When displaying customer behavior on this scale, we found (and continue to find in further work with customers) three clusters corresponding to different behavior patterns.

1. One segment included customers who gave the company a score of 9 or 10. We called them promoters because they act like promoters. They have the highest repeat purchase rating, accounting for 80% of all recommendations.

2. The second segment - passively satisfied, or passive, who rated the company a 7 or 8. This group's repeat purchases and recommendations were much lower than those of the promoters, often by 50% or more. Motivated by inertia rather than loyalty or enthusiasm, these customers usually stay with the company until someone offers them a better deal.

3. Finally, we named the group that scored from 0 to 6 detractors. It accounts for more than 80% of negative reviews. Some of these clients may be profitable in terms of accounting, but their criticism and attitude damage the company's reputation, scare away new customers and demotivate employees. They draw the life force out of the firm.

Dividing clients into these three categories—promoters, passives, and detractors—provides a simple and straightforward schema that accurately predicts client behavior. It is important that we get a scheme that stimulates action. It is much easier for account managers to understand the idea of ​​increasing the number of promoters and decreasing the number of detractors than the idea of ​​increasing the customer satisfaction index by one standard deviation. The ultimate test of any customer relationship metric is whether it helps the organization operate in a customer-centric manner, thus setting the engine of growth to work at full capacity. Does it help employees understand and simplify the job of creating delight in customers? Does it allow employees to compare their performance from week to week? Dividing customers into categories makes it all possible.

It turns out that what we call the Net Support Index, or NPS, the percentage of promoters minus the percentage of detractors, provides the most easily understood and effective summary of a company's performance.

It was not easy for us to arrive at such a language and such an accurate indicator. For example, we considered labeling a group that rated a company a 9 or 10 as “happy,” in keeping with the desire of most companies to please their customers. However, the goal of a business is not just to make customers happy, but to turn them into promoters, that is, into customers who buy more and actively recommend the company to friends and colleagues. This behavior helps the business grow. We also struggled with the idea of ​​oversimplification, that is, the desire to measure only the percentage of promoter clients. But as you'll see later, a company that wants to grow needs to increase the percentage of promoters and decrease the percentage of detractors.

These two distinct processes are best managed separately. Companies serving different customers, along with focusing on key customers - retail stores, banks, airlines, etc. - you need to reduce the number of detractors among non-key customers, since negative feedback from them is just as damaging as from any other. However, investing in trying to keep non-key customers happy may bring too little economic return. The net support index provides the necessary information to fine-tune client policy accordingly.

Of course, NPS cannot be determined for individual clients; they can only be promoters, passives, or detractors. But companies are able to calculate a net support index for specific customer segments, departments or geographies, as well as for individual branches or stores. NPS is to customer relationships what net income is to financial performance: it guides and stimulates learning and accountability. We do not want to say that this or any other final indicator is the only one necessary for business management. Just as the analysis of the most famous bottom line, net income, requires revenue and cost data, detailed data on promoters, passives, and detractors are also needed to get to the bottom of the net support index. At the same time, when tracking a single indicator of loyalty, the net support index, there is clarity and focus, which simplifies communications and draws the attention of the company to issues that require deeper analysis.

How Intuit solved its problems

Concerned about deteriorating customer relationships, Intuit seized on the idea of ​​measuring NPS and began implementing the program in the spring of 2003. (“Just one number and so much meaning!” exclaimed Scott Cook, introduced to our idea). The company's experience shows some of the issues involved in measuring promoters and detractors, and how such measurement can change a company's day-to-day priorities.

First, Intuit tried to determine the current ratio of promoters, passives, and detractors in each line of business. Cook suggested focusing the first telephone survey on just two questions. The team formulated them as follows: "What is the probability that you would recommend a product (for example, TurboTax) to a friend or colleague?", and the second: "Name the most important reason for your decision."

Customer responses revealed that the initial net support index for different lines of business ranged from 27% to 52%. Not a bad result, given that the NPS of the average American company is between 10 and 20%. However, Intuit never wanted to be among the average.

In subsequent years, the company's management came to understand that it is most appropriate to compare the NPS of competing companies in each regional market. However, at the time, managers were analyzing absolute numbers - and the figures did not match the company's vision of itself as a firm that values ​​fair treatment of customers. In their opinion, the company needed to develop.

