Posts tagged NPS

This past weekend I was lucky enough to have a few spare moments to spend in my garage workshop. I spend most of my time during the week working on strategic initiatives, so it’s a nice change of pace to run a hand plane across a piece of wood and see immediate, tangible results.

As I surveyed all of the saws, chisels, planes, and other assorted tools in my workshop, I started thinking about the reason for owning all of these tools – and the lessons that can be applied to the field of Customer Experience

Selecting the Right Tool for the Job

One of the most important (and most frequently overlooked) rules in woodworking is to always use the right tool for the job. The more cynical amongst us might suspect that this maxim was created by tool manufacturers to sell more products – but experience tells me that using the wrong tool can be dangerous to the user, inefficient, and damaging to both the tool and the work piece. This holds true even when comparing a superior tool to an inferior tool.

Consider, for example, the chisel. Considered by many to be the most important tool in woodworking, a well sharpened chisel is a thing of beauty. I recently had the good fortune of borrowing a friend’s Lie-Nielsen Skew Chisel – a remarkable piece of craftsmanship that retails for about $130. This tool is well balanced, maintains a sharp cutting edge, and stays true against the work piece.

But this $130 chisel is inferior to a $1 pry bar from the dollar store – if the job is prying something loose. While the expensive chisel might objectively be a better tool, it is useless when used for the wrong job.

What Does a Chisel have to do with Net Promoter?

Critics of Net Promoter often argue that NPS is inferior to other, more thorough methodologies. They argue that Net Promoter is fundamentally flawed, illogical, and not statistically valid.

This raises the question – If NPS is so deeply flawed, why then have CEOs at companies such as General Electric, Charles Schwab, Intuit, Zappos, Cisco and American Express adopted its use? Some critics claim that it is because CEOs simply aren’t smart enough to understand the complicated business of customer loyalty.

I don’t buy that. I cut my Net Promoter teeth at Rackspace Hosting, where Net Promoter is championed by CEO Lanham Napier. Now, a little bit about Lanham’s background – he studied Economics at Rice and earned an MBA from Harvard Business School. He started his career at Merrill Lynch, and was later hired on at Rackspace as their Chief Financial Officer. He earned the top job based on his remarkable performance as CFO and has since led the company to achieve over a billion dollars in annual revenue on an industry-leading churn rate of just 1.9%.

I share Lanham’s background to illustrate my point – does this sound like someone who is too stupid to comprehend customer loyalty? That’s what some market research vendors and career academics would have you believe, but I’m not buying it.

The more likely explanation is that Lanham, having evaluated the work that needed to be accomplished, selected Net Promoter (flaws and all) because it was the best tool for the job at hand.

The Job of Cultural Transformation Requires a Tool like Net Promoter

CEOs, Customer Experience Leaders, and other operating managers who want to increase customer loyalty understand that customer experience is the result of the actions of every single employee in the company – especially the front lines where most customer interaction takes place.

Inspiring customer-centric thinking amongst employees won’t come from thick binders produced by market research vendors, nor will it come from peer reviewed academic journals. A company cannot become truly committed to customer loyalty without capturing the hearts and minds of the culture.

In order for a company to truly become customer-centric, every employee must find customer loyalty relevant to the work they perform every day. They need a common vocabulary for discussing loyalty, a shared set of tools for increasing loyalty, a standardized dashboard for tracking loyalty, and a clear line of sight to how they can improve loyalty.

This requires making tradeoffs – leaders like Lanham understand that it is acceptable to forego the higher level of statistical accuracy that more complicated methodologies may offer in order to gain better buy-in and ownership from their employees. These leaders understand the trade-offs of taking loyalty out of the hands of the market research department – who might produce objectively “better” data – to ensure that loyalty lives in the operating system of the business.

Very few (outside of the publicist at Reichheld’s publisher) truly believe that Net Promoter is the “ultimate” business system – that is to say, the right tool for every job. But for the crucially important job of interweaving customer loyalty into the DNA of an organization, you’d be hard pressed to find a tool that is more sharp, balanced, and true than Net Promoter.