This leads to the creation of a net promoter score, which is the percentage of customers who are promoters minus the percentage who are detractors. "Once you know where your constituents sit on this scale you can take steps to increase promoters and decrease detractors," he says.
Variations in net-promoter scores between companies can be clearly seen, Markey says, with market-leading companies such as Apple Inc, Amazon.com Inc and Costco Wholesale Corp having scores of about 80 percent compared with mid-market firms' scores of 10 to 20 percent.
Overall, net-promoter score leaders in the US (companies with the highest scores in their category) grow at more than double the rate of average companies, Markey says. And while only 9 percent of US companies surveyed by Bain & Co have registered sustained profitable growth of more than 5 percent over the past decade, those 9 percent have net-promoter scores 2.3 times those of industry averages.
Han Weiwen, a partner at Bain & Co, says the net-promoter score is about changing a company's culture.
Three or four years after Bain & Co started compiling and disseminating scores, customers began telling it that they might be wrong, he says.
"There are some specific indexes and some technical skills for it, but the whole net-provider score involves a system that should be understood more from the cultural angle."
Using the system demands three key elements, he says.
"They need to systematically categorize customers into promoters and detractors to produce a net score that monitors the quality of customer relationships and communicate this throughout the organization."
Second, they should create what he calls a closed-loop learning and improvement process to increase promoters and reduce detractors at an operational level. By this he means a company should investigate the source of bad customer relations and put things right.
Commonly, companies collect customer feedback and react to it several months later, Markey says, and this is ineffective in tackling problems that may exist.
When a company gets customer feedback, it should send it to employees quickly and ask them to take prompt action to solve the problems, which would strengthen ties with customers, he says.
Third, companies should treat creating more promoters and fewer detractors as a critical mission at board level. Developing loyal relationships with customers is critical to the strategy, he says.
To achieve these three elements is part of a wider process of change, he says, of which the net-promoter score is just a part.
Markey says the score helps a company understand its market position, unlike much market research that is often not focused on an outcome. It helps companies to "listen to their customers" effectively and act upon the information they receive efficiently. The net-promoter score system is suitable for companies of any size, Han says. "In small companies, many things are incomplete, so it will be easy to do something new and change direction, which for big companies could be difficult."
Net promoter scores can also be useful in energizing employees, Markey says. "If you want your employees to be energetic and happy about their work you need to let them know that they can create very high net-promoter scores and that their work will be recognized.
"Using the system also means letting employees know how to use the system. They will decide what's the problem and how to react and make changes. So it is also a way of granting power, which will make employees feel better," he added.
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