The Ultimate Question: Driving Good Profits and True Growth

by Fred Reichheld

Book Overview

Based on extensive research, 'The Ultimate Question' shows how companies can rigorously measure Net Promoter statistics, help managers improve them, and create communities of passionate advocates that... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 1591397839
• ISBN13: 9781591397830
• Release Date: March 2006
• Publisher: Harvard Business Review Press
• Length: 224 Pages
• Weight: 2.95 lbs.
• Dimensions: 1.0" x 6.4" x 9.5"

Customer Reviews

NPS, finally a customer service score I can use

The Ultimate Question is compelling to read. Alright, so I listened to it. Then I went out and bought five more copies for the senior people on my team. This question (and the supporting elements) have already begun to ripple out and have an impact upon our organization. Would you refer us to your friend or family member? It places accountability upon the person being asked at a completely different level. Talk about amping it up. The second, and in many way more important element, is tracking this effort with the same level of dilligence and seriousness of your accounting or financials. Actually making this a metric you track with results that work their way toward forecasted revenue is huge. It justifies the effort of trying to track it in the first place. And of course at the end of the day we get to delight our customers which is why most of us started our businesses in the first place. We're learning what we can do better and reacting to it more quickly...probably because we respect the NPS system more than we ever did our customer satisfaction surveys. I can only imagine how our organization and our work product will be over the long term. An excellent cornerstone element!

Exceptional

The key to this book's central idea is that you can REPLACE a large handful of other questions with this single question, so people will actually give you feedback. With a longer set of questions, you only get answers from people who enjoy filling out questionnaires! With this single powerful metric, you can watch your company go toward or away from customers. I plan on aiming part of my business in this exciting direction.

So good I had to share with a friend

There are a lot of books on customer experience, but this is the one that sets the standard. The rationale is stunning. But best of all there is a real method of measuring this soft, squishy thing called customer loyalty. When I saw that General Electric was using Reichheld's method as a means of determing compensation to its managers ... well, what more proof do you need. So I had to buy this book again, this time to send to a friend of mine who was a doubter.

Determine the Difference Between Good and Bad Profits with NPS

Fred Reichheld in his book, The Ultimate Question, makes the claim that there are good profits and bad profits, and organizations, for too long, have been chasing the bad profits. Bad profits result from cost cutting and attempts to squeeze the last dollar out of customers. Good profits come from growth in the form of a new business recommendation or additional purchases from current clients. The problem is there's no real way to differentiate; companies feel pressure to make profit, whether good or bad. Reichheld feels there is a better way. Reichheld says that the way to good profits is by increasing overall customer loyalty, but until now there hasn't been a good way to measure this. Traditional customer satisfation and retention surveys have shown little to no coorelation to actual customer behaviors. So while companies pay lip service to these surveys they'll always act on what they can measure - accounting numbers. These numbers are accepted because they follow the Generally Accepted Accounting Pricinples (GAAP). Reichheld proposes a standardized system for measuring loyalty with the Net Promoter Score (NPS) and the Ultimate Question. While experimenting with above customer loyalty surveys, Reichheld found that no answer really coorelated with customer action, except one, the Ultimate Question. "How likely is it that you would recommend this company to a friend or colleague?" Use a scale of 0-10 to grade against and you'll have a clear picture of your business. Anyone answering 0-6 is labeled a detractor, someone who is probably bad mouthing your business and creating the greatest amount of headaches. Anyone answering, 7-8, is nuetral, neither hurting nor promoting your business. People responding 9-10 are your promoters, and best source of recurring and new business. Take the percentage of promoters minus the percentage of detractors and you have your Net Promoter Score (NPS). A simple formula: P - D = NPS Reichheld goes on to prove that companies with a high NPS are able to leapfrog the competition even when the odds are stacked against them. He discusses how to implement the system and combat some of the problems that arise, using real world examples of companies like Enterprise and Intuit. The Ultimate Question is an extremely powerful concept and a book I would recommend to any decision maker looking to grow their organization. If his concept catches on, businesses will have a tool to point to as an alternative to strict financial numbers. Reichheld offers a way to grow our businesses through good profits and stop attacking customers when chasing bad profits.

The Net Promoter Score drives customer loyalty

In The Ultimate Question, loyalty expert Fred Reichheld says that the best way to raise profits and generate business growth is to ask customers `Would you recommend us to a friend or colleague?' He suggests that asking this question can give companies of all kinds a precise understanding of the experience its customers have when dealing with it. The answer to Reichheld's ultimate question manifests itself in the form of a Net Promoter® Score (NPS), a concept co-developed with Satmetrix Systems, which reveals to a company how much its customers like doing business with it. He says it demonstrates to companies how true, positive growth can be achieved by making your customers love doing business with you so much that they tell colleagues about it. He also states that this is the only way for a company to maintain growth long term. The book itself is easy to read and is clearly broken out into three sections discussing why the ultimate question works, how to measure if it's working, and what a company needs to do in order to be ready to really grow by implementing customer centric metrics. While there are other books out there discussing the concept of customer loyalty, The Ultimate Question goes into much greater detail on how to do this using the Net Promoter Score, a metric quickly gaining traction with companies such as GE, American Express and Four Seasons, all of which are profiled to some extent in the book. Reichheld's belief is that the vast majority of companies don't have in place the right strategies or mindset to achieve true growth and he cites research which shows that while an extremely high percentage of senior level executives congratulate themselves on how good their customer experience is, their customers, when asked, paint a very different picture. The results show there is a 70-80% gap in the scores CEOs gave themselves, and those their customers gave them. Reichheld's point here is a valid one - customer experience needs to be something that is addressed at every level of an organisation. It isn't enough for a CEO to simply think the company has good customer service, if in reality it isn't happening. If good customer experience is lacking within an organisation, the CEO needs to know and needs to know why, in order to turn it around. Reichheld also states that it isn't enough to simply implement the Net Promoter Score measurement within a company. Having this metric in place will help only if the company has gone through the following process, which he calls the three D's, in order to ready itself for the results, whatever they may be: - Design value propositions that focus on the right customers; - Deliver these propositions end-to-end, across every employee and every department in the company; and, - Develop the ability to deliver this proposition consistently over time and in line with the changing needs of the business. If a company can get this right, Reichheld says it will be in a posit