The primary research revealed another fact: the telephone survey process used by the company conducting the marketing research, turned out to be surprisingly inadequate. First, it was impossible to “close the loop” with clients who had shown themselves to be detractors—neither to apologize, nor to identify the cause of the problem, nor to make a decision to eliminate their dissatisfaction. Second, responses to open questions submitted marketing company, were interesting, but managers tended to interpret them according to their own beliefs. Third, the responses were often misleading and contradictory. For example, it was not uncommon for promoters to praise the simplicity of a product, while detractors complained about its over-complexity. Undoubtedly, the management needed a deeper analysis in order to understand the underlying causes of the appearance of promoters and detractors.

In addition to these customer relationship assessments, some business units have begun adding the question "How likely is it that you would recommend?.." to the short surveys they were already using to manage the quality of various customer interactions. These responses provided a steady stream of unique NPS-related information that highlighted the hotspots and bottlenecks associated with customer experiences with the company.

For example, Intuit decided to charge for help desk calls for QuickBooks customers—even for new customers who had trouble getting the program up and running. The net customer support index for technical service was well below average, and it was immediately clear that the policy chosen was wrong. The specialists tested a number of alternatives to see how they would affect the performance. In the end, it turned out that the most cost-effective solution would be to offer free technical support for the first thirty days after purchase. As a result, the net support index for customers using the service increased by 30 points.

Tax group individuals– the birthplace of the industry leader, the TurboTax product line – faced a particularly difficult challenge. TurboTax's market share in the increasingly important internet segment declined by more than 30 points between 2001 and 2003. The managers of the division understood that they needed to better solve customer problems. One of the successful initiatives was the creation of a six thousand "inner circle" of customers, the feedback from which was supposed to have a direct impact on management decisions. Clients who have registered e-mail as members of this community, were asked to provide basic demographic information, they were also asked the question "How likely is it that you would recommend? .." so that the company can determine whether they are promoters, passives or detractors. Then they were asked to suggest improvements for TurboTax, which they would assign the highest priority, as well as vote for the proposals of other users of the "inner circle". A special program filtered the proposals and tracked their priority so that over time the most valuable ideas rose to the top of the list.

The results surprised everyone. For detractors, the main priority was to improve the quality technical support. To fix the problem, management reversed a decision made two years earlier and returned technical support functions from India to the US and Canada. In addition, the number of technical support staff has increased significantly. The second most important priority for detractors was to improve the installation process. He turned into the most important task for TurboTax software engineers who, in the 2004 version of the program, achieved a reduction in requests for technical support for installation.

The promoters' priorities were different. Top of the list was the ease of getting a price cut back: some customers complained that filling out all the forms took them longer than installing TurboTax and calculating taxes with it! After receiving this feedback, the division director assigned one of the employees to be in charge of the back-to-back discount process. Soon, the number of documents required decreased, the acquisition process was greatly simplified, and the time to receive a discount was reduced by several weeks. A little later, it became clear that even these improvements were not enough, and the management of the division considered the best solution for customers to refuse compensatory discounts. And the company took this bold step as part of a strategy to completely change the pricing system.

The Personal Tax Group continued to study net support indices for different client segments. As it turned out, new customers had the lowest rates in all clusters. The leaders called some of them to find out the reasons, and what they learned surprised and unsettled them. All those features that have been added year after year to attract different groups clients with complex tax needs, gave birth to a product that no longer made life easier for ordinary declarants. It turned out that more than 30% of new customers used the program only once. In response, management has identified a new priority for design engineers - program simplification. Soon, the question screens were changed to reflect the new design principles. Difficult tax terms were eliminated, and a new editor from People magazine was tasked with keeping the language simple and understandable. In tax year 2004, for the first time ever, Client NPS, who used the software for the first time, turned out to be even higher than that of existing users.

Intuit Results: Happy Customers and Shareholders

In two years, from the spring of 2003 to the summer of 2005, the TurboTax net support index skyrocketed. For example, the desktop version increased from 46% to 61%. NPS of new users increased from 48% to 58%. Most importantly, the retail market performance, which has been stable for many years, has grown from 70% to 79% - a real feat in a mature market. Performance improved across all major areas of Intuit's business. Due to its success, the Net Support Index has become a part of the company's day-to-day operations. “The Net Support Index gave us a tool to focus our organization's energy on creating better customer experiences,” said Steve Bennett, then the company's CEO. – Thanks to this index, we have gained an understanding on the basis of which we can do something. Every line of business [currently] includes it in its strategic plan; it is a component of all operating budgets and is taken into account when calculating bonus payments to each manager. The dynamics of this indicator is monitored at all monthly operational meetings.

