The Learning Leader Show With Ryan Hawk - 446: Fred Reichheld - Asking The Right Questions, Loving Your Customers, & Living A Meaningful Life

Duration: 1h 2m
Broadcast on: 14 Nov 2021
Audio Format: other

Text LEARNERS to 44222 to read my new book, The Pursuit of Excellence, early.

Full show notes at www.LearningLeader.com

Twitter/IG: @RyanHawk12 https://twitter.com/RyanHawk12

red Reichheld is the creator of the Net Promoter Score system of management. Also known as "NPS." NPS is used in two-thirds of Fortune 500 companies. Fred has worked at Bain and Company since 1977. He is also the best-selling author of five books, including his most recent, "Winning On Purpose." Fred graduated with Honors both from Harvard College (B.A., 1974) and Harvard Business School (M.B.A., 1978).

Notes:

The ultimate question: "How likely are you to recommend this brand to a friend or colleague?"
Fred views "Net Promoter Score" as "Net Lives Enriched."
"At Bain, we came to realize through our own experience that the frontline team leader sets the tone, models the values, sets the priorities, and balances individual needs with team needs. Given this critical importance, we select leaders with great care and invest heavily in their training and coaching."
The difference between good profits and bad profits. Play the long game. It's not helpful to earn a profit from someone who had a bad experience.
Negotiation - Try to give the other person as much as possible. The story of the Costco CEO sharing the extra profits with others... Think about how you can do this in your negotiations with family, friends, and work colleagues.
- The Costco leaders always think of how they can put they can love on their customers
How can you turn someone from a detractor to a promoter?
- Pleasantly surprise your customer
  - The Certa Pro Painters example - They train their teams to seek out opportunities for acts of kindness. For example, when they are on a ladder up high painting a wall and notice a light bulb is out, they will put in a new light bulb (for free). They go out of their way to surprise and delight their customers.
Richard is a big believer in the golden rule: Treat others as a loved one should be treated. When customers feel loved, they come back, and they tell all of their friends.
- "You want a workforce that is inspired to treat others as loved ones."
- "The leader's job is to love their team."
Front line leaders -- Make sure you're constantly getting feedback.
Dr. Martin Luther King Jr. - "Everyone can be great because everyone can serve."
Earned growth rate - Warby Parker - 90% of their business through referrals
Joe Girard - The top-selling car sales professional of all time - "I hope you get a lemon." "What! Why would you want me to get a bad car?" "Because then I get a chance to show off. I will give you the best customer service experience of your life. And after I do that, you'll buy cars from me for the rest of your life. And you'll tell all of your friends and family to do the same."
Good profits - Earn from promoters
Bad profits - Profits from detractors
- "You don't deserve profits unless the customer is happy."
"Where there is individual accountability, things get done. Measure is another magic word: what gets measured creates accountability. With no standard, reliable metric for customer relationships, employees can't be held accountable for them and so overlook their importance."
"These companies manage to balance the need for profits with the overarching vision of providing great results for customers and an inspiring mission for employees."
How to sustain excellence?
- Think of NPS as your moral compass
- Great leaders create a community by living the golden rule
- Enrich the lives you're responsible for
Life advice:
- Your WHO - The people you spend your life with are everything
- Only invest in places where you can bring something of value

Before we get to this conversation, I have an ask of you and that is I ask that you pre-order my next book, The Pursuit of Excellence. It comes out in January of 2022 and it would mean a lot to me if you would go to Amazon or learningleader.com and pre-order The Pursuit of Excellence. Now, I've received the question, "Man, why does it matter if you pre-order? Can I just wait till it comes out or maybe a month or two later or I'll download it on Kindle, listen on Audible?" I completely get it and I've said the same things. The reason that pre-orders are so important is because it sends a very clear message to my publisher McGraw-Hill, "Yes, you've placed a bet on this guy. Now, you should double and triple down on that bet. I want their eyes to get wide at the number of pre-orders that we have coming in, that the learning leader army of people have said, "Yes, we support this mission, this pursuit of excellence. I'm on that pursuit of excellence." And part of that is going to be pre-ordering and then reading and then instilling what I've learned from this book into my life. If you've gotten value out of the learning leader show over the past six or seven years, I am certain you will get value out of this book, The Pursuit of Excellence. I've greatly enjoyed distilling down the best of the best from all of my interviews, both the ones that have been published on this podcast and conversations I've had outside of it, to make it the most useful and impactful, as well as the most practical for you to apply it to your life. So please, I'd love it if you would go to Amazon and pre-order The Pursuit of Excellence. Go to learningleader.com, pre-order The Pursuit of Excellence. It would mean the world to me. Thank you so, so much.

