The Ultimate Question: Driving Good Profits and True Growth

Ultimate Question: Driving Good Profits and True Growth By Fred Reichhled Harvard Business School Press, Boston, USA, 2006; pp. 210; Price: 24. 95 ISBN: 1-59139-783-9 If growth is what you're after, you won't learn much from complex measurements of customer satisfaction or retention. You simply need to know what your tell their friends about you. This is the central theme of the latest book of the loyalty guru Fred Reichheld. The Ultimate was recently ranked as the number one on Wall Street Journal's Business Best Seller's List and number one on the USA TODAY'S Best Sellers List. book is based on an extensive research by the Bain & Company in association with Satemetrix Systems Inc. (a company that develops software to gather and analyze real time customer feedback). Ultimate Question guides companies how to rigorously measure the Promoter Score and help managers to improve it and in the process create communities of passionate customer advocates which stimulates innovation. long list of companies which have benefited from the new metric for Measuring Loyalty with One Number consists of companies like USAA, GE, Intuit, HomeBanc, Dell, Apple, SAS, Harley-Davidson, Enterprise Rent-A-Car, etc. Ultimate Question referred to in this book is likely is it that you would recommend this company to a friend or colleague? , and the metric that it produces is called the Net Promoter Score (NPS). form of the question may vary from organization to organization, but the essence remains the same: it is based on willingness of a customer to recommend/promote the organization to others. author states that loyalty is the key to profitable growth and the new metric is the missing link between the Golden Rule, Loyalty and True Growth. He further adds that there are two requirements for growth viz. (1) profitable and (2) happy customers. Everyone knows how to measure but the real challenge is the measurement of happiness. Satisfaction surveys are enough. Companies have long been tracking the customer retention rates which tells how fast the customer bucket is emptying - but tells nothing regarding how fast the bucket is filling up. These are the poor indicators of attitudes when are held hostage by high switching costs or other barriers (pp. 26). NPS is a simple measure and a practical indicator of what were thinking and feeling about the companies they did business with. It links directly the customers' attitudes and customers' actions to the growth of the company. book is organized into three parts as follows: Part 1: Why Ultimate Question Works This section explains how NPS work to distinguish between bad profits and good profits and to illuminate the path to true growth and how to calculate the NPS and benchmark against world-class standards. Part 2: How to Measure Responses This section explains how to avoid the pitfalls of customer satisfaction surveys and construct a practical measurement process which can turn NPS into a reliable tool for assigning accountability and managing priorities. Part 3: Becoming Good Enough to Grow This section of the book explains, with the help of case studies of companies using this metric, how this metric is providing a better customer experience and thus building better relationships with their customers. It lays down the steps a company needs to follow to improve the customer relationships and turbo charge the company's growth. text is replete with real life case studies of companies which make it easier to visualize the use of NPS metric in practice. author claims that this is the best way to measure loyalty. Customers of a company can be classified into three categories based on Ultimate Question. A scale ranging from 0-10, where O stands for extremely likely to recommend, 5 stands for the neutral customers and 10 stands for not at all likely to recommend, has been used to classify the into three groups viz. …