By: Jim Roddy, President & CEO at the RSPA
Fred Reichheld has been top of mind for me lately for several reasons. Reichheld, creator of the Net Promoter System (NPS) of management, is regarded as one of the world’s foremost authorities on customer loyalty.
I’ve been re-reading (and obsessing about) Reichheld’s work for two reasons. First, a big focus for RSPA’s upcoming RetailNOW 2025 show will be helping VARs and ISVs better compete against the margin-obliterating, VC-backed, 800-number, one-size-fits-all POS providers who don’t have a channel. Among the best ammo for that battle is providing extreme personal customer service.
The second reason is the RSPA just conducted our annual member survey where every year we ask what Reichheld calls “The Ultimate Question.” RSPA’s version of that is, “On a scale of 0-10, how likely is it that you would recommend membership in the RSPA to a colleague, friend, or family member?”
How did we score? I’ll answer that in a second. First, let’s dive into Reichheld’s “Six Principles of Loyalty” from his book Loyalty Rules, then I’ll share RSPA’s NPS results and offer a few thoughts for VAR and ISV leaders:
#1 Play to Win/Win
- A wise manager tracks actual customer retention.
- His team accuses him of being in a state of perpetual dissatisfaction about the level of value being delivered to customers, of being unrelenting in his search for ways to become even better.
- Trust among partners is built up over time, yet all it takes is a single instance of betrayal to destroy years of work building a relationship.
#2 Be Picky
- Cultivate business relationships only when both sides can provide special value. Loyalty must be a two-way street.
- “We don’t want short-term customers. They muck up the game at the expense of the long-term customer.”
#3 Keep It Simple
- Complexity is the enemy of speed and flexibility.
- Most people tend to invoke “loyalty” to old structures and old practices in an attempt to resist change and progress. But they are confusing loyalty with nostalgia.
- Great leaders don’t rely on building contempt for the competition. Rather, they ensure that their teams set such challenging goals for delivering value to customers and partners that all energy must go toward meeting these important targets.
#4 Reward the Right Results
- The trick is to home in on the relatively few dimensions of performance that truly matter to your target customers, and then to track performance with the same rigor that most companies apply to their profit statements.
#5 Listen Hard, Talk Straight
- Loyalty is impossible without trust. Trust is impossible without accurate, reliable information. Nothing magnifies the loyalty effect like the trust engendered by open, honest, and direct exchange of information and ideas.
- He cares about people and their success – not just from his sympathetic listening style, but from his follow-through with practical action that improves their lives.
#6 Preach What You Practice
- Everyone must remain focused on serving customers better, not on destroying competitors.
- Chick-fil-A’s Symbols of Success program spotlights store operators who have accomplished outstanding growth, not only rewarding them with a free automobile, but also publishing biographical sketches of each winner, emphasizing those qualities and actions that best reflect the company’s core principles.
RSPA Recommended Read Rating: 9.0/10
NPS can be scored on a scale of -100 (every survey respondent is a Detractor, rating your company 6 or lower on a 0-10 scale) to +100 (every survey respondent is a Promoter, rating your company 9 or 10 on a 0-10 scale).
For 2025, RSPA clocked in at a world-class +76, the fourth consecutive year we’ve scored in the 70s. We’re delighted that 82% of our members who participated in our survey are Promoters – a.k.a. Raving Fans.
After reflecting on our score and reading dozens of effusive member comments (like “I really enjoy the sense of community and the connections that are built through this group” and “You provide wonderful insight and really do have the most wonderful people working for you”), I noted a few of Reichheld’s lessons that VAR and ISV companies should fully embrace:
- Track customer retention: If you can measure it, you can manage it.
- Cultivate business relationships only when both sides can provide special value: Don’t think about “making sales”; instead seek to be a trusted advisor to prospects and look for the right match – for you and for them.
- Complexity is the enemy of speed and flexibility: We’ve learned by conducting 100+ Customer Health Checkup merchant surveys for RSPA VAR and ISV members that speed of response is the #1 factor in determining customer satisfaction and loyalty.
- Customer conversations should be an open, honest, and direct exchange of information and ideas: Raise your hand if you like it when somebody “pitches” you. Raise your other hand if you like when people “beat around the bush” with you. I’m guessing both your hands remained below your shoulders. Treat your customers the way you want to be treated – candidly and with mutual interest always top of mind.
- Everyone must remain focused on serving customers better, not on destroying competitors: You might be thinking to yourself, Hold on, Jimmy – didn’t you say earlier RetailNOW is going to focus on beating the 800-number guys? Your darn right I did. The way to do that isn’t by bashing your competitors or trying to copy them. The formula for success in today’s channel landscape has less to do with the competitors nipping at your heels and everything to do with the leader who looks you back in the mirror every morning. Invest in building a great culture for your team, work with trusted IT partners who can help provide your customers a unique value proposition, and then provide extreme personal customer service they’ll never forget. Who gives a flying fig if your competition buys up every Google AdWord and mails postcards to your merchants? Remain focused on serving your customers better, and you’ll earn their loyalty.
To learn more, purchase your copy of Loyalty Rules here.
