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Ultimate Question: Driving Good Profits and True Growth Hardcover – Aug 1 2010


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Product Details

  • Hardcover: 224 pages
  • Publisher: Harvard Business Press; 1 edition (Aug. 1 2010)
  • Language: English
  • ISBN-10: 1591397839
  • ISBN-13: 978-1591397830
  • Product Dimensions: 23.4 x 16.3 x 2.5 cm
  • Shipping Weight: 249 g
  • Average Customer Review: 5.0 out of 5 stars  See all reviews (1 customer review)
  • Amazon Bestsellers Rank: #298,221 in Books (See Top 100 in Books)

Product Description

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.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review

“It’s an eye opening and alluring account, told in a clear reasoned manner.” -- Globe and Mail, March 15, 2006

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Too many companies these days can't tell the difference between good profits and bad. Read the first page
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By PL on Aug. 3 2012
Format: Audio CD
Excellent yet simple way to make rapid progress in any business. A must for every business owner and manager. Takes your business to the next level.
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Most Helpful Customer Reviews on Amazon.com (beta)

Amazon.com: 90 reviews
15 of 15 people found the following review helpful
NPS, finally a customer service score I can use May 15 2007
By Eric Bauswell - Published on Amazon.com
Format: Hardcover
The Ultimate Question is compelling to read. Alright, so I listened to it. Then I went out and bought five more copies for the senior people on my team. This question (and the supporting elements) have already begun to ripple out and have an impact upon our organization. Would you refer us to your friend or family member? It places accountability upon the person being asked at a completely different level. Talk about amping it up.

The second, and in many way more important element, is tracking this effort with the same level of dilligence and seriousness of your accounting or financials. Actually making this a metric you track with results that work their way toward forecasted revenue is huge. It justifies the effort of trying to track it in the first place.

And of course at the end of the day we get to delight our customers which is why most of us started our businesses in the first place. We're learning what we can do better and reacting to it more quickly...probably because we respect the NPS system more than we ever did our customer satisfaction surveys.

I can only imagine how our organization and our work product will be over the long term.

An excellent cornerstone element!
9 of 9 people found the following review helpful
Best way to measure customer satisfaction levels! Nov. 26 2007
By Brian Shannon - Published on Amazon.com
Format: Hardcover
This is the best book I have ever seen in terms of providing the simplest way to measure the satisfaction level of a customer. Not only does the ultimate question provide that, it also is quick/easy for clients to complete. That is also important. There is lots of data to support the effectiveness of the ultimate question, which adds to its credibility. I have successfully used this methodology in our business and have received good feedback.
122 of 159 people found the following review helpful
Net Promoter is misleading and potentially dangerous May 7 2006
By G. R. Merz - Published on Amazon.com
Format: Hardcover
Frederick Reichheld's latest effort to enlighten CEOs and other business leaders is at its best mildly entertaining, but at its worst it is misleading and could result is some very costly and wrong decisions by potential users.

There are several critical weaknesses of this work-I will only mention a few.

First, there are many contradictions, reversals and logical inconsistencies throughout the book. Examples abound and can be discovered by anyone who spends a modicum of time with the book. Among the biggest is the reinterpretation of the satisfaction measure used by Enterprise Rental Car as a measure of net promoters (p.63). This is very confusing because earlier in the book the reader is led to believe that one needs to measure "recommendation" not "satisfaction" because Mr. Reichheld alleges that satisfaction is unrelated to revenue or profit growth. So why does the satisfaction measure works for Enterprise? More astounding Mr. Reichheld continually uses the Enterprise case throughout the book as justification for using the NPS measure.

Second, the entire premise of the Net Promoter approach is unsupported by third party peer-reviewed research articles in psychology, marketing research, or social science journals. All of the support provided in the book is based upon Mr. Reichheld's claims of research conducted by the firms he works with (Bain and Satmetrix) none of which has been reported in the aforementioned scientific publishing outlets. In fairness, the Net Promoter idea was originally promoted in a Harvard Business Review article, but HBR is not a research journal and its articles are not peer reviewed. Publication in HBR is somewhat equivalent to publication in Business Week or Fortune, and certainly does not qualify as scientific review.