At an investor meeting in 2004, when management briefed equity analysts and large investors on the company's progress and challenges and provided a vision for the future, Cook and Bennett reported that they had rekindled the company's commitment to building customer loyalty. They described how the net support index allowed the team to transform the historically vague goal of building good customer relationships into a clear, quantifiable process. Just as Six Sigma helped Intuit reduce costs and improve quality, the Net Support Index enabled Intuit to prioritize and measure progress towards its fundamental goal of winning customer loyalty.

Although there was still long haul, Cook and Bennett noted that the new initiative was, by and large, a return to the roots of Intuit's success. As the company has grown, so has the need for a common metric that can help everyone strike a balance between immediate profits and improved customer relationships that drive future growth. “We have all the customer metrics the world has to offer,” Cook said. “However, we were unable to ensure that, based on these indicators, the company focused on the core value - the right treatment of customers. The more indicators we track, the less useful they are. It was important for each manager to focus on exactly that indicator, which would not allow doubting the correctness of his decisions. The concept of using just one universal indicator has provided a huge advantage to all of us equally: customers, employees and the company.”

By presenting the net support index as the main metric to revitalize growth in key areas, Cook and Bennett wanted to convince their colleagues that this initiative is not a "today-tomorrow-not" initiative. On the contrary, it represents a business-critical priority that is so significant to the future of Intuit that it deserves the attention of shareholders. In this way, Intuit's leaders were also signaling to shareholders that they could learn more about the company's net support index at the next investor meeting. Perhaps this event even heralded the day when all investors will insist on obtaining reliable performance measurements in the field of customer relationship quality - because only then will they be able to understand the economic prospects for sustainable and profitable growth.

In the meantime, Intuit continues to look for ways to satisfy customers and turn as many of them into promoters as possible. The company recently introduced an innovative tax calculation product that allows you to prepare and file a range of tax deductions using smartphones. Clients with a simple tax return could simply take a photo of the W-2 form with their smartphone and the information was automatically entered into the appropriate fields on the tax return. After answering a few simple questions, you can view, print and file your tax return using your smartphone. and st about um it's only $14.99. The new product, SnapTax, was released nationwide in tax year 2010 and achieved an NPS of 72%, the highest for a new product in the company's history.

3. How NPS Drives Profitable Growth

Gerard Kleisterli, CEO Royal Philips Electronics, faced a daunting challenge. The company has become one of the largest electronics manufacturing enterprises in the world due to its high level of engineering and product-oriented culture. Kleisterli deeply appreciated this culture, since he himself had technical education and worked at Philips all his life, like his father before him. But now the company culture had to change. The competition in the market has increased like never before. Customers expected more than before.

Kleisterli believed that if Philips no longer focused on customers, then the company's growth would stop. So he commissioned the then CMO, Geert van Kyck, to analyze and evaluate approaches to culture change, selecting the best ones for Philips. The ideal approach would be in line with the company's strategic philosophy of "common sense and simplicity". It was necessary to provide a level of rigor and discipline that would earn the respect of Philips engineers. This approach also had to be globally scalable. With revenue in excess of 25 billion euros in 2010 and around 125,000 employees in more than 60 countries, Philips was a huge, fast-growing company. Its activities were divided into three sectors: healthcare (including imaging systems such as CT scanners, MRI equipment and X-ray machines, plus patient monitoring systems, Information Systems and home health care systems) consumer goods(electric shavers, coffee makers, baby care products, kitchen and Appliances, TV, DVD and Blu-ray players and electric toothbrushes) and lighting systems (professional, as well as for home and car). Kleisterli understood that changing the culture in such a large and complex company would be a major challenge, so he signaled to the board of directors that this project should be a critical priority for all management.

Van Kyke knew what it was like to work in customer-centric organizations, having worked at Procter & Gamble and Starbucks before joining Philips, and he understood the scale of change that might be needed. So he explored different options to help Philips make this transition to customer focus. After evaluating all the approaches used by large firms around the world, van Kyck settled on NPS, explaining it as follows:

We liked the NPS because it represents a single standard that all businesses can agree on. Each sector developed its own unique approach to measuring customer satisfaction and they all wanted to continue using the existing system, but few were getting results and none of the existing systems were linked to financial performance. That's why I had to look around for the right solution. This is one of the biggest benefits of NPS: it is directly related to revenue growth and inspires action.

