This post was originally published on LinkedIn.
I serve on the board of Rackspace, a young entrepreneurial company in the fiercely competitive cloud computing and managed hosting business.
When Rackspace first approached me about serving on the board, I had never heard of the company. But an old business school professor of mine had. He lit up when I told him about the offer, noting that Rackspace had the lowest customer churn rate in its industry.
That got my attention.
Rackspace is a great example of a company that keeps customer churn low and loyalty high by using a Net Promoter system. In Rackspace's case, it uses the system to measure and manage what it calls the "Fanatical Support" it offers customers.
"The goal of Fanatical Support is to create customers who are promoters," explains CEO Lanham Napier. "Promoters recommend us to their friends, becoming an extension of our salesforce. Customers who are promoters are also more profitable, staying with us longer and buying more of our services…. The creation of loyal promoters not only reduces customer acquisition costs, it improves retention rates and inspires our Rackers [employees]."
Companies from a range of industries, including Verizon Wireless, Virgin Media, Zappos, American Express and others, use Net Promoter systems to reduce churn and build loyalty, as my colleague Rob Markey and I explain in our book, The Ultimate Question 2.0. To see what a Net Promoter system looks like in action, check out this video.