The Customer Confidential Podcast
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“Love” isn’t a word you often hear in business. It seems to run counter to the calculated numbers and tedious plans crafted in many boardrooms. But in his new book Winning on Purpose: The Unbeatable Strategy of Loving Customers, Fred Reichheld, a Bain fellow and creator of the Net Promoter system of management, makes it clear: Loving your customers is the key to continued success.
“I’ve tried to define in the book what I mean by love,” Fred says. “And it’s the idea that your happiness is a result of making your partner happy. And in a good business relationship, that’s what drives success.”
Customer Love
Customer love blooms with purpose-driven leadership. Meet some of the executives inspiring their teams to lead with love.
But many business leaders believe there’s a tension between putting customer love first and growing or maintaining financial returns. While pursuing raw earnings, keeping up with the competition, or making shareholders happy, many companies turn to bad profits, ultimately decreasing value for their customers.
“It’s a tough competitive world and I’m sympathetic to that,” Fred says. “But when I look at the companies that have kicked butt competitively, it tends to be those that had the courage to say, ‘Nope, we’re just not going to do that to our customers.’”
The trade-off between doing right by your customers and pleasing shareholders is a false one, according to Fred. Instead, putting customer happiness as your purpose sparks an underlying economic flywheel, energizing your employees and keeping your customers coming back for more. It’s a strategy that isn’t measured by accounting or touted by Wall Street, but loyalty leaders intuitively understand its effectiveness.
“Love is not against the interests of shareholders. It advances their interests by putting customers at the center,” Fred says. “Loving your customers is the only way to deliver real value to your long-term investors. We’ve yet to find a company that wasn’t an NPS leader that’s delivering outstanding value.”
In this episode, a continuation of my conversation with the authors of Winning on Purpose, Fred and I discuss what it means to truly love your customers and how doing so can put your company on a path to long-term success.
Winning on Purpose: The Unbeatable Strategy of Loving Customers
This new book by Fred Reichheld, Darci Darnell, and Maureen Burns demonstrates that great leaders embrace a higher purpose to win, and Net Promoter® shines as their guiding star.
Learn more about Winning on Purpose and order a copy here.
In the following excerpt, Fred and I discuss bad profits as industry standard and some organizations that have chosen a different way forward.
Fred Reichheld: Bad profits are things you do to customers—or things that you make your employees do to your customers—that we all know are bad. They’re just selfish. Now maybe they’re necessary to stay alive and breathe for the moment or maybe you need to meet your budget. But it’s so far away from this idea of love and finding ways to dignify and honor your team by putting them in a position to do the right things for their customers.
So bad in what way? Well, it’s bad because it’s not the kind of loving treatment that you would want for yourself or for a loved one.
Rob Markey: One of the reasons that companies engage in bad profits is because very well-meaning executives believe, in their hearts, that it’s the right thing to do. Either the right thing to do because it’s the right thing to do for shareholders and they want to keep their jobs, or sometimes it’s the right thing to do because that’s what all our competitors do too. And if we don’t do that, we’re going to have a problem from an earnings perspective. We aren’t going to be as good as our competitors. So we have to follow industry practice.
Fred Reichheld: It’s a tough competitive world and I’m sympathetic to that. I’ve been out there competing in it. But I remember what my mother used to say when I would come back home and say, “Yeah, but all my friends are doing that.” It didn’t get very far.
Just because other people are doing it, doesn’t make it right. You need to have an inner standard.
Rob Markey: Well, it’s industry practice. We have to do that in order to remain competitive.
Fred Reichheld: I have heard that. But when I look at who has kicked butt competitively it tends to be the companies that had the courage to say, “Nope, we’re just not going to do that to our customers.” Enterprise Rent-A-Car: “Nope, we’re not going to mark up our gas refills three or four hundred percent. Nope, we’re not going to take these cheap second-driver fees for your spouse that is actually no cost for us.” And Southwest Airlines: “Nope, we’re not going to charge you a rebooking fee.” All these industry practices, when they’re wrong, open the door to people who have the wisdom to do it right and set themselves apart as the special company in the industry.
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