Rackspace’s Strategies for Achieving the Highest NPS in the Hosting Industry

Rackspace is a respected managed hosting company that strongly focuses on the commitment to their customer experience strategy, also called Fanatical Support®. This reputation helped them grow into one of the largest infrastructure providers with a revenue run rate of more than $1 billion and an incredible Net Promoter Score® of 58.

The way Rackspace measures and manages Fanatical Support is by putting Net Promoter System® at the very core of its DNA.

In his interview, Julian Lopez, Director of Customer Loyalty at Rackspace, explains,

“Net Promoter is the method that we use to take Fanatical Support and operationalize it by constantly measuring ourselves by this standard: Are we delivering a product that our customers are proud of?”

There are three key elements that Rackspace uses to achieve such a high Net Promoter Score.

Key Takeaways

1. Rackspace uses NPS as a core part of its customer experience strategy, adapting it to meet departmental needs and track changes in customer loyalty over time.
2. The company emphasizes hiring employees who share its customer service values, training them in five key elements: responsiveness, ownership, resourcefulness, expertise, and transparency.
3. Rackspace’s leadership actively reviews NPS feedback to guide strategic decisions, while focusing on direct communication to build lasting customer relationships.

1. Adopting NPS as Part of Their Ongoing Customer Satisfaction Program

NPS is a metric that measures customer loyalty by asking them to answer one simple question: On a scale of 0-10, how likely are you to recommend Rackspace to a friend or colleague?

Here, Mark Roenigk, the Chief Operating Officer of Rackspace, shares that they’ve been asking this question in one form or another as far back as 2003-2004.

However, they quickly realized that just asking the question and calculating a score was simply not enough. So they started tracking customer responses over time to detect positive or negative shifts in their satisfaction score.

By continuously measuring customer satisfaction, NPS was far from being just a static number for them. Instead, it was a real-time assessment of the company’s performance and success that reflected customer trends and changing preferences.

In 2008, the program evolved a bit more. Since then, they’ve remained loyal to NPS, slightly changing their approach while making sure each department has customized aspects of the program to fit their needs.

2. Motivating Employees to Care About Customer

Angus Dorney, Rackspace’s GM, stresses that HR plays a key role in maintaining its culture of customer service through finding and keeping the right people.

It all begins with hiring the right people who possess the right skill set to provide great customer support. When interviewing candidates, Rackspace looks for people who share the same vision and are passionate about the company’s mission, followed by technical skills and capabilities.

If a person is a culture fit at Rackspace, then motivating them becomes much easier. As a result, it hires only one person for every 17 interviews it conducts.

Once hired, the candidates go through the so-called Racker Rookie Orientation, a three-day long onboarding process for new employees. There, new Rackers (that’s how Rackspace employees call themselves) are educated on the company’s mission and the 5 elements of Fanatical Support:

1. Responsiveness

• Rackspace customer support team is available 24x7x365
• Customer Support is accessible by phone or ticket at all times
• They take special care to assist customers with an urgent request

2. Ownership

• They take personal responsibility for the customer’s hosted Rackspace infrastructure or services
• Rackspace empowers its employees to make decisions and take actions
• A live escalation contact is available to customers at all times

3. Resourcefulness

• Rackspace employs creative and practical solutions for customer’s hosting service, including items related to the network, hardware or operating system.

4. Expertise

• Rackspace has subject matter experts available that know how to identify problems and offer solutions
• Support teams will provide advice to any customer about the Rackspace environment or services based on industry and technology expertise

5. Transparency

• Rackspace customer support team actively listens and provides customers with direct and individualized communications
• Rackspace communications and conversations are not scripted, but are personal responses addressing customer’s specific needs
• Their answers to customer questions are straightforward and honest, and they do not avoid tough questions

Rackspace also uses NPS to examine their internal employee engagement and loyalty, as well as their internal performance on back office functions. They believe that understanding satisfaction within their own company provides a steady stream of feedback to identify and prioritize issues early.