First, “it is directly related to revenue growth…” In their analysis of NPS, van Kyck and his management team found a strong relationship between Philips' NPS, compared to the NPS of its strongest competitor, and its growth rate, relative to competitors. The results of the analysis are presented in fig. 3.1 and 3.2. On fig. In Figure 3.1, the range of NPS of competing companies in a particular business area is represented by bars, two slashes indicate the average NPS, and Philips' NPS is represented by a triangle. Like other companies, Philips has learned that having an NPS higher than the competition is much more important than just reaching a certain absolute value. For any given business, such as electric shavers in China, the median growth rates of the leading companies were eight percentage points higher than those of competitors in the same market. Where Philips underperformed all of its direct competitors, its growth was five percentage points slower than its competitors (see Figure 3.2). After Philips' local divisions looked into the issue more closely and collected more detailed data on NPS, market-specific growth rates and market share changes, they found an even stronger relationship. For example, in the US portion of a healthcare business, Philips found that relative NPS accounted for 90% of market share changes for Philips and key competitors.

Rice. 3.1. Comparison is best done with direct competitors using a top-down approach

Rice. 3.2. Philips divisions that outperform competitors grow faster and win market share from them

Many corporations around the world have done similar analysis, and the results are pretty much the same. For example, the large insurance group Allianz analyzed its relative NPS and growth in the same way as Philips and got similar results. Both companies set strategic goals based on the results of this analysis and shared them with investors and equity market analysts. Philips' 2009 Annual Report provides an update to its analysis of relative NPS, which found that 60% of the company's revenues came from divisions with leading NPS positions. The long-term goal that Kleisterli and his team tied to rewarding all Philips managers is now based on achieving absolute leadership (just sharing leadership positions with other companies is no longer enough). The goal is to achieve NPS leadership of 50% of market positions by 2015.

And secondly, "... encourages action." While the metric was useful for setting goals and measuring progress, van Kayck and Philips' business leaders were particularly pleased with the way the NPS spurred action. Feedback was specific, real and quick. Team members at all levels of the organization could relate the value of the indicator to what would be the appropriate response. For example, leaders in the service delivery sector to corporative clients(B2B) quickly realized that they could improve customer service for MRI, CT, ultrasound, and other services based on feedback received directly from patients in MRI laboratories and hospital administrative departments. They also had the opportunity to take this feedback into account when changing and updating products. In the chapters that follow, we will provide many examples from Philips and other companies and show that NPS is not only about growth, but also inspires action that drives growth.

Customer-centricity is a higher level of company development compared to customer-centricity. Note. ed.

Stakeholder (literally - "owner of the share") - a person (natural or legal), whose contribution (work, capital, resources, purchasing power, dissemination of information about the company, etc.) is the basis for the success of the organization. Usually they mean shareholders, employees, consumers, suppliers. Note. ed.

Reichheld Fred, Marky Rob, Sincere Loyalty. The Key to Winning Clients for Life, Moscow: Mann, Ivanov and Ferber, 2013. 352 pp. Review

Sincere loyalty.
The key to winning customers for life

Ask a stupid question
and you will get a stupid answer.

English proverb

Albert Einstein

Everything can be proven with numbers.
anything.

Thomas Carlyle,
19th century English publicist

To begin with, we note that the Russian title of the book has nothing to do with its English title (The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World). It's something like: "Most Important/Final Question 2.0 - How do companies using the index Net promoterScore(NPS) thrive in a customer-driven world." No loyalty to you (By the way, it really happens and NOT sincere loyalty?), no customers for you for life. Gentlemen from the MIF publishing house, well, why hang such noodles on the ears of readers?

(Yes, by the way, loyalty cannot be key to win customers, she - result conquest. The key can only be customer focus.)

What are 352 pages of the book devoted to? You will not believe it, but they are all filled with repeated repetitions, exaggeration, sucking, washing and praising the merits of just one very strange question, which, according to the author, is a must, well, just a must (!!!), you need to ask all existing clients of all companies without exception. Potential clients of the author do not care.

