The Ultimate Question 2

We’ve been looking at an interesting concept from the book, The Ultimate Question by Fred Reichheld. 

The Ultimate Question, if asked systematically and linked to employee rewards, can help you manage customer loyalty and the growth it produces.  So what is the Ultimate Question? 

“How likely is it that you would recommend this company to a friend or colleague?”

(Note: for a business-to-business setting, a question such as, “How likely is it that you will continue to purchase products or services from us?” may be better.) 

The author created a Net Promoter^® Score (NPS) which is simply taking the percentage of customers who are promoters (those who answer the Ultimate Question with a 9 or 10 on a 0 [Extremely Unlikely]-to-10 [Extremely Likely] scale) and subtract the percentage who are detractors (those who answer a 0, 1, 2, 3, 4, 5 or 6 on a 0-10 scale). 

What do you think your company’s NPS is today?  And more importantly, what can you do to improve your NPS score?   

The obvious answer is to increase the percentage of promoters and decrease the percentage of detractors.  This will most likely require two separate and distinct processes.   

Let’s be clear from the outset.  A high NPS by itself is not the engine of growth for your company.  NPS provides you with feedback on the quality of your company’s relationships with its customers.  And although high-quality relationships are necessary for growth, there are other factors that must be in place as well—and some are very industry specific (e.g., your company’s ability to innovate). 

Ask the Ultimate Question…and Not Much Else

After asking the Ultimate Question, you don’t want to ask much else.  Bu you could add a feedback mechanism such as: 

• Any customer who gives you a failing grade is asked if they would like a company employee to contact them to better understand their disappointment and try to resolve their problem
• Or ask a second question, “What is the primary reason for the score you just gave us?”
• Or for any rating below a 9 or 10, “What is the most important improvement that would make you rate us closer to a 10?”

It’s critical that you ask the Ultimate Question to the customers you care about the most—your core customers.  You will need high response rates (if your response rates are less than 65%, you are not hearing from enough customers).  And consider gathering and reporting this “relationship data” frequently.  Once a year just won’t cut it.   Think about reporting your NPS scores as frequently as you do your financial data.  Otherwise, it is difficult to keep your employees’ focus on the development of loyal customer relationships.   

Who is Accountable?

When it comes to Net Promoter metrics, be as precise as possible.  Just as you look at your company’s profit by product line, geographic region, plant, etc, review NPS data at these levels as well.  Hold individuals accountable for the NPS scores that their groups produce.  Depending on your situation, you may be able to rank teams and individual members of your organization by an NPS that is the average of all the customers they served for a particular month. 

According to the authors, there is a tried and true system that will help drive your Net Promoter Scores up: 

• Design value propositions that focus on the right customers.  To do this, you must properly segment your customer base and then design a customer experience capable of delighting each targeted segment.
• Deliver those propositions 24/7/365—every department and every employee must pull in the same direction (bust the silos).
• Develop your company’s capability to do all this over and over again, renewing and reinventing the customer experience over time.

Sounds doable, doesn’t it?  It is—if, and only if, the CEO and other senior executives believe this is the right way to do business and the only real path to true growth. 

Building an Organization that Creates Promoters

The authors reference a survey of North American employees who had worked 10 years or more for the same company.  The survey reveals that only: 

• 39% trust their leaders to communicate openly and honestly
• 33% believe that employee loyalty at their company is appropriately valued and rewarded
• 28% think their company values people above short-term profits
• 19% can be considered “promoters”  (producing enthusiastic referrals for the company)

In fact, “detractors” outnumber “promoters” by a wide margin in businesses across North America.

I wonder if these results carry over to Christian-owned companies.  What about your employees?  On a scale of 0 – 10, what percentage of your employees would answer a 9 or 10 (Extremely likely) to this question: 

“How likely is it that you would recommend (my company) to a friend as a place to work?”

That’s a sobering (and a challenging) thought.  We, as Christian business owners, have the resources of Heaven to assist us.  We have the Bible as our standard for faith and practice.  We have the example of those who have gone before us and built businesses that are “more than just profitable.” 

This week let’s listen very closely to our customers and to our employees.  Have we created a work environment that enhances relationship building among all our employees?  For our customers, have we created a business that is delightful to work with?  Are we courageous enough to ask these critical stakeholders the “Ultimate Question?” 

Keith

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