- Hardcover: 224 pages
- Publisher: Harvard Business School Press; 1 edition (March 2, 2006)
- Language: English
- ISBN-10: 1591397839
- ISBN-13: 978-1591397830
- Product Dimensions: 9.2 x 6.4 x 1 inches
- Shipping Weight: 1 pounds
- Average Customer Review: 94 customer reviews
- Amazon Best Sellers Rank: #460,817 in Books (See Top 100 in Books)
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The Ultimate Question: Driving Good Profits and True Growth Hardcover – March 2, 2006
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From Publishers Weekly
Almost everyone appreciates the importance of customer satisfaction in business, but this book takes that idea to two extremes. First, it claims that customer satisfaction is more important than any business criterion except profits. Second, it argues that customer satisfaction is best measured by one simple question, "Would you recommend this business to a friend?" Pressure for financial performance tempts executives to seek "bad profits," that is, profits obtained at the expense of frustrating or disappointing customers. Such profits inflate short-term financial results, Reichheld writes, but kill longer-term growth. Only relentless focus on customer satisfaction can generate "good profits." One unambiguous question, with answers delivered promptly, can force organizational change, he claims. Reichheld makes a strong rhetorical case for his ideas, but is weaker on supporting evidence. The negative examples he gives are either well-known failures or generic entities like "monopolies," "cell phone service providers" and "cable companies." When presenting statistics on poor performers, the names are omitted "for obvious reasons." On the other hand, the positive examples are named, but described in unrealistically perfect terms. Believable comparisons of companies with both virtues and flaws would have been more instructive. (Mar.)
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Among management books, this one's a keeper. -- The Washington Post
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But first, the book also recaps the whole premise of building a loyalty-based culture...the virtues and the challenges, which requires a fundamental understanding and acceptance of the idea of good profits vs. bad profits.
If you feel that all profits are created equal, don't bother with the book, just go try to wrangle as much from customers as you can. Maximize price and minimize cost. But if you believe (or could be convinced) that true profit maximization means maximizing the lifetime profitability of each relationship (whether with customers, employees, investors, etc.), then you will likely buy into the good profit / bad profit concept.
Beyond that, the book provides an in-depth review of the flaws inherent to most surveys and feedback channels. The single biggest flaw...adverse selection. If you are not getting feedback from a representative sample of your target population, don't be surprised when it is very skewed (up or down).
What really matters when it comes to loyalty is whether or not someone has or will recommend you to others. If yes, great! Why? If not, uh-oh...why not? If you can get focused on the answers to those questions, you'll discover a LOT about your business and how to make it better.
Look at the variety and range of perspectives offered by the reviews and articles this book has generated and the emotions attached.
So, if you want to understand the hype you have just got to read the book and make your own judgment. But it really depends on what perspective you bring to the opening pages.
I `buy in' to the argument that loyalty is great for business, so I found the book easy to read and understand and incredibly helpful. The argument is well crafted and supported, and with enough `detail' and case studies to support and reinforce my point of view. The underlying concept being that every organisation has both `detractors' and `promoters' and the objective of every company should be to grow the number of promoters whilst eliminating detractors. Those organisations with many more promoters than detractors tend to be more successful than others.
But many simply don't buy into the underlying premise that building customer loyalty is achievable, even desirable, in today's business environment. I'm not sure that this book will change their perspectives. Much of the data could be described by some, as `soft', `open to misinterpretation' even questionable but it is certainly an intriguing proposition.
Then of course, there is the whole concept that by merely asking one question - The Ultimate Question - will give you a useful insight into the health of your company. Is it really that simple?
Make your own judgment. For me though, The Net Promoter Score is a useful measure that has application in most industries and could be a terrific lead indicator. Would I `bet the farm' on this as the only measure? I don't think so!
Do I want to know the ratio of my company's Promoters to Detractors? You bet.
The challenge, as it is in most business applications, is the accurate gathering and analysis of the data. Reichheld gives some examples, and also some pitfalls on this front. Bottom line - if the tools are available, this seems like a powerful tool for the business owner and manager.
after reading this book you will have a good understanding of the NPS theory wich makes this book usable in a professional way as well.
The book explains very well with a lot of examples but doesnt give an answer to the question how you should apply this in your business. For this purpose the Book Answering the Ultimate Question by Richard Owen and Laura L Brooks PhD is very usable and highly reccomended by me for managers who want to work with NPS.