When I started reading Fred Reichheld’s book, “The Ultimate Question: Driving Good Profits and True Growth”, I more or less agreed with his theories. His NPS formula makes sense (although realistically I think it would be very difficult to calculate): promoters minus detractors equal a company’s Net Promoter Score, or NPS.
Then I read the second half of the book and wasn’t so pleased. It really bothered me that Reichheld spent several chapters telling companies that they needed to create things like the customer grid on page 120 to develop a plan to increase their NPS. To me, an NPS is not about charts or complicated mathematic formulas. It’s actually pretty simple: happy employees plus good business practices equals a high Net Promoter Score.
The corporation’s focus should be on its employees and customers, and the end result of satisfying them is an increase in the company’s NPS. I disagree with Reichheld’s statement: “When a company focuses on improving its NPS, by contrast, its employees are happier.” Although this is somewhat a case of, “What came first, the chicken or the egg?” I really think that this process has to begin with the customers and employees. The ultimate goal of the NPS is to increase a company’s profits and, although this might be idealistic, a company should try to set aside its financial goals for just a moment and truly concentrate how it should treat the people who support the corporation every day.
The Irish supermarket chain Superquinn is a great example of how an NPS can increase as a result of focusing on making sure employees and customers are content. Reichheld told the story of the chain owner, Feargal Quinn, hiring a new manager. This manager saw that the stores were throwing out thousands of pounds of freshly baked bread each day, and he felt that the stores should keep it and sell it again the following day. Even though the supermarket had a policy of selling fresh baked bread daily, the manager insisted that the stores make this change. They did, and bakery sales dramatically decreased.
“The customer experience should never be sacrificed for profits,” Reichheld wrote. And this is so true. A very recent example of this lesson is apparent in Jane’s blog post from last week. She tells the story better than I do – so you should read it – but the main point is that companies cultivate more promoters when they do genuinely nice things for customers instead of just focusing on the bottom line. And when corporations treat their customers (and employees) with the utmost respect, their profits magically increase. Funny how that happens, isn’t it?
Digital Musings 