This article originally appeared on LinkedIn.
The question has been asked on Capitol Hill and on the presidential campaign trail, by lawyers for the Department of Justice and by Federal Trade Commission administrators, with increasing frequency and rising urgency.
Should big tech be broken up?
Answer yes and you’re likely to argue that competition, innovation, and customers will all benefit from using the antitrust laws to shrink tech giants—particularly platform companies. Answer no and you may be focused on the fact that many of the issues bothering consumers these days—starting with data privacy—have no precedent in laws written a century ago.
Antitrust regulation aims to promote competition for the benefit of consumers, but some of the moves that critics cite as predatory today, such as Amazon’s purchase of Whole Foods, are complicated. In the case of Whole Foods, Amazon ownership has actually lowered the cost of some items, a boon to consumers, as a recent story in Wired magazine notes.
Customers sometimes need government protection. The question today is whether that requires breaking up some of our era’s most successful companies.
Here’s a proposal: Why not listen to their customers?
If enough customers are so happy with the way they are treated that they enthusiastically recommend a company to their friends, then I’d argue the case for antitrust action is weaker. Sure, survey metrics can sometimes be manipulated—think car dealers begging for 10s on their performance evaluations. But a reliable third-party scan across industry competitors can yield a solid picture of which customers are feeling the love, and which are not.
Competitors and critics can spin up lots of current and potential threats, but when I hear these antitrust complaints aimed at Amazon and Apple, I temper them with the recognition that these firms continue to earn some of the highest Net Promoter Scores® on the planet.
In telecom, T-Mobile is the NPS® leader. This month T-Mobile and Sprint went to court to defend their proposed merger against a challenge from some state attorneys general objecting based on antitrust concerns. They worry the merger will result in higher mobile phone costs for consumers.
But what if it results in happier customers? Since 2013, T-Mobile has taken one pro-customer step after another. First, they did away with contracts and created simple rate plans, including for families. Then they offered free phone trials, free music streaming and free in-flight calling. They simplified plans for business customers, created a simple unlimited data plan for all devices and, most recently, began to offer rebates for lower data usage.
Customers love it and award T-Mobile a Net Promoter Score more than 50% better than its nearest rival’s. Shareholders too have been rewarded, with returns over the past five years far exceeding those of its key competitors. Treating more people to these customer-friendly policies could be a very good thing. Of course, there may be good reasons to block this merger. Might it, for example, threaten or impair the culture and business systems that enabled T-Mobile to build such high levels of customer advocacy? But to have sufficient weight to block a merger, those reasons should be good enough to outweigh the fact that customers seem to love the experience of doing business with the company.
I don’t know how the court will rule, but I do think that for anyone concerned with anticompetitive behavior, it’s worth digging into the valuable information now available on customers and their feedback.
Today we have sophisticated ways of capturing information about customer satisfaction. As my Bain colleague Rob Markey writes in the current edition of Harvard Business Review, companies today can track data in detail and at scale on all kinds of operational measures. Combined with qualitative data, such as customer feedback scores and comments, this data helps us better understand how happy customers are. Indeed, it is now possible, and desirable, for companies to track and report their customer value alongside other creators of enterprise value in their financial statements. And a few leading companies have begun to do so.
Why shouldn’t regulators and elected officials take advantage of these important developments? Why don’t regulators set standards for reporting customer scores to investors and to the public? Ensuring honest, audit-worthy information seems like a good role for government. We have regulators to thank for the fact that credit cards and mortgage companies report and calculate interest rates on an apples-to-apples basis. We should have the same confidence when we want to compare Net Promoter Scores or some other measure of customer happiness.
Large and powerful companies deserve scrutiny because they can indeed abuse that power. Happy customers represent one strong argument for large companies facing challenges of antitrust action. And for that reason, these firms should be among the loudest advocates for uniform reporting of accredited Net Promoter Scores.
Net Promoter®, Net Promoter System®, Net Promoter Score® and NPS® are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.