Fred Reichheld | |
|---|---|
 | |
| Born | 1952  |
Frederick F. Reichheld (born 1952, Cleveland, US) is an American New York Times best-selling author, speaker and business strategist. He is best known for his research and writing on the loyalty business model and loyalty marketing. He is the creator of the Net Promoter System of management (NPS).
Reichheld graduated with a B.A. from Harvard College (1974) and an MBA from Harvard Business School (1978).[ citation needed ]
Reichheld is a Fellow of the management consultancy Bain & Company, where he has worked since 1977. In 2003, Consulting Magazine named him one of the world's top 25 consultants. [1] According to The New York Times, he "put loyalty economics on the map." The Economist magazine called him "the high priest of the loyalty cult" in 2001. [2] [ failed verification ]
His books include The Loyalty Effect (1996), Loyalty Rules! (2001), and The Ultimate Question: Driving Good Profits and True Growth (2006). He has authored articles for business publications, including eight for the Harvard Business Review . He speaks on loyalty and other business topics at management conferences and similar events. [3] His work on loyalty has been covered in The Wall Street Journal, New York Times, Financial Times, Fortune, Business Week and The Economist.
His 2011 book, The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World, was a New York Times Bestseller [4] and co-authored by long-time collaborator, Rob Markey of Bain & Company. [5] An updated and expanded version of his 2006 book, The Ultimate Question, it focuses on Net Promoter Score (NPS), a concept he developed based on his research in measuring customer satisfaction, customer retention and its link to revenue growth and profitability. [6] This metric serves as an indicator of the loyalty and advocacy customers show for a company. In this new version of the book, Reichheld renames NPS the "Net Promoter system" to emphasize elements of the approach beyond the metric.
In 2021, Reichheld published a new book entitled "Winning on Purpose", along with two co-authors Darci Darnell and Maureen Burns. Topics include Net Promoter 3.0, and Fred's latest invention, called "Earned Growth", described as an accounting-based twin for Net Promoter Score.
The origins of NPS go back to a 2003 Harvard Business Review article by Reichheld titled "The Only Number You Need to Grow". [7] [8] [9] Fred Reichheld owns the registered trademark NPS together with Bain & Company and Satmetrix. [10] The popularity and widespread use of NPS is attributed to its simple and transparent methodology. [11]
NPS involves dividing respondents into "promoters" who give scores of 9 or 10, "passives" who give scores of 7 or 8, and "detractors" who give scores of 6 or below. [12] [13] The net promoter score is the result of a calculation that involves subtracting the percentage of detractors from the percentage of promoters collected through the survey item. The result of the calculation is usually expressed as a whole number rather than as a percentage. Substance How likely it is that you would recommend ... the question is almost always accompanied by an open-ended "Why?" and sometimes by so-called "drive" questions. [14]
NPS is commonly interpreted and used as a measure of customer loyalty. [15] It has been argued that in some cases it correlates with revenue growth relative to competitors in the industry, [16] although it has also been demonstrated that NPS performance varies significantly across industries. NPS has been widely adopted by Fortune 500 companies and other organizations. [17]
Relationship marketing is a form of marketing developed from direct response marketing campaigns that emphasizes customer retention and satisfaction rather than sales transactions. It differentiates from other forms of marketing in that it recognises the long-term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages. With the growth of the Internet and mobile platforms, relationship marketing has continued to evolve as technology opens more collaborative and social communication channels such as tools for managing relationships with customers that go beyond demographics and customer service data collection. Relationship marketing extends to include inbound marketing, a combination of search optimization and strategic content, public relations, social media and application development.
The loyalty business model is a business model used in strategic management in which company resources are employed so as to increase the loyalty of customers and other stakeholders in the expectation that corporate objectives will be met or surpassed. A typical example of this type of model is: quality of product or service leads to customer satisfaction, which leads to customer loyalty, which leads to profitability.
In marketing and consumer behaviour, brand loyalty describes a consumer's persistent positive feelings towards a familiar brand and their dedication to purchasing the brand's products and/or services repeatedly regardless of deficiencies, a competitor's actions, or changes in the market environment. It can also be demonstrated with other behaviors such as positive word-of-mouth advocacy. Corporate brand loyalty is where an individual buys products from the same manufacturer repeatedly and without wavering, rather than from other suppliers. Loyalty implies dedication and should not be confused with habit, its less-than-emotional engagement and commitment. Businesses whose financial and ethical values rest in large part on their brand loyalty are said to use the loyalty business model.
In management, business value is an informal term that includes all forms of value that determine the health and well-being of the firm in the long run. Business value expands concept of value of the firm beyond economic value to include other forms of value such as employee value, customer value, supplier value, channel partner value, alliance partner value, managerial value, and societal value. Many of these forms of value are not directly measured in monetary terms. According to the Project Management Institute, business value is the "net quantifiable benefit derived from a business endeavor that may be tangible, intangible, or both."
