November 6, 2006

News & Opinion: What is the right question?

By: 800-CEO-READ @ 11:12 PM – Filed under: Management & Workplace Culture

The folks over at execuBooks spend each week talking about a book on their blog. They normally bring in a guest writer to ponder a variety of aspects about the book. This week they are talking about Fred Reichheld's book The Ultimate Question.

In a post titled There is an even better question, Phil Dourado talks about the book and suggests a different query:
Fred's ultimate question is "Would you recommend us to a friend?" And it's a great question. He recommends scrapping all your satisfaction surveys and replacing them with this one ultimate question. Enterprise Rent-a-Car has done something similar, and to great effect.

But, it's still a question about intention. And customer intentions are slippery beasts.

I heard Chris Pilling, the CEO of the UK bank First Direct (highest levels of customer satisfaction for a retail bank in the UK consistently for the past ten years, the world's first telephone-only bank, some of the highest satisfaction ratings for a bank in the world...ever), say that they ask this question instead:

"HAVE you recommended us to a friend?"

We at 800ceoread are pretty big fans of NPS and The Ultimate Question. We use it weekly to find out how we are doing with customers. Our propaganda piece (i.e. marketing brochure) has two pages devoted to it.

Given Andrew's good question we decided to go to the source: Mr. Fred Reichheld himself. This is from an email Fred wrote me today in response to the post I sent him:
I agree that it is useful to gather the number of referrals a person claims to have made--but that is looking in the past, while growth is about the present/future. Someone who made six referrals over the past year but recently had a lousy experience (or found a better supplier) is not a promoter. I think the top priority should be to focus learning on the current (or immediate past like last week) and the near future--thus, the ultimate question works best as it is formulated in my book.

This made me think about Pfeffer and Sutton's Hard Facts, Dangerous Half-Truths & Total Nonsense. They say you should be careful of the past. It is amazing how quickly you color it with the circumstances of today. Use current data and constantly experiment rather than relying on what worked in the past.

I think that is what Fred is getting at as well.