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Why one question matters July 14, 2007

Posted by Steve Field in The Ultimate Question.
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I can’t think of a premise more simple, yet more revolutionary.

In The Ultimate Question, Fred Reichheld revolutionizes the meaning of the word profit by arguing that the bottom line is best served by focusing on customer needs and converting them into brand ambassadors.

In other words the ultimate question is: would you recommend our company to a friend?

The concept is so simple. But so right on. Business success depends on sales. Continued sales depend on customer satisfaction. And the highest form of customer satisfaction is the willingness and desire to recommend a company or brand to a friend or colleague.

This premise is grounded in the fundamental principle of the book The Cluetrain Manifesto. In this book (now available for free online), the authors argue that markets are conversations. The traditional approach to business communications was about talking at people — advertising, messaging, and brand development. The reality of today is that business communication does not only exist in a top-down manner. It also exists in a circular manner, with customers talking back to the company and to one another.

I like the approach that Reichheld takes. The idea of a Net Promoter Score is interesting, and seems to get to the heart of the matter — that the more likely that a company has customers willing to recommend them to a friend.

However, I am still confused on the methodology of the NPS. Perhaps that will come to light later in the book. There is a very real challenge in applying numerical metrics to a qualitative survey such as the NPS survey. Reichhart hasn’t yet disclosed his process, and I have a feeling he won’t in the book (as doing so would be like sharing the “secret sauce”). However, in order to understand how NPS works, it would be helpful if Reichart shared his methodology.

I’ll be looking for this in the rest of the book. In the mean time, has anyone else seen his methodology? Leave a comment — I would love to hear your thoughts on how NPS works.

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Comments»

1. John Bell - July 15, 2007

His methodology is based upon asking the one question – in one form or another – and then tallying up by subtracting Detractors from Promoters. It is deceptively simple. Not sure I buy the equation when he goes on to say that one negative comment can neutralize 3-10 positive comments.

2. Deborah - July 17, 2007

you can learn a lot about Net Promoter and how companies are using it by joining the Net Promoter community at http://www.netpromoter.com.


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