The Loyalty Effect is a 1996 book by Fred Reichheld of the consulting firm Bain & Company, and the book's title is also sometimes used to refer to the broader loyalty business model as a whole. Reichheld's book was exceptionally popular with marketing and customer relationship management professionals, and as such the phrase "loyalty effect" has become synonymous in some circles with the more generic concepts covered by the loyalty business model.
Customer satisfaction is a term frequently used in marketing to evaluate customer experience. It is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals." Enhancing customer satisfaction and fostering customer loyalty are pivotal for businesses, given the significant importance of improving the balance between customer attitudes before and after the consumption process.
Net promoter score (NPS) is a market research metric that is based on a single survey question asking respondents to rate the likelihood that they would recommend a company, product, or a service to a friend or colleague. The NPS is a proprietary instrument developed by Fred Reichheld, who owns the registered NPS trademark in conjunction with Bain & Company and Satmetrix. Its popularity and broad use have been attributed to its simplicity and transparent methodology.
Loyalty marketing is a marketing strategy in which a company focuses on growing and retaining existing customers through incentives. Branding, product marketing, and loyalty marketing all form part of the customer proposition – the subjective assessment by the customer of whether to purchase a brand or not based on the integrated combination of the value they receive from each of these marketing disciplines.
Share of wallet (SOW) is a survey method used in performance management that helps managers understand the amount of business a company gets from specific customers.
Claes Fornell is an expert on customer satisfaction analytics and capital asset management.
Customer retention refers to the ability of a company or product to retain its customers over some specified period. High customer retention means customers of the product or business tend to return to, continue to buy or in some other way not defect to another product or business, or to non-use entirely. Selling organizations generally attempt to reduce customer defections. Customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship and successful retention efforts take this entire lifecycle into account. A company's ability to attract and retain new customers is related not only to its product or services, but also to the way it services its existing customers, the value the customers actually perceive as a result of utilizing the solutions, and the reputation it creates within and across the marketplace.
Customer experience, sometimes abbreviated to CX, is the totality of cognitive, affective, sensory, and behavioral customer responses during all stages of the consumption process including pre-purchase, consumption, and post-purchase stages.
The Advocacy Index is a customer survey technique developed by VIRTUATel Ltd that is conducted over the telephone. The technique measures customer loyalty using a 3-point scale and is based on the Net Promoter Score (NPS) methodology developed by Fred Reichheld.
The consumer leverage ratio is the ratio of total household debt to disposable personal income. In the United States these are reported, respectively, by the Federal Reserve and the Bureau of Economic Analysis of the US Department of Commerce.
Customer advocacy is a specialized form of customer service in which companies focus on what is deemed to be best for the customer. It is a change in a company's culture that is supported by customer-focused customer service and marketing techniques.
Bain & Company is an American management consulting company headquartered in Boston, Massachusetts. The firm provides advice to public, private, and non-profit organizations. One of the Big Three management consultancies, Bain & Company was founded in 1973 by former Group Vice President of Boston Consulting Group Bill Bain and his colleagues, including Patrick F. Graham. In the late 1970s and early 1980s, the firm grew rapidly. Bill Bain later spun off the alternative investment business into Bain Capital in 1984 and appointed Mitt Romney as its first CEO. Bain experienced several setbacks and financial troubles from 1987 to the early 1990s. Romney and Orit Gadiesh are credited with returning the firm to profitability and growth in their sequential roles as the firm's CEO and chairman respectively.
Willingness to recommend is a metric related to customer satisfaction. When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This willingness to recommend can be a powerful marketing advantage. In a survey of nearly 200 senior marketing managers, 57 percent responded that they found the "willingness to recommend" metric very useful.
Customer delight means surprising a customer by exceeding their expectations and thus creating a positive emotional reaction. This emotional reaction leads to word of mouth. Customer delight directly affects the sales and profitability of a company, as it helps to distinguish the company and its products and services from the competition. In the past customer satisfaction has been seen as a key performance indicator. Customer satisfaction measures the extent to which the expectations of a customer are met. However, it has been discovered that mere customer satisfaction does not create brand loyalty nor does it encourage positive word of mouth.
Rob Markey is an American author, speaker, and business strategist. Often referred to as the Vince Lombardi of Customer Loyalty, he is perhaps best known for his research and writing on customer experience and loyalty marketing. Markey is also the co-creator of the Net Promoter System of management (NPS), along with fellow Bain & Company consultant Fred Reichheld.
A feedback terminal is a physical device that is commonly used to collect large amounts of anonymous real-time feedback from customers, employees, travelers, visitors or students. Typically, feedback terminals feature buttons that users can press to indicate how satisfied they are with the service provided. This information can then be used by organisations to analyze where the experience is optimal, and where it can be improved.
| International | |
|---|---|
| National | |
| Academics | |
| Other | |