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The Ultimate Question 2.0: A book review

The Ultimate Question 2.0: A Book Review

The Ultimate Question 2.0: How NET PROMOTER Companies Thrive in a Customer-Driven World
Fred Reichheld with Rob Markey
Harvard Business Review Press (2011)

This is a revised and expanded second edition of a book published in 2006. In it, Fred Reichheld skillfully develops several concepts in much greater depth. He explains how and why to take full advantage of an open-source system whose “engine” can drive profitable growth.

In most of his previous books and articles, he focuses on building and sustaining trust between and among those who share a workforce.  Trust is again an important theme in this latest book because if customers do not have trust in a company, its people, and its products and services, as well as in its values, they will have little (if anything) to do with it and will certainly not recommend it to others.

The eponymous book titles refer to a question of ultimate importance: “On a zero-to-ten scale, how likely is it that you would recommend us (or this product/service/brand) to a family member, friend, or colleague?” As Reichheld explains, the phrasing of that question is “a shorthand wording of a more basic question, which is, [begin italics] Have we treated you right, in a manner that is worthy of your loyalty? [end italics]…But the question really wasn’t [and isn’t] the heart of things. After all, no company can expect to increase its growth or profitability merely by conducting surveys. However, the question or questions might be phrased.”

With assistance from Markey, Reichheld does is provide a cohesive, comprehensive, and cost-effective management system by which that has three central components: categorizing customers into one of three categories (i.e., Promoters, Passives, and Detractors) through a simple survey, creating an easy-to-understand score based on that categorization, and finally, “framing progress and success in these terms, thereby motivating everyone in the organization to take the actions required to produce more promoters and fewer detractors.” In other words, on an ongoing basis, use current scores and related feedback to drive improvements.

Regarding the scores, Promoters provide a rating of 9 or 10, Passives 7 or 8, and Detractors 6 or less. For purposes of illustration, let’s say 100 customers respond as follows: 35 Promoters, 45 Passives, and 20 Detractors. The net score is determined by subtracting the total number of Detractors (i.e., 20) from the total number of Promoters (i.e., 35), which is 15. That is a baseline against which subsequent efforts to increase Promoters and decrease. Detractors are measured. Reichheld calls it the Net Promoter Score (NPS), and so shall I.

Think of the measurements as a mirror, one that reflects multiple realities. Only by understanding those realities — and how to respond to each effectively — can appropriate change initiatives be initiated to achieve and then sustain a never-ending process of improvement. “Flexible it may be, but NPS just won’t work without the following elements.” They are:

1. Companies must systematically categorize promoters and detractors continuously, timely, and accurately. It is also important to note when Promoters become Passives and Detractors become Passives. Also, to understand WHY.

2. Companies must create closed-loop learning and improvement processes and build them into their daily operations. In other words, NPS is not – and must never be viewed as – a customer relations improvement initiative or even a program. It must become and then remain an [begin italics] organic [end italics] system.

3. CEOs and other leaders must treat creating more Promoters and fewer Detractors as mission-critical. I’d say “mission imperative.” As Peter Drucker once observed, “Without customers, there is no business.”

Hundreds of the world’s largest and most complex organizations have adopted NPS. Still, I hasten to point out that it can also be of substantial value to almost any company, whatever its size and nature may be. Reichheld explains that it is “a business philosophy, a system of operational practices, and a leadership commitment, not just another way to measure customer satisfaction.”

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