The Ultimate Question: Driving Good Profits and True Growth

Features

• Cover Type: Hard Cover with 210 pages
• Published by: Harvard Business School Press
• Edition: 1st Edition March 2, 2006
• Written in: English
• ISBN 10 Number: 1591397839
• ISBN 13 Number: 978-1591397830
• Book Dimensions: 9.4 x 6.2 x 0.9 inches
• Weighs: 1.1 pounds

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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Product Review
Among management books, this one's a keeper. -- The Washington Post

Reader Reviews
Those who have already read Reichheld's two previous books, The Loyalty Effect and Loyalty Rules!, are already well-aware of his exceptional reasoning and writing skills. Throughout his business career, he has demonstrated those skills when rigorously examining one of the most important and yet least understood business subjects: loyalty. Now more than ever before, the success or failure of individual careers and even entire organizations has been determined by the presence (or absence) of loyalty in one form or another. Obviously, loyalty depends upon trust which must be earned over time but can quickly, sometimes permanently be lost. In this volume, The Ultimate Question, Reichheld again 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." After struggling with one issue, I have decided not to reveal the question itself but can assert that it is the one question which must be asked because the responses to it are needed to guide and inform efforts to achieve "good profits and true growth." Unlike bad profits which are earned at the expense of customer relationships, good profits are earned with customers' enthusiastic cooperation. "A company earns good profits when it so delights its customers that they are willing to come back for more -- and not only that, they tell their friends and colleagues to do business with the company." True growth is based on good profits. It is real, verifiable, and sustainable. Of course, most companies try to grow but only a few succeed. In Chapter 1, Reichheld cites this statistic: almost 80% of the world's firms failed to meet a true-growth threshold of 5% a year in real terms from 1994 to 2004. Why? "The reason is that growth and short-term profits are often antithetical. Most companies can boost their short-term profits simply by following the practices just mentioned [in Chapter Ten]. But no company can do that and achieve sustained growth, because its customers will resent the company and will leave at the earliest opportunity." Hence the importance of formulating and then applying "a measurement that can focus an entire organization on improving every customer's experience day in and day out." Reichheld recommends what he calls the Net Promoter Score (NPS) which he explains in Chapter Three. Once again, I have decided not to provide any details. Both the Ultimate Question and NPS are best revealed within the context of Reichheld's lively narrative. But I can assert that for decision-makers in most (if not all organizations), what Reichheld has to say about both the Ultimate Question and NPS could well be the difference between success or failure. Here's what I consider to be Reichheld's most valuable insight: there is a direct and practical link between NPS and profitable growth. Therefore, have customers determine your current NPS. Their responses to the Ultimate Question will suggest what must be done to increase your NPS. Moreover, by continuing to use what is indeed "a wholly new kind of measurement," your organization (regardless of its size or nature) can then sustain profitable growth which will increase in direct proportion to an ever-improving NPS. Reichheld's latest book is a brilliant achievement. Bravo!