The world’s ‘winning companies’ – those that truly make the world a better place – deliver 2-3 times the average stock market returns and offer fulfilling work for their employees-often have one thing in common: they put their customers first, ahead of all other stakeholders, according to Fred Reichheld, creator of the Net Promoter Score.
Many of these top companies are adept practitioners of Bain & Company’s widely used Net Promoter Score, a metric for tracking customer loyalty, which is based on the idea that if a company treats you right, you come back – and you tell your friends and family.
Bain & Company has published a new book, entitled ‘Winning on Purpose: The Unbeatable Strategy of Loving Customers’, co-written by Darci Darnell, Maureen Burns and Fred Reichheld. This book provides convincing evidence that customer capitalism allows all stakeholders to win while building a sustainable future.
In Winning on Purpose, the authors detail why businesses should make enriching the lives of customers their primary purpose, irrefutably proving that this is the best way of ensuring sustainable growth, happily fulfilled employees and robust investor returns.
The book also unveils two of Bain’s new innovations: Net Promoter 3.0, which has been updated to meet today’s current business and social environment, and Earned Growth, an accounting-based twin for NPS.
“Dissatisfaction is surging against traditional capitalism,” said Reichheld. “It has become critical for businesses to move away from financial capitalism, which is focused primarily on profits, and stakeholder capitalism, which ultimately doesn’t satisfy anyone, to customer capitalism, which makes enriching the lives of customers a top priority. That’s proven to be the best way to ensure robust, sustainable results for all stakeholders.”
Through a mix of personal stories, customer and employee experiences along with CEO and investor insights, the authors share:
- How NPS feedback from millions of customers has revealed that the previously invisible forces of love and loyalty drive business success-and how traditional financial metrics orient companies toward greed and self-interest. NPS illuminates which companies are on the path to greatness and can sustainably provide the best experiences for customers, the most rewarding jobs for employees and the highest returns for investors.
- Why most NPS practitioners achieve just a small fraction of the system’s potential, and how leading practitioners use it as a moral compass to ensure people are treated right. Companies and case studies cover a range of sizes and industries, from T-Mobile, Apple and Amazon to Vanguard, Discover, USAA and FirstService, and digital revolutionaries such as Airbnb, Warby Parker, Tesla and Peloton.
- The Revolutionary Earned Growth Rate, which provides the accounting twin to complement NPS, ensuring firms earn “good profits”-generated when loyal consumers come back for more and bring their friends-and why EGR should be included in audited financial statements. This is critical not only for customers, boards and investors, but also for employees to make informed decisions about where to work.
- How to fight the Great Resignation by empowering employees to serve customers and hear how they did. The best companies know that the human touch is a key competitive differentiator for customer satisfaction and retention. And that for employees, the freedom to serve customers with empathy and creativity is the best path to extraordinary teams.
- The F.R.E.D. Stock Index, which tracks total shareholder returnfor companies that achieve their industry’s highest NPS. Not only are these companies customer-love winners; they consistently beat the stock market, with annual returns of more than 26% – almost triple the stock market average over the past decade.