The big question is:

The author of the book, Frederick Reicheld, is the perfect product of Harvard, or rather of all the musty that was left in it after the departure of the wonderful marketing thinkers Peter Drucker and Theodore Levitt. He is deeply convinced that in marketing there is nothing more important than measurements, figures and mathematics. And the fact that measurements may turn out to be meaningless, far-fetched numbers, and mathematics based on the principle of "garbage in, garbage out" does not matter to him.

If Reicheld were a physician, then for him the main thing in medicine would be temperature measurement, pressure and other physiological indicators of the body, and the process and result of treatment would hardly have interested him at all.

Now let's take a closer look at this grand question. It is proposed to ask an indifferent respondent. He is expected to offhand estimate nothing more nor less than the probability of his own (!?) decision to recommend something to someone.

(Reader, I believe you have already begun to spin this question in your mind.)

This book turned out to have plenty of critics - not all of them are idiots! Their arguments seemed reasonable to me. Besides, I had enough of my own objections. One critic wrote, "There's so much wrong with Net Promoter...I don't even know where to start."

Regarding the mathematical exercises of our author, it would be interesting to hear the opinion of specialists in probabilistic (stochastic) processes. The point is that by asking the question “To what extent probably that…”, the author thereby transfers the “discourse” to the field of probability theory. This branch of mathematics deals with random events, i.e. with events that the individual has no control over. So, from the point of view of probability theory, it is correct to ask “How likely is it that, say, 5 will fall out when playing six-sided dice?” - the results of the dice game are random; but the author’s question is completely illiterate: “How likely is it that would you recommend us to a friend or colleague?”, since there is no chance here.

Those who put 9-10 points, the author calls Promoters ("promoters"); those who put 7-8 points - Passive; and the rest the author proposes to call Detractors (i.e. "take away"). All figures are converted into percentages of the total number of respondents.

That's it. Only feelings, and the brains of the author's clients are not interested. Our ingenious author can measure your feelings, and quickly. Doesn't it scare you?

Some preliminary mathematical perplexities:

Why the 11-point scale?

Where did these ranges come from?

Why exactly three ranges, and not two or four?

Etc. etc.

Then the author proposes a strange mathematical operation (without any proof, of course!): For some reason, the percentage of Detractors should be subtracted from the percentage of Promoters. The result Reichheld calls "simple and understandable measure" - the Net Promoter Score® (or NPS) index. Understandable to whom? To him?

So, Dr. Reicheld mechanically subtracts from the percentage of Promoters (P) the percentage of Detractors (D), for some reason ignoring the Passives. But even a student elementary school will notice that with this approach, you can get, say, 20% NPS in many ways: 20% (P) - 0% (D); 30% (P) - 10% (D); 60% (P) - 40% (D); etc.

But, allow me, these differences describe perfectly different companies, different situations, different industries! They require radically different marketing approaches! And there is only one index! And the author offers us nothing but him.

Further, the author admits that "Each negative comment neutralizes three to ten positive ones". But that's not all. It is known that a satisfied client (Promoter) will talk about his "satisfaction" with the company, its products, etc. only two or three people (if he tells anyone at all); dissatisfied will tell 10-20 potential customers. In other words, it will take 10-50 Promoters comments to compensate for one negative Detractor comment. It follows that one percent increase in Detractors in its effect is equal to 10-20% increase in Promoters. The model does not reflect this.

Further, the author ignores the central part of the scale, the so-called. Passive, and is played only with the edges of the spectrum. This principle of deriving NPS will be incomprehensible to many, in particular, to the developers of the new scoring system in figure skating: in this system, extremes (highest and lowest scores) are discarded as uncharacteristic. This makes more sense to me. By the way, the practice of "cutting off the edges of the spectrum" is widely used in many other models.

By the way, there are many illiterate phrases in the book from a mathematical point of view.

The author's ideas about marketing are even more miserable than his ideas about mathematics. It is interesting that the book seems to be devoted to purely marketing issues of customer focus, but the word "marketing" in the book is rare and not always appropriate. The author is unaware that the main task of a marketer is to “prepare the buyer for purchase” (Peter Drucker). The hero of this work is not a creative, inventive client marketer who prepares a client for a purchase, but a pseudo-mathematician, a data collector that is not related to purchases.

