Here’s the second half of our speed summary of Fred Reichheld‘s business bestseller The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World, written with Rob Markey - partner at global consultancy Bain & Company (see here for Part I).  We think this is a landmark book in establishing the business rationale for investing in social media and social commerce as a channel for driving customer loyalty.

This part of the speed summary is a chapter summary of the second half of the book which contains practical the “how to” experience of companies – large and small – deploying the Net Promoter System to profit from the recommendation economy by prioritising customer loyalty (read part one for the foundations of the Net Promoter System).  It’s not specifically related to social commerce – or even social media – but you’ll find some compelling lessons about how to turn your customers into an army of loyal promoters.

Chapter Summaries: The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World (Part II)

by Fred Reicheld with Rob Markey (Harvard Business Review Press 2011)

Part 2 Getting Results

Chapter 6: Winning Results with NPS

The Net Promoter System is about driving change through a strategic prioritisation and operational focus on customer loyalty – creating more promoters and fewer detractors – by applying the Golden Rule (treating customers as you’d want to be treated) – throughout the organisation. Based on experience of NPS adopters, there are three keys to NPS success

  1. Embracing the goal of customer loyalty as a mission-critical priority at CEO and board level, and understanding the economic, inspirational and moral imperative that a focus on driving loyalty offers
  2. Hardwiring NPS monitoring feedback into key decision processes and integrating it into operational priorities throughout the organisation to create closed-loop learning and improvement.  In other words, not treating it as a metric, or parallel program is critical to success
  3. Adopting NPS as solution for driving long-term customer-centric cultural change, rather than a short term program or initiative, and realising the change must touch every part of the organisation


Chapter 7: Economics and Inspiration: The Dual Imperatives

The Net Promoter System is like an arch built from two pillars – one economic and the other inspirational.  Both are needed for success for driving growth through good profit. The economic pillar is about understanding the business case for investing in customer loyalty, and requires calculating the return on investment on creating more promoters and fewer detractors.  It requires having the CFO embrace NPS, and understand why investment in loyalty makes good business sense – and why good profits are more valuable than bad profits.  The inspirational pillar of NPS is about helping organisations enrich peoples lives by providing a simple decision rule or ‘heuristic’ – the Golden Rule – for taking decisions across the business, as well as a simple feedback solution – the NPS score – for monitoring how they are living up to this mission.  By putting the Golden Rule – ‘is this how I’d want to be treated?’ – top of mind of the business, the NPS makes customer-centricity personal, drives loyalty creation, as well as simplifying complex issues whilst making ethical business decisions communicable, measurable, and actionable.

Chapter 8: Close the Loop with Customers

Key to success in driving cultural change and customer-centricity through a focus on customer loyalty by making the NPS a core part of daily workflow and core decision processes within the company.  Most organisations want to become more customer-focused and the Net Promoter System is a simple solution for achieving this cultural change.  Not only does the NPS provide a simple decision heuristic – the Golden Rule – that can be used be used to inform decisions across every level of the organisation, the NPS also hardwires the voice of the customer into the organisation by providing creating customer feedback loops at the front line, mid and senior management levels. Closing the loop at the front line involves monitoring customer experience with NPS and then following up with as many detractors as possible, ideally within 24 hours of the experience.  Insights and learning from this ongoing exercise are then pooled, and shared with frontline staff and used to inform decisions. Closing the loop for mid-level managers requires using NPS feedback to create products, services and processes designed to attract and retain high value customers.  Closing the loop for senior executives involves setting up a forum for senior teams to talk with customers, and setting NPS targets as a strategic object for business units.

Chapter 9: Organise for the Long Journey

The payoff of NPS – a customer-centric organisation generating good profits through a single-minded focus on customer loyalty – can be substantial.  But the commitment required is substantial too. Based on the journey of successful NPS companies there are 7 key requisites of success: 1/ Assign the Right Leaders and Position Them for Success. 2/ Pull The Organisation Together 3/ Reorganise Around the Customer 4/ Hire & Fire the Right People 5/ Be Careful About Linking NPS to Compensation 6/ Don’t Skimp on Support from the IT Department 7 / Never Give Up

Chapter 10: The Road Ahead

Building a Golden Rule business thriving on ‘good profits’ is a long road with opportunities and challenges.  Two key opportunities include using NPS as to monitor employee experience and loyalty, as Apple, Rackspace, JetBlue and Bain, and developing new NPS monitoring tools using social media; Facebook and Zynga have adopted NPS internally, can their platforms be used to monitor NPS?  However there are some key challenges too; dealing with legacy systems not built with customer-centricity and the prioritisation of customer loyalty in mind, overcoming internal and external resistance from those with vested interests, and ensuring score reliability. In dealing with these opportunities and challenges it is important to keep front of mind the purpose of the Net Promoter System – as a solution for creating a customer-centric organisation that prioritises customer loyalty with decisions that enrich lives, rather than diminish them.

Appendix: Advice for the Journey

Net promoter companies share their experiences and real-world top tips for successfully deploying the Net Promoter System: Allianz, American Express, Atlas Copco, Cancer Treatment Centers of America, Cintas, E-on, Intuit, Lego, Philips, Progressive Insurance, Qantas, Schneider Electric, Sodexo, Swiss Reinsurance, Verizon, Westpac.  Get the book for details, and join the netpomoter.com forum.

NB. The Net Promoter System logo in the header is owned by Bain and is a Bain service mark.