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Chapter from: "The Ultimate Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer-Driven World"
Published by: Harvard Business Publishing
Published in: 2011

Abstract

Back in the days when every business was a small business, proprietors knew what their customers thought of their products by the looks on their faces: they knew them all personally. But in today's world of giant corporations and big-box stores, most managers never see their customers. Instead, they are laser-focused on how much these customers are spending. If the bottom line is growing, that's good, right? Not necessarily. In this chapter, world-renowned expert on loyalty economics Fred Reichheld and his Bain colleague Rob Markey use the customer-relationship crisis financial software company Intuit faced in 2003 to illustrate the power of the Net Promoter score - the single number that reliably links customer attitudes to customer behavior. After tracing the development of NPS, Reichheld and Markey describe how Intuit applied this new metric to customer segments in each of its major product lines. The results were eye-opening and transformative: Intuit realized that to convert its ‘detractors’ into ‘promoters’ - and recoup its declining levels of customer loyalty and satisfaction - it needed to reverse some key business decisions, establish new priorities, and change course in a variety of ways none of its leaders had foreseen. This chapter is a testament to the power of NPS - and The Ultimate Question - in quantifying customer loyalty and enabling business owners to realize profitable growth while at the same time delighting their customers. This chapter was originally published as Chapter 2 of ‘The Ultimate Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer-Driven World.’ This chapter is excerpted from ‘The Ultimate Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer-Driven World'.

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Abstract

Back in the days when every business was a small business, proprietors knew what their customers thought of their products by the looks on their faces: they knew them all personally. But in today's world of giant corporations and big-box stores, most managers never see their customers. Instead, they are laser-focused on how much these customers are spending. If the bottom line is growing, that's good, right? Not necessarily. In this chapter, world-renowned expert on loyalty economics Fred Reichheld and his Bain colleague Rob Markey use the customer-relationship crisis financial software company Intuit faced in 2003 to illustrate the power of the Net Promoter score - the single number that reliably links customer attitudes to customer behavior. After tracing the development of NPS, Reichheld and Markey describe how Intuit applied this new metric to customer segments in each of its major product lines. The results were eye-opening and transformative: Intuit realized that to convert its ‘detractors’ into ‘promoters’ - and recoup its declining levels of customer loyalty and satisfaction - it needed to reverse some key business decisions, establish new priorities, and change course in a variety of ways none of its leaders had foreseen. This chapter is a testament to the power of NPS - and The Ultimate Question - in quantifying customer loyalty and enabling business owners to realize profitable growth while at the same time delighting their customers. This chapter was originally published as Chapter 2 of ‘The Ultimate Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer-Driven World.’ This chapter is excerpted from ‘The Ultimate Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer-Driven World'.

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