Reicheld is distinguished by a misunderstanding of even the very basics of customer marketing. For example, he literally recommends all firms to be guided by the so-called. "Golden Rule": "Treat others the way you want to be treated." He comes up with an amazing idea: “How likely?...” is a practical shorthand for asking if you are following the golden rule. He returns from heaven to earth, to business. Oh really!?

Let's remind Dr. Reicheld that there has been a lot of talk about the inapplicability of the golden rule in marketing for a long time. So, back in 1936, Dale Carnegie said: "I love strawberries and cream, but the fish loves the worm, so when I go fishing, I take the worm, not the strawberries and cream." Reichheld, according to his favorite "golden rule", would have fished for strawberries.

We also remind him that marketers are taught to be guided by the so-called. "Platinum Rule": "Treat others the way they would like to to treat them". They are taught to look at everything in business through the eyes of the customer.

Now let's think about the meaning, or rather the meaninglessness, of the responses to the "ultimate question" received. The question concerns a very delicate topic of recommendations (advice, consultations) regarding products and companies.

How many "recommended-able" products, product categories and companies are there in the mind of the average layman?"Does anyone need advice on the thousands of banal, interchangeable, 'commoditized' products we purchase every day?"

In search of answers to the last question, it is desirable for us to take into account the fact that:

– The average layman remembers only a couple of hundred “marketing names”.

- He acquires a lot simply out of habit or by making a decision right at the point of sale, trying it on, trying it out, evaluating it on the spot.

In general, attempts to explore the opinions, and even more so the feelings, of people with the help of numbers are almost always doomed to failure. It is no wonder that many established marketers, such as the theorist Peter Drucker and the practitioner Akio Morita, called for no quantitative research. Fans of tsifiri for the sake of tsifiri Theodore Levitt called "researchers-storytellers" (research-fabulists). (Cm. " The trick of market research)

If the "storyteller" Reicheld had a marketing mindset, and it starts with the ability to look at everything in the business through the eyes of the client, then he would start with this client. He would begin by considering and in-depth hemispheric analysis of the situation: a poor layman who is not very concerned about the topic of recommendations is approached by a serious organization with a serious request to estimate, and in some strange numbers, the probability (and many do not even know what “probability” is). ”) of the fact that he, the poor fellow, once recommends something to someone to buy. Simply put, he is asked to poke at some number, the meaning of which he does not really understand. By the way, among other things, it would be worth asking the respondents how, for example, 6 on the Reicheld scale differs from 7 in their minds?

If a person agrees to participate in the survey, how does he behave? What circumstances will influence his answers? It is useful to be puzzled by this even when he can easily answer clear questions. And if the question is vague, as in this case, and also includes abstract concepts such as "probability", then ... well, you understand.

It has long been known that much, in particular, depends on the mood of the respondent and his attitude towards the interviewer. If the interviewer is nice to him, then he will subconsciously try to please him with his answers. But his answer will be essentially a half-opinion or even a pseudo-opinion, i.e. useless information.

Critics of NPS also rightly point out, "Why spend money and time measuring what a person says they would 'do' when you can get real recommendations for free just by scanning people's opinions of a company and its products on social media."

Reicheld is considered an expert in customer loyalty. For some reason, he believes that the declared willingness to recommend a company or product is a measure of this loyalty. More sophisticated researchers note that with the increase in the number of offers and the commoditization of products in each product category, loyalty to a particular brand has become more of an exception. In this category, people identify a group of brands that are interchangeable for them. Often they buy the brand from the group for which they currently offer the best discounts. This has long been called “polygamous loyalty” or “portfolio loyalty”. But our expert has not heard of anything like that.

(If you're interested in sober modern approach to questions of loyalty, I recommend the book "Myths about Marketing and Consumer Loyalty" by T. Keyningham, T. Vavre, L. Aksoy and G. Wallard . By the way, F. Reicheld's fantasies are discussed there in the chapter "The Myth of Loyalty No. 27". I recommend reading.)

And finally, as even the enthusiastic author himself admits, in those firms that have made NPS an important criterion for evaluating the performance of personnel, fraud, bribery of respondents and other abuses flourish.

Astute reader, given all of the above, appreciate the value of the resulting NPS data.

Okay, but is there any question at all, the answers to which can help the marketer improve something? Yes, sure. This question might sound like this:

“What do you NOT like about…?”

It is easier for people to answer this specific question than to poke into some incomprehensible numbers. But most importantly, the answers to this question provide food for fruitful marketing thinking and suggest ideas for effective improvements. I myself use this question when the opportunity presents itself.

