You probably wouldn't bug your landlord about a loose doorknob, as long as you could still get the door to open. But wouldn't it be great if the landlord occasionally asked you whether any minor issues needed fixing -- and then fixed them?
BlackLine Systems -- a $40 million, 160-employee accounting software company -- has become something like a proactive landlord. And it's earned flattering customer testimonials and new business as a result.
Before you accuse us of boosterism, be warned: We have statistical evidence to support our claim, in the form of BlackLine's Net Promoter Score. NPS is "perhaps the best-known customer-loyalty tool around today, based on the entirely sound principle that the more customer promotersyou have (i.e., customers who say on surveys that they're highly likely to refer you to a colleague or friend), the more likely you'll be to grow your business and outpace the competition," writes customer-engagement expert Bill Lee for the HBR Blog Network.
Measuring a company's NPS is common, but few companies go beyond that, Lee notes. "That's because the focus of NPS is on creating promoters, but stops short of engaging them to actually promote the business through activities like referrals, references, blogging or tweeting, speaking at industry events, or any of the myriad ways that passionate customers can help build businesses these days."
BlackLine Systems--whose clients include AT&T, Boeing, Southwest Airlines, Northrop Grumman, and Whirlpool -- is an exception to Lee's general rule.
How? Founder and CEO Therese Tucker noticed that customers were experiencing minor problems with the software but often failed to mention them until renewal or upgrade time rolled around, at which point a customer would say, "By the way..." and BlackLine would finally be alerted. Tucker's solution was to launch a "WhiteGlove" program, providing all customers with a free, eight-hour consultation at any point after the formal implementation is finished.
It's the equivalent of a bicycle shop offering a free "whenever" tune-up to anyone who buys a new bike. The result? BlackLine's overall NPS doubled from 2010 to 2013, which corresponds to the availability of the WhiteGlove program. Currently, BlackLine's support team has a NPS of 78 percent, and the account management team is at 85 percent. (Software companies average 46 percent; technology companies in general, 37 percent.)
That boost corresponds to increased revenues from existing customers. Following its participation in the WhiteGlove program, Southwest Airlines upgraded its 52 licenses, from BlackLine's basic offering to its full-service SaaS (software-as-a-service) option--and is singing the company's praises.
"Now we don't spend as much time trying to track things down for [our accounting firm]" Vicki Evertson, a Southwest finance manager, tells The Build Network. "That saves time and reduces audit fees."
In another post for the HBR Blog Network, "The Big Goal Behind All That Customer Data," Lee (@bill_lee) makes a related point about customer value: It can be tempting to measure customers strictly by how their purchases improve your bottom line, but you need to account for their value as a promoter, too. In one case, Lee identifies a customer whose "referral and influencer value" -- after factoring in the revenues generated by her referrals and positive word of mouth -- is worth nearly 14 times her value as strictly a purchaser.
Location: Los Angeles, Calif.
Year Founded: 2001
2013 Head Count: 113
2012 Revenue: $25.1 Million