As it turns out, doing good truly is good business as measured by Net Promoter Score (NPS) developer Fred Reichheld, who took a deep dive on his customer experience measure Wednesday at the 2022 Co-op THINK Conference in Chicago.
NPS is calculated on a 0-10 scale based on a single question: How likely are you to recommend us to a friend?
Reichheld says he founded the measurement on the golden rule: Treat others as you would like to be treated.
By Reichheld’s reckoning, good business is nothing less than an act of love. “The right way to run a business is the way you would want a loved one treated.”
He further explains the Golden Rule is the touchstone of virtually every culture and spiritual practice.
“It works everywhere,” says Reichheld, founder of Bain Loyalty Practice. “If you think the purpose of your business is to enrich people’s lives, then you have to measure it.”
Unfortunately, in the widespread adoption of the NPS many companies have adopted a strategy of trading or begging for scores from customers.
“They just don’t get it,” Reichheld says. “They are not living this golden rule idea. The companies that live these ideals are the ones that achieve the remarkable benefits.”
Those benefits are not measured by traditional accounting standards, he says. “Accountants don’t measure it, but it just happens to be the most impactful thing in your business results: return customers.”
He cites low returns by Wall Street firms that put investors first, contrasting their results with firms that put consumers first, such as Apple and Enterprise. Reichheld called this investing style “consumer capitalism.”
“What drives cash flow is the customers who come back and bring their friends,” Reichheld says.
Reichheld says credit unions should be excited about their role in the NPS universe. “Credit unions have the right heart and the right purpose. You are structured the right way to deliver the best NPS per episode.”