Solving the problem of one disgruntled customer can help other customers. One of the advantages of questions that cause "fire on yourself": not only dissatisfied, but also the most satisfied customers can have valuable offers.

Bill Gates understands this very well: Your most dissatisfied customers are your best teachers.”

So, real client marketers should appreciate these "teachers", learn from them and, if possible, involve them in mutually beneficial processes.

This is understood, in particular, by those software companies that offer users to take an active part in fine-tuning their software. An example is Microsoft with its Customer Participation in the Customer Experience Improvement Program. Many companies use beta testing with user participation.

It's sad that loyalty guru Reichheld doesn't understand this. I was struck by the fact that he actively dislikes the Detractors precisely because they complain a lot, "thus consuming customer service resources". A man would be happy, but he ... It's strange that he never understood that these complaints suggest more productive ideas than terabytes of answers to his "priceless" super-question.

Our Reicheld clearly does not like criticism in any form. Thus, he scorns critics of his amazing theories, calling them Net Pro-Moaners (pure whiners) and claiming that they are driven by purely selfish interests. (Me too, probably.)

One funny moment: the author describes the method of communication with customers at Enterprise Rent-A-Car: “Employees it is forbidden to ask the client if he is completely satisfied (this is a variant of the grand question!); instead, one should ask what else can be done to improve the quality of service(this is a variant of the question “What do you NOT like…?”), and then take appropriate action immediately». Is the author really so stupid that ... well, you understand me again.

Remote 3-month

Additional reading:

"Myths about marketing and consumer loyalty", a book by T. Keyningham, T. Wavre, L. Aksoy and G. Wallard (by the way, F. Reicheld's fantasies are sorted out there in the chapter "Loyalty Myth No. 27".)

Scientific editor of the translation Irina Chichmeli

All rights reserved.

No part of this book may be reproduced in any form without the written permission of the copyright holders.

Copyright © 2011 Fred Reichheld and Bain & Company, Inc.

© Translation into Russian, edition in Russian, design. LLC "Mann, Ivanov and Ferber", 2018

* * *

To my wife Karen with love and devotion

Foreword

This book tells you how companies can start on the path to growth the right way—growth that happens because customers and employees love what the company does. And they sincerely recommend it to their relatives and friends. This is the only type of growth that can be sustained for a long time. Acquisitions, aggressive pricing strategies, product line expansions, new marketing campaigns, and many other tools in a CEO's toolkit can produce quick results in the short term. If these steps do not result in satisfied customers, growth will be short-lived. The same applies to market share. Dominant position in the market is often provided by companies competitive advantage. However, if this potential is not used to make customers smile, then neither this advantage nor dominance will last long.

At present, this concept takes on a special meaning against the backdrop of the "quiet revolution" that is sweeping the business world. This revolution, like many others that are shaking the modern world order, draws strength and acceleration from the development of social media tools. Customers and employees post on blogs and Twitter and share their experiences in real time. This information flow surpasses in its volumes the carefully prepared advertising and PR departments. Power is shifting from the hands of corporations to those who buy their products or services and those who work for them.

To emerge victorious from this revolution, business leaders need to find ways to motivate their employees to keep their customers satisfied. Most leaders want to keep customers happy the question is how to understand exactly how customers feel, and how to determine a responsibility for their impressions. Traditional satisfaction surveys are not suitable for this. They contain too many questions, they encourage analysis, not action. Financial statements are also not good. As we shall see, standard accounting fails to distinguish between “good returns”—that is, they enable growth—from “bad” returns that hinder growth.

The book offers a completely new approach. It consists in the fact that companies ask only one - the main - question constantly, systematically and on time.

Based on the answers to it, a company can divide its customers into those who love it, those who hate it, and those who are indifferent. She can use a simple and easy to understand metric, the Net Promoter Score®, which shows how well she has excelled in customer relationship building. This index can be tracked on a weekly basis, just as every company tracks its financial results.

After that, the company can start the real work: “closing the loop” with customers, listening to them, fixing problems that create dissatisfaction or negativity, and, on the contrary, create interactions that lead to greater satisfaction. It can involve every employee in finding ways to implement true customer centricity. 1
Customer-centricity is a higher level of company development compared to customer-centricity. Note. ed.

in his daily work. Just as today's managers use financial statements to make sure they and their teams are meeting their profit targets, they can use the net support index to make sure they're meeting customer relationship goals. This system helps companies win the "silent revolution".

