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Ultimate notes

Notes on The Ultimate Question, by Fred Reichheld

  • The average Net-Promoter Score (NPS) for U.S. companies is less than 10%
  • Senior managers are delusional. 96% of senior managers said they were “focused” on the customer. 80% believed they delivered a “superior experience” to their customers. But when their customers were surveyed, only 8% of their companies were given a superior rating.
  • Measurement is not enough. Pointless to set up an NPS measurement system if you don’t understand that delighting customers is the only path to true growth.
  • If you do get it, three things you must do: (1) design value propositions that focus on the right customers, then create a complete customer experience capable of delighting each targeted segment, (2) deliver those propositions end-to-end, with all employees pulling in the same direction, (3) do all this over and over again.
  • Good design is not enough. What counts is a company’s ability to deliver those propositions consistently.
  • Delivery depends primarily on the spirit, enthusiasm, and cooperation of frontline employees - the people who actually produce the goods, or deliver the services and deal with the customers.
  • And there's the problem. Bain surveyed North American employees who had worked ten years or more for the same company. Only 39% trust their leaders to communicate openly and honestly. Only 33% believe that employee loyalty at their company is valued and rewarded. Only 28% say that their company values people and relationships above short-term profits. Only 19% provide enthusiastic referrals for the company that employs them.
  • To build an organization that creates promoters: (1) send the right messages to your people, (2) hire and fire to inspire, (3) pay well and invest in training, (4) keep teams small to enhance accountability and service, (5) link measures and rewards to company values.
  • Don't tread on Fred. On Claes Fornell (principal author of the American Customer Satisfaction Index): "the Journal reported that Fornell had been buying or short-selling shares of companies surveyed by the ACSI prior to releasing the data for publication". On JD Power: "There are J.D. Power winners for flights over five hundred miles and flights under five hundred miles. Perhaps we'll soon see awards for the highest customer satisfaction among bankrupt airlines."

See also:
Excerpts from Chapter 1 (inc a link to a downloadable pdf version)
Reichheld on Loyalty, the war on customers, wrong yardsticks, keeping it simple
Fred Reichheld's net promoter slide show. A 3-minute presentation.
A Survey of Surveys
The Net Promoter Forum


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