The Ultimate Question
The Ultimate Question by Fred Reichenfeld
The Ultimate Question is the latest installment from loyalty expert Fred Reichheld, a researcher with Bain & Co. The book revolves around Reichheld’s hypothesis that the crux of business growth and profitability is loyal customers who advocate a business to other customers.
While loyalty is nothing new, the unique element of the book is that Reichheld recommends using only one question to measure customer loyalty and adjust strategy: Would you recommend us to a friend or colleague? The Net Promoter Score (NPS) is the difference between promoters (9 or 10 on 10-point scale) minus detractors (1 or 2 on the same scale). The author’s research concludes that a high NPS indicated a greater likelihood of growth and profitability.
Reichheld developed NPS to distinguish between companies pursuing what he calls bad profits (short-term expense cuts or price reductions) versus good profits (those generated by investing in customer service). For example, Reichheld points out that Amazon.com (NPS of 73) sought growth by investing in free shipping instead of pursuing a national advertising campaign.
American Express, eBay, Enterprise Rent-A-Car, and Intuit are some of the corporations using NPS.
More details and NPS reports for several industries are available at www.netpromoter.com.
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