The companies that pioneered the use of this system have already learned this lesson and a few steps outperform their competitors. These companies range from small private enterprises to Silicon Valley superstars to global giants like General Electric. (“This is the best measure of customer relationship I have ever seen. I don’t understand why any of you don’t want to try it!” exclaimed the CEO 2
Hereinafter the head of the company. Note. ed.

General Electric Jeff Immelt at a meeting of top managers). Differing from each other in many ways, these companies have one important quality that unites them: they take seriously the "golden rule", which says: "Treat others the way you want to be treated." These companies want their customers to be so satisfied with the way they are treated that they would love to come back and bring their friends and colleagues. In addition, while the examples presented in this book are drawn from the business world, organizations of all kinds—schools, hospitals, charities, and even state institutions can put these ideas into practice. At non-profit organizations There are also clients or constituents who also need to satisfy the people they serve, and they too can greatly benefit from a management system based on timely and regular feedback from their clients.

We hope that together we can create a community of people who believe that every company and organization sincerely wants to improve the lives of those they interact with and build relationships based on loyalty, and believe that in order for a company to have the opportunity for long-term prosperity and greatness it needs to measure its performance in this area as carefully as it measures its profits.

Introduction

From Assessment to System

It always seemed to me that success in business and in life should depend on the impact on the people with whom fate brings you together - on whether you improve their lives or worsen them. Financial accounting, for all its importance, completely ignores this fundamental idea. So a few years ago, I created a way to measure how well an organization treats the people it influences—that is, how well it creates relationships worthy of loyalty. I called this the Net Promoter® Index, or NPS. 3
This trademarked term is owned by Satmetrix Systems, Bain & Company and Fred Reicheld. By issuing this status, we had two goals: to promote universal and uniform use of the word "NPS" and to protect the term from misappropriation of rights to it.

Thousands of innovative companies including Apple, Allianz, American Express, Zappos, Intuit, Philips, GE, eBay, Rackspace, Facebook, LEGO, Southwest Airlines and JetBlue Airways have adopted NPS. Most of them first used it to track the loyalty, engagement, and enthusiasm of their customers. They liked that NPS was easy to understand. They also liked it because it helped everyone focus on the same goal of treating customers so that they would become loyal promoters, and leading to the actions needed to achieve that goal. They also liked the versatility of this tool, the ability to adapt it to the needs of a particular company. Over time, companies have refined and expanded this indicator. They began to use it to create employee engagement and loyalty. They discovered new ways to extend the impact of this indicator not only to the measurement of loyalty, but also to change in the organization. Companies shared ideas with each other and refined the mechanisms for applying NPS, taking into account the characteristics of their work, based on each other's experience. In the face of an extraordinary creative intellectual explosion, NPS quickly transformed into something more than just a metric. Despite the fact that this branch of knowledge is still young, it has become a management system, a way of doing business. And the abbreviation NPS itself began to mean system(from the English system), and not just an index (from the English score).

Now let's see what results this system has brought. Here's what company leaders say about it:

NPS stimulated our thinking and allowed the organization to focus on the customer. In the 1970s and 1980s, TQM revolutionized the cost of quality assurance in manufacturing. NPS is of comparable importance nowadays.

Gerard Kleisterli, CEO of Philips

The NPS system was perfect for Apple. It is firmly rooted in the DNA of our retail stores.

Ron Johnson, Senior Vice President and Founder of Apple Retail

NPS has completely changed our world. It has become an integral part of our workflow and culture. Now this system can no longer be removed from them, even if such an attempt is made.

Junien Labrousse, Executive Vice President and Chief Product and Technology Strategist, Logitech

NPS is a litmus test that allows us to understand how our lives correspond to our core values. This is the first app I look at when I boot up my computer every morning.

Walt Bettinger, CEO of Charles Schwab

NPS is the most powerful tool we have ever implemented. And the reason is that it encourages action.

Dan Henson, former director of marketing at General Electric

We use NPS every day to make sure we exceed the expectations of our customers and employees.

Tony Shay, CEO of Zappos, author of Delivering Happiness4
Shay T. Delivering Happiness. Moscow: Mann, Ivanov i Ferber, 2010.