“Winning on Purpose” Reminds Businesses of Where Profits Come From





CONTENT
FRESHNESS
USEFULNESS

A fresh look at the impact customer experience has on profits and how to keep the customer at the center of business decisions.

Winning on Purpose

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“How likely are you to refer [company name] to a friend or family member?”  This one question changed the face of customer satisfaction back in 2006.  

It all started with Fred Reicheld, the founder of Bain and Company’s Loyalty practice.  Reicheld wanted to know if there was a connection between happy customers and profitability.  His research revealed that, in a sea of survey questions, this one simple question was the best predictor of profitability.  This is called the “Net Promoter Score.” And companies went bonkers for the concept.  

In his new book, Winning on Purpose: The Unbeatable Strategy of Loving Customers, Fred Reicheld seeks to bring business back around to the profit power of customer experience.

The Evolution of the Net Promoter Score

It’s a simple calculation.  Ask customers to rate their likelihood of referring a company to their friends and family on a scale of 0-10.  Those who gave a rating of 9 or 10 are called promoters.  Those who gave a rating of 7-8 are passive and those who gave a rating of 0-6 are detractors.  You subtract the percentage of detractors from the percentage of promoters and voila! You have a Net Promoter Score.  The higher your Net Promoter Score, the more loyal customers you have.  The more loyal your customers are, the more profitable your company.

Unfortunately, as time went on, the spirit of the Net Promoter Score got lost.  When Bain surveyed business leaders they found that only 10% believed that the primary purpose of their firms was to maximize value for customers. 

“Many companies still operate in the old-school financial capitalist mindset in which maximizing shareholder value is front and center.” 



Bringing the Love Back to Net Promoter

If you’re already familiar with the Net Promoter Score concept, then you’ll LOVE “Winning on Purpose”.  In the early part of the book, Reicheld provides a brief history of his intention behind the Net Promoter Score.  

One thing I experienced, but hadn’t realized, was that Bain had made the entire Net Promoter Score process “open sourced”.  In other words, any business could use the calculation and the question to measure customer experience. 

The great thing about that decision was that Net Promoter Score spread like wildfire!  The not-so-great-thing is that most businesses didn’t have access to the support and expertise behind the method.

This is Reicheld’s mission with “Winning on Purpose”.  He wants to bring the LOVE back into customer experience.  



In his research, Reicheld discovered that making a referral or recommendation was really an act of love, aimed at improving the life of a friend or family member.  Good people will not enthusiastically recommend a company that they know pollutes the environment or abuses its employees…an enthusiastic recommendation probes into the heart and soul of a business and its core purpose.”

“Winning on Purpose” Puts The Focus Back on Customer Experience

In “Winning on Purpose” Reicheld takes a strong stand and commitment to use this powerful measurement tool the way it’s intended; to improve the lives of customers. He’s even introduced a new metric called “Earned Growth Rate” to support the Net Promoter Score. 

Here’s a quick journey through the book. 

The first two chapters of the book emphasize the power of having a winning purpose and how staying focused on this purpose actually leads to greatness. 



Then Reicheld goes into evangelist mode as he tries to explain the concept and benefit of “loving your customer.” If you’re a small business owner struggling to compete with larger companies pay attention to these chapters!  This is your strength! 

As companies grow, they have to add systems, processes and policies in order to create a great customer experience. Ironically, these same systems can actually create a terrible experience.  

The rest of the book delves into the structures of these systems and how an enterprise organization can take a fresh look at how they can bring a more human approach to an unwieldy system.

Small Business Lessons from “Winning on Purpose”

Don’t take your eye off serving customers. While it’s tempting to start cutting costs, your bottom line will benefit most from investing in customer experience.



Enroll teams in improving customer experience. Just because an employee doesn’t come in contact with customers, doesn’t mean that they don’t impact the experience. 

Make the customer the center of every decision. Your business grows because of your ability to meet customer’s needs in a specific and unique way. Keep your finger on the pulse of what your customers want and need – and even what they may not know they want or need.

Keep hiring and promotion contingent on customer-centered principles. This is a BIG one. No executive or employee should prosper at the expense of customer experience.

These are all good things.  I’m sure that you’ve been nodding your head in agreement as you read through this list.  But, if our actions were to be the judge of our ability to keep customer experience at the center, we’d be lacking.



Is “Winning on Purpose” too Idealistic?

As I read and digested “Winning on Purpose”, I wondered if it was too idealistic.  Clearly businesses appropriated the Net Promoter Score to suit their own needs and goals.  So much so, that Reicheld was moved to bring us back to what really mattered.

And now, larger organizations are probably paying Bain and Company hefty consulting fees to re-center around the customer again so that they can be as profitable as they can be.  

As a small business owner, you can learn from these lessons as you grow.  “Winning on Purpose” reminds me that the lesson I learned in graduate school 30 years ago is still true today; “Making money and doing the right thing are NOT mutually exclusive principles.”

Image: amazon



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Ivana Taylor Ivana Taylor is the Book Editor for Small Business Trends. She is responsible for directing the site’s book review program and manages the team of professional book reviewers. She also spearheads the annual Small Business Book Awards. Ivana publishes DIYMarketers, where she shares daily do-it-yourself marketing tips, and is co-author of "Excel for Marketing Managers."

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