When I first saw this book listed on our class syllabus, I was intrigued. The ultimate question? What exactly is the Ultimate Question? I found my answer on page 28:
“How likely is it that you would recommend company X to a friend or colleague?”
In Fred Reichheld’s book, “The Ultimate Question: Driving Good Profits and True Growth”, he argues that company’s profits are both good (coming from a satisfied customer) and bad (coming from an unsatisfied customer). Part of figuring out what portion of your profits are “good” (and knowing how to grow your profits in the future) is understanding who’s promoting you versus who is unhappy with your service or product. Reichheld even has a formula that will help companies calculate what he calls their Net Promoter Score, or NPS. A company’s NPS is essentially equal to its promoters minus its detractors (the unhappy customers)….and this score influences a company’s profits and growth.
Reichheld argues that “companies need to understand the economic value that results from building better relationships.” Yes, even one customer’s perception of a company can potentially affect its bottom line. Actually, as my classmate Luke pointed out, Reichheld actually says that one negative comment about a company can neutralize between three and 10 positive comments. And this is where the Ultimate Question comes in: studies have shown that potential customers trust their peers more than they do advertisements or newspaper articles. According to the 2007 edition of the Edelman Trust Barometer (full disclosure: I work at Edelman), people are heavily influenced by their friends, family, coworkers, and other who they consider to be similar to themselves. “For the second consecutive year, “a person like me” or a peer is the most trusted spokesperson in the United States at 51%.”
Because people are so heavily influenced by what their friends and family are saying, corporations have to develop and maintain good relationships with their customers. But Reichheld points out that many companies are so huge that it’s becoming increasingly difficult (and often costly) to obtain feedback from a substantial number of customers. So how can companies effectively solicit responses from those who have bought their product or service?
Companies can come right here…to the Internet. With numerous types of social media available, the Internet allows companies to listen to what customers are saying about them and to build relationships with these customers. For example, a corporate blog can serve as a pseudo focus group but also allows companies the opportunity to respond to those commenting on the blog. This two-way communication is key to building relationships, and the Internet provides many effective, inexpensive outlets on which to do this. Granted, not all customers spend time online or feel inclined to comment on a blog, but creating corporate blogs or forums is certainly one good approach that a company can (and should) take when reaching out to customers.
Of course, the idea of obtaining feedback online isn’t new. Listservs, online forums, and e-mail groups (like the one created by the Consumer Tax Group, as mentioned in Reichheld’s book) were among some of the original online methods used to garner comments from customers. But the current technology and social media landscape are continually making this process much easier.
