The Ultimate Question

"Do what you do so well that they will want to see it again and bring their friends."

- Walt Disney

The book, “The Ultimate Question” by Fred Reichheld is one must read book on designing an organisation that customers love doing business with and sing its praises. The book is about that one ultimate question. Loyalty is the key to profitable Growth. Are customers sticking around out of loyalty or just out of ignorance & inertia?

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A company can’t grow if it is churning customers out of the backdoor faster than the sales force can drag them in the front!

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?The question is on a scale of zero to ten, “How likely are you to recommend us to a friend or family”. The responses are then categorised into Promoter, Passives and Detractors.

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Two conditions must be satisfied before customer make a personal referral. They must believe that the company offers superior value in terms that an economist would understand: Price, features, quality, functionality, ease of use etc. But they must also feel good about their relationship with the company. They must believe the company knows and understands them, values them, listens to them, and shares their principle. Basically, the company is engaging both the “Head” & “Heart” of the customer.

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The book offers a measurement system that can focus an entire organisation on improving the customer’s experience day in and day out. Companies just need to ask one question- The ultimate question- in regular, systematic and timely fashion. They need to publicize the answers, then they need to put the information to work right away. The book follows the Golden Rule, “Treat others the way you want to be treated”

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The NPS is not a measure of Customer satisfaction but a measure of Customer Relationship. The companies need to be vary of “Bad Profits”. They are the profits earned at the expense of Customer relationships. Whenever a customer feels misled, mistreated, ignored, or coerced, then profits from that customers are bad. Bad profits are about extracting value from the customers, not creating value.

Ironically, the best customers often get the worst deals. If you are a patient, loyal user of your mobile company, chances are you are paying more than the disloyal switchers who signed up more recently! Bad profits work much of their damage through the detractors they produce. Detractors are the customers who feel badly treated by a company- so badly that they cut back on their purchases, switch to the competition if they can, and warn others to stay away from the company they feel has done them wrong. They drive up service cost, demoralize frontline employees with their complaints and gripe to anyone who is ready to listen.

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Some principles for creating a successful measurement system:

1.????Ask the ultimate question & very little else

2.????Choose a scale that works & then stick to it

3.????Aim for high response rates from the RIGHT customers

4.????Report relationship data as frequently as financial data

5.????The more granular the data the more accountable the employees

6.????Audit to ensure accuracy & freedom from bias

7.????Validate that score link to behaviours

Design a winning Customer strategy- The key is to design the value propositions that appeal to customers in each target segment. The value proposition is not merely a product or service, it includes the entire customer experience. Some key steps are:

a.????Invest in your core

b.????Reduce bad profits

c.????Find additional Promoters

Deliver- Build an organisation that creates promoters- Delivery depends partly on creating the right priorities and on sending the right messages throughout the organisation. If the frontline employees aren’t excited about what they do for the customers, it’s unlikely that the customers will be excited about what is done for them.

a.????Send the right message

b.????Hire & Fire to inspire

c.????Pay well & invest in training- so employees invest in relationships.

d.????Small teams enhance accountability & service

e.????Link measure & rewards to company values

Develop a community of Promoters -by listening. To develop the organisations capabilities to find innovative ways to delight customers month after month & year after year – listen to your customers. They will tell you.

a.????Hold direct conversations with your customers.

b.????Create process for systematic listening of frontline employees.

c.????Let customers guide innovation

d.????Help customers delight one another

e.????Create an inner circle

f.?????Bring traditional customers into the circle