I have read and reviewed all of Fred Reichheld’s previous books and thus was especially interested in reading his latest, The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer Driven World, co-authored with a Bain colleague, Rob Markey. It is a revised and expanded edition of Reichheld’s previous book (The Ultimate Question: Driving Good Profits and True Growth) in which he examines various dimensions of loyalty while focusing on what I consider to be an especially important business issue: knowing what is most important to customers by accurately measuring the nature and extent of customers’ satisfaction. As Reichheld explains, “What this book offers…is a wholly new kind of measurement, a measurement that can focus an entire organization on improving every customer’s experience day in and day out. The process is both simple and radical. Companies need to ask just one question — the Ultimate Question — in a regular, systematic, and timely fashion.”
Here’s the question: “On a zero-to-ten scale, how likely is it that you would recommend us (or this product/service/brand) to a friend or colleague?” Reichheld then adds, “I also instructed companies to ask at least one follow-up question: ‘What is the primary reason for the score?’”
According to Reichheld, respondents can be categorized as follows: “Promoters” (a score of 9 or 10), “Passives” (7 or 8), and “Detractors” (6 or lower). He suggests that the phrasing of the ultimate question “was shorthand wording of a more basic question, which is, “Have we treated you right, in a manner that is worthy of your loyalty? ”
What we have in UQ2 is a much wider and deeper development of the original concept. In fact, the reader is provided with Net Promoter Score system (NPS) that produces a current and accurate measurement of the strength of an organization’s relations with customers: number of promoters minus number of detractors equals net score.
It is worth noting that several dozen of the most innovative, most highly admired companies have adopted and are now taking full advantage of the NPS system. They include American Express, Apple, GE, eBay, Facebook, Intuit, LEGO, Progressive Insurance, Southwest Airlines, and Zappos.com. Although Reichheld and Markey are convinced that this system is sufficiently flexible to serve the needs of almost any organization, whatever its size and nature may be, they assert – and I wholly agree – that NPS just won’t work without all three of these essential elements:
1. “Companies must systematically categorize promoters and detractors in a timely, transparent fashion.”
2. “Companies must create closed-loop learning and improvement processes and build them into their daily operations,”
3. “CEOs and other leaders must treat creating more promoters and fewer detractors as mission critical [as is the conversion of passives to promoters].”
In my opinion, this is one of the most valuable business books published, not only this year but since THQ was published in 2006.
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Fred Reichheld is a Bain Fellow and founder of Bain & Company’s Loyalty Practice, which helps companies achieve results through customer and employee loyalty. He is the creator of the Net Promoter®system of management. His work in the area of customer and employee retention has quantified the link between loyalty and profits. Fred’s books, The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value (HBSP 1996); Loyalty Rules! How Today’s Leaders Build Lasting Relationships (HBSP 2001), and The Ultimate Question: Driving Good Profits and True Growth (HBSP, 2006) have all become best sellers. In his latest book, The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer Driven World (HBR Press-Sept. 2011), Fred reveals how all manner of organizations have utilized the Net Promoter System (NPS) to generate extraordinary growth and profits.
Rob Markey is a Partner at Bain & Company and leads the firm’s Customer Strategy and Marketing practice globally. He has worked with Fred Reichheld on customer and employee loyalty for more than 20 years, supporting Bain clients all over the world on their journeys toward customer and employee advocacy. Rob has published articles on customer and employee loyalty in the Harvard Business Review and many other business publications. He is an active practitioner, and speaks regularly on the topic. He also contributes to a blog, which can be found at http://www.netpromotersystem.com. Raised in the suburbs of Cleveland, Ohio, Rob graduated with a degree in economics from Brown University. He received an MBA from Harvard Business School. He joined Bain & Company in 1990. He was one of the founders and served on the Board of “City Year New York,” and remains active in the youth service movement.
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