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In 2002, Fred Reichheld re-defined marketing and customer loyalty by quantifying the scope of business through referrals with the Net Promoter Score (NPS). In 2021, Reichheld introduced an upgrade to NPS in his latest book, Winning on Purpose: The Unbeatable Strategy of Loving Customers. Here he also introduced a new approach he refers to as Customer Capitalism that could alter the principle of business as we know it.

In this guide, we encapsulate the ideas and principles Reichheld showcases in Winning on Purpose, and provide a practical roadmap on how to effectively adopt a Customer Capitalism approach in your business and marketing strategy.

The Need for NPS 3.0

Reichheld’s book concurs that, although the global acceptance of the original NPS framework is phenomenal, the implementation is disappointing. Many NPS practitioners are corrupting the system by making the score a target rather than a measure that inspires learning and growth. Reichheld suspects more than 90% of the NPS scores reported today result from unmasked self-administered surveys triggered by specific transactions, which may be very useful for internal management purposes but have little relevance to competitive relationship benchmark scores.

Contrary to popular belief, the central component of the original NPS isn’t just a specific metric based on survey questions that inquire about the likelihood to recommend. Originally, Reichheld considered the name ‘Net Lives Enriched’ for the popular framework because NPS is essentially a philosophy built on the idea that our success should be measured by our impact on customers.

NPS-1
NPS-2

In Winning on Purpose, Reichheld revives and reinvents the old NPS framework with NPS 3.0. and provides an NPS 3.0 checklist (page 285) that enables businesses to focus on enriching and elevating the lives of their customers. He also provides a list of barriers (page 174) that business leaders need to overcome to unleash the power of the golden rule.

Customer Capitalism—the Way of the Future

Reichheld believes the golden rule of ‘love thy neighbors as thyself’ should not be limited to interpersonal relationships but must also be extended to business transactions. With the golden rule as the foundation, Reichheld introduces the concept of Customer Capitalism. Using empirical evidence depicting the decline of financial capitalism, Customer Capitalism is the way of the future.

Great companies help people lead great lives—they are a force for good. Great leaders build and sustain such communities. They inspire team members to forge lives of meaning and purpose through service to others—service not merely satisfactory but so thoughtful, creative, and caring that it delights customers and enriches their lives.


Fred Reichheld on the Customer Capitalism Manifesto

Customer Capitalists focus on the vital role of kindness, generosity, and love in dealing with customers as well as employees. It holds business leaders and their teams accountable. Customer Capitalism dictates that the primary mission of every organization striving for greatness should be to build a community whose purpose is to sustainably enrich the lives of customers and where all members are treated in accordance with (and are held accountable to) the golden rule. This ideology emphasizes that, although great organizations are built on great principles, these principles don’t effectively govern daily decisions. Customer Capitalists clearly comprehend the natural currents pushing their teams downstream, so they can develop practical systems that help make it easy for teams to do the right thing and hard for them to do the wrong thing.

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