Third, Mr. Reichheld confuses cause and effect with correlation. Recommendation is an effect not a cause. It occurs because something else (like a satisfactory experience) causes it to occur. Yet throughout the book, Mr. Reichheld continuously claims that recommendation's correlation with sales growth proves that it is a driver of growth. Correlation is simply a measure of association that says nothing about cause and effect. Consider the correlation between the number of churches in a community and beer sales. They are probably correlated but does one cause the other? More likely there is a third factor that is causing both to move together-like population growth. The same is true of the Net Promoter measure-it is likely being caused by something else-like satisfaction. Its correlation with sales growth is spurious and is not causal. If one examines the evidence provided by Mr. Reichheld in Appendix A this confusion of cause and effect is even more apparent-in every case shown, the time periods for the sales data predates the time periods when the Net Promoter Scores were collected. So what is causing what?

Fourth, the recommendation measure advocated by Mr. Reichheld is not a measure of "word-of-mouth" despite his claims to the contrary. Anyone who spends a nanosecond reading the question can see an obvious flaw in the interpretation of the measure. Reichheld's recommendation scale is basically a "unidirectional" scale-the scale is bounded by a positive (+) position (the "extremely likely" label) and a neutral (0) position (the "not at all" label) not a negative position. Nevertheless he interprets the scale as though it was actually measuring recommendation in a bi-directional manner by assuming that those who answer 0-6 are "detractors" who will spread negative "word-of-mouth" comments to others-but do they? Perhaps some of the respondents are detractors who answer at the lower end of the scale because there is nowhere else for them to answer, but it is also likely that some are truly advocates, just not extreme advocates. Mr. Reichheld claims this is a logical interpretation of what respondents mean-but is it true?

One final point concerns the claimed accuracy of the Net Promoter measure. In his classification of respondents Mr. Reichheld basically rescales an 11 point scale (0-10) into a three point scale (-1, 0, +1). By doing this the information content of the measure is reduced. The net effect of this, as any elementary statistics student can tell you, is that your confidence intervals are increased and your statistical power is reduced dramatically. This means that if the hapless reader of this book were to use the Net Promoter measure to assess the true value of their customer base they would be unable to detect any changes that would occur in an accurate way. For instance for a sample of about 750 customers, a user of the Net Promoter measure would be able to detect a %5 increase less than 10% of the time. A decision maker contemplating million dollar investments would do better by flipping a coin than relying upon a measure with these kinds of properties.
7 of 7 people found the following review helpful
Powerful message based on common sense Feb. 20 2007
By Rolf Dobelli - Published on Amazon.com
Format: Hardcover
This surprising book offers a powerful message based on common sense: Companies that treat their customers ethically and honestly will build a dedicated client base, and thus grow steadily and earn "good profits." The opposite lesson is that companies that take advantage of their customers through predatory pricing or shoddy products earn "bad profits" while building an army of disenchanted buyers who tell their friends to stay away. Fred Reichheld makes his point in black and white: Rip off your customers at your peril. He amply illustrates his message with powerful case studies, and includes details about using the "ultimate" question - "How likely is it that you would recommend this business to a friend or colleague?" - and the resulting "Net Promotor Score" to identify your best customers. We commend this book to service or product providers who want to achieve solid growth by nurturing their core consumers.
7 of 7 people found the following review helpful
Exceptional April 24 2007
By David Siegel - Published on Amazon.com
Format: Hardcover Verified Purchase
The key to this book's central idea is that you can REPLACE a large handful of other questions with this single question, so people will actually give you feedback. With a longer set of questions, you only get answers from people who enjoy filling out questionnaires! With this single powerful metric, you can watch your company go toward or away from customers. I plan on aiming part of my business in this exciting direction.


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