March 1, 2006

Jack Covert Selects: Jack Covert Selects -- The Ultimate Question

By: Jack @ 10:04 PM – Filed under: Management & Workplace Culture

The Ultimate Question: Driving Good Profits and True Growth
By Fred Reichheld, Harvard Business School Press, 210 Pages, $24.95 Hardcover, March 2006, ISBN 1591397839
Every company has its regular measurements from ROI to bestselling products to annual budgets. One of the hardest (and most important) aspects to measure is customer satisfaction. Saying this is easy; implementing it is not always so simple.
Fred Reichheld proves there is a better way to measure customer satisfaction--a measure that prophesizes actual growth, thus showing profit potential. This better way involves using the "ultimate question" which is, "How likely is it that you would recommend this company to a friend or colleague?" Respondents can rate the likelihood from 0 - 10. Then ask the appropriate follow-up question.
To analyze the responses, place each respondent in a category according to their response; categorize them into: a) promoters: those who choose 9 - 10 and are your free marketers; b) neutrals: those who choose 7 - 8 and are neither satisfied nor dissatisfied; or c) detractors: customers that answer 0 - 6 and may be spreading negative buzz about your company. Finally, calculate your "net promoter score" (NPS) by subtracting detractors from promoters.
What's new about Reichheld's measurement? It's short and simple, yet effective. The rate of customer satisfaction actually correlates to customers' actions. If customers make a personal referral, they "believe that the company offers superior value" and "feel good about their relationship with the company." These customers are your promoters. The follow-up question to these customers asks what they would say for their recommendation. This question gives your promoters a chance to think of a recommendation in advance; thus, giving them a script to use for referrals.
I'd love to say I summed up everything important in the book but there's not enough room in this review to do so. The book has a lot to offer; we have even implemented its measurements here at 8cr. Honestly, to sound cliche, "The Ultimate Question" is truly the ultimate guide to measuring customer satisfaction. Check it out; you won't be disappointed.
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