Welcome to The Learning Leader Show presented by Insight Global. I am your host, Ryan Hawk. Thank you so much for being here. Text learners to 44222 to become part of Mindful Monday, you along with tens of thousands of other learning leaders from all over the world. We'll receive a carefully curated email from me each Monday morning to help you start your week off right. You'll also receive details about my upcoming book, The Pursuit of Excellence, which comes out soon, and you'll have the opportunity to be part of the book launch team if you text learners to 44222. Now, on to tonight's feature, we are a great one. It's Fred Reichhel, the creator of the Net Promoter Score System of Management, also known as NPS. NPS is used in two-thirds of Fortune 500 companies. Fred has worked at Bain & Company since 1977. He is also the best-selling author of five books, including his most recent Winning on Purpose. A few of the topics we discussed, the most useful question to ask all of your customers. And then Fred's definition of the Golden Rule and why it could be helpful for you to think as he does, and then how to be a better negotiator and why it could be better for you to not get the best possible deal every time. Ladies and gentlemen, this is a great one. It's Fred Reichhel. Fred, great to have you here on The Learning Leaders Show. Welcome. Thank you, Ryan. Good to be here. So, you invented the Net Promoter Score, I believe almost 20 years ago, and I know this personally because I've used it at more than one company where I've worked, and really appreciate what it provides. First, could you explain what it is, as well as why it's so important to be revisited now? Yeah, I invented Net Promoter as a way to help companies measure what I consider their core purpose in reaching the lives of customers. And we used to look at statistics like retention rates and customer satisfaction scores that they really didn't get the job done. And so, I was originally going to call this net lives enriched, you know, of all the lives you touch, how many enriched, how many are diminished. And that balance sheet becomes relevant, not just the company, not just to the team, but to an individual who cares about leading a life of meaning and purpose. And that's where it came from. So, what, why do you think it's a good time to revisit it now? Part of it is you have a new book called Winning on Purpose, which we're going to talk about, but, but this is, I think it's being brought back up and seems to be timely. And I think the reason to revisit it now is that, while it is had extraordinary adoption, Fortune magazine just reported that over two thirds of the Fortune 1000 use Net Promoter, which is a wonderful victory in some ways, but, but I think the vast majority of people who use it, misuse, under use it misuse it abuse it, and unintentionally of course, but so many people have changed this away from lives enriched to this is a score I'm going to hold people accountable to and if they slip below some level I'm going to fire them or or dock their bonus. And as a result, a survey based score is just totally inappropriate for this purpose and cost frontline employees feel like well I guess I need to care about the score, not about whether I'm loving customers and learning from their feedback. And I make sure they give me a 10 so, after I'm done with my transaction I, I say things like, you know, only a 10 is a passing grade at our company, or, you know, please be sure to give me the top, even if there's something we want to talk about later. I really need this score to keep my job and that debases the score it, it's uninspiring to employees and it basically screws up the system. You explained the, the question that goes with the system and the whole scoring component and what it means to be a promoter versus not. Sure. Yeah, we value customers time so one question with one verbatim follow up is, is the classic score or net promoter process. How likely you'd recommend us to a friend is the core question. It gets at this idea of recommending, which is an act of love, it means that you had such a life enriching experience that you want to share that with someone you care about a friend or a colleague. And it's a high standard. And if you've achieved it, you know, the next question is why can you tell us a little bit about why you feel that way and how we might improve our work for you. And that open text verbatim lets people understand why they have either enriched a life or diminished it, and they can call that customer and start to understand how to, how to fix that or, in the case of a great success, how to make sure they repeat it. Do it, do it more often. And, and then you come out with a score and, and so zero through 10, then this, you know, everyone argues about, oh, we should have a one through seven score and market researchers are going crazy over one up and zero through 10. In my experience is the universal scale. Everyone around the world knows when I say that is a 10. They know it's a standing ovation. And if I say it's a zero, they know that's horrible. I don't need to put flags or define those ends of the spectrum. One, one through 10 is not so good because sometimes number one is your excellent and and aces can be high aces can be low zero through 10 is the most frictionless universally understood scale. It also makes it possible to differentiate. Great from okay. Yeah, and when you squeeze down to the five star system or thumbs up thumbs down. You know how to catch the problems, but you really can't tell the no, no problem from the awesome remarkable experience I have to share this with all my best friends that you mentioned earlier that two thirds of the fortune 500 use nps net promoter promoter score. Who are some that are at the with the zero through 10 ranking. Who are some that are either at or closest to the 10 the companies that maybe we've heard of it as well as why you think those companies arrive at that point. Yeah, the interesting thing is no company is getting 100% tens. So everyone has room to improve and one of the nice things about net promoter is it keeps people humble and can keep focusing on there is room for us to get better we do not want to diminish lives. So when we take net promoter score, how likely you'd recommend us zero through 10. We take the nines and the tens which we call promoters. Those are the customers that are coming back for more bringing their friends, building your reputation, making employees proud to work there. Those are those are promoters the assets subtract the liabilities the detractors zero through six, and the net score is simply taking of all the people you touch how many promoters minus detractors as a percentage. The very best companies in the world are operating at 60 70 80 even 90% net promoter scores were 100 is theoretical perfection. The companies that come to mind you know apple is still a superstar in net promoter, and was one of the earlier adop earliest adopters. So much of what I've put into net promoter 3.0 are watching companies like apple meld and shape mold net promoter into something that works in their culture.

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