Friday, November 6, 2009

Happiness is the Key to a Successful Business

More than 40 years ago, a classic episode of The Flintstones featured a segment that was ahead of its time. Fred's wife, Wilma, stars on a television program and sings the Rockenspiel jingle. Those who remember this episode will recall that the song instructs wives to make their hubby happy.

     Even the creators of those stone-age characters realized that happiness is crucial to business growth. Entrepreneurs across the business spectrum share common goals in their desire to secure their profitable share of the market. That which divides business leaders in their quest is the method of how to constantly reach those goals. Believe it or not, some of the greatest business success stories have discovered that happiness is the key factor to continued growth.

     Of course, one might argue that happiness is an intangible factor that cannot be measured.  The truth, though, is that happiness can be measured. More than 30 years ago, a consultant named Fred Reichheld created a measuring system called the Net Promoter Score (NPS). The method is quite simple. After completing a sale or service, the customer is asked to rate the likelihood of their recommending the company to a friend or colleague. Low scores (detractors) are subtracted from the high scores (promoters) and passives (mid-range scores) are left out of the equation. The result is the Net Promoter Score.

     According to Mr. Reichheld's studies, world class companies scored an NPS of 20 – 50. Some score much higher. The more aggressive companies measure their NPS daily and analyze results to look for patterns of what makes their customers happy. By repeating those patterns, they can keep customer happiness high and continue their success. Conversely, they can also track the issues that bother customers and try to eliminate those unhappiness factors.

     Remember, a happy customer is a loyal customer, and a loyal customer is repeat business and recommendations.