The ultimate question

24.07.2006

How so? Most companies have a hard time even categorizing their customers as promoters, passives [satisfied but unenthusiastic customers] or detractors. And many companies even struggle with knowing the level of profitability of their customers. The [goal] is to create more customers who are profitable promoters, but if you don't know how profitable your customer is, you don't know half that equation. And if you don't know if they are promoters, passives or detractors, you don't know the other half.

Sounds like a job for a good customer relationship management system. A lot of CRM systems have gone to the third level of sophistication without getting the basics. You need some basic measure of success and failure, and that's missing. You know the joke about the drunk looking for his wallet under the street lamp? He knows he lost it in the alley, but it's dark back there. Accounting systems measure what's easy to measure -- stuff like plant and equipment and depreciation -- but that's not the fundamental asset in most companies.

USAA is a good example of a company that has used IT effectively, and they have unbelievably good NPS scores -- 80 percent, and even 90 percent in their credit card business.

Could NPS be incorporated into accounting systems, like plant, equipment and depreciation are? My goal is to have every public company report a net promoter score that is audited and verified just as carefully as auditors now look at profits.

Do the sinners use IT to sin? You can invest in very sophisticated CRM systems that bilk customers or manipulate them. Take the airline yield management systems -- very complex pricing systems that basically take every possible penny out of the customer's wallet. So you don't have successful airlines; you have bankrupt airlines. It looks like the right thing to do, because why should you leave money on the table? But it turns out that the airlines that are not doing that stuff are the ones that are prospering. You can put in a lot of IT to pick your customers' pockets, but over time, they'll stop doing business with you.