They were among the first companies to recognize the importance of employees being Promoters themselves. Only employees who are truly enthusiastic about the service they are selling can turn a customer into a Promoter.

3. Putting the Customer at the Heart of the Business

The most important goal for Rackspace is achieving high customer satisfaction and building long-lasting customer relationships. But in the world of big companies, it can become more and more difficult to manage it back to simple.

Simplicity is one the main reasons Rackspace chose Net Promoter Score. Of course, there can never be enough analysis, reports and metrics, but the true value comes from simply listening and responding to your customers.

“Whatever method you choose to measure customer engagement and satisfaction, don’t over-complicate it, and don’t expect it to be the perfect metric,” said Lopez.

Find a way to listen to your customers and then use that feedback to fuel growth and build a strong brand. Use their recommendations to improve your product and service.

Just by feeling that their voice matters, customers will be more inclined to provide feedback and, hence, be more loyal and satisfied. They will become another advertising force for the company and tell their friends about Rackspace.

In that same interview, Roenigk shares that Lanham Napier, Rackspace CEO, reads open-ended responses every day and sometimes personally replies to some customers. The Rackspace Board of Directors also reviews NPS feedback in their quarterly meetings.

It’s one of the ways they keep a pulse on what customers think and feel. Lanham believes the path to success comes through earning 10 out of 10 on the Net Promoter survey. His specific quote is:

“Greatness is achieved when customers say we are great.”

This philosophy guides Rackspace in its efforts to integrate innovative solutions while keeping the customer at the forefront.

Leveraging AI for Personalized Customer Engagement

Rackspace transforms customer engagement with AI to deliver personalized and efficient service. Their Foundry for AI by Rackspace (FAIR) initiative turns AI concepts into practical applications, allowing for real-time data analysis and tailored customer interactions.

By automating routine tasks, Rackspace’s AI integration frees up staff to handle complex issues, enhancing efficiency and service quality. This approach strengthens customer relationships and boosts Rackspace’s NPS, showing commitment to customer-centric innovation. Customers who receive responsive and personalized service are more likely to recommend the company.

Flexible Multicloud Strategies for Better Customer Experience

With 85% of organizations now using multicloud environments​, Rackspace has responded by refining its multicloud management approach. They offer consulting and advisory services focused on cloud adoption, application modernization, and security enhancements.

Rackspace’s expertise in multicloud environments positions them as a leader in delivering tailored, customer-centric solutions. They help businesses integrate multiple cloud environments seamlessly, ensuring cost efficiency and scalability​.

Elastic Engineering for Responsive Service Delivery

Rackspace’s Elastic Engineering model shifts from traditional managed service agreements to more flexible, project-based engagements. This model allows clients to access on-demand expertise and tailor services to specific project needs. By removing long-term contracts and focusing on outcome-based solutions, Rackspace improves client engagement and responsiveness​.

Strengthening Cloud Security and Data Management

In response to growing cybersecurity concerns, Rackspace has prioritized cloud security and data management as core components of its service offerings. With 80% of security exposures occurring in cloud environments, Rackspace implements robust security measures to address such vulnerabilities as misconfigurations and unauthorized access​.

By leveraging advanced security strategies and AI-driven solutions, Rackspace protects customer data against evolving threats. This focus on security not only builds trust but also contributes to Rackspace’s high NPS by safeguarding client assets and enhancing the overall service experience​.

NPS Is Your Key to Improving Customer Loyalty

People are your most valuable asset. They’re some of the best leading indicators of a company’s overall health and value. Collecting their feedback is crucial to your company’s future growth and success.

But gathering data is useless if you don’t act on it. With Retently NPS you don’t have to worry about the hassle of manually creating your NPS survey, keeping track of customer feedback, and building reports.

With an easy-to-use user interface and intuitive design, you can now get actionable insights on how to increase your customer lifetime value, reduce churn, and improve brand loyalty.