Book Review: The Ultimate Question 2.0
If you’re a loyalty marketing practitioner or even just follow the space, you’ve probably heard of Fred Reichheld. Mr. Reichheld, now a Fellow at Bain & Co., authored The Loyalty Effect in 1996, a copy or two of which are scattered around Kobie headquarters.
Over time, The Loyalty Effect became a de-facto primer for anyone entering the loyalty marketing business. The core principles in the book, to create sustainable competitive advantage through a systematic approach to reward and recognize shareholders, employees and customers was original in its day. The concepts were so powerful and enduring that some in our industry are attempting to re-spin the same material as if it is something new under the guise of “Enterprise Loyalty”.
Over our remembrance of loyalty marketing history, there have been two key concepts introduced since 1996. The first was “One to One” marketing, the core ideas that Peppers and Rogers have espoused for over a decade. The second was Reichheld’s 2006 book, The Ultimate Question. In it, Reichheld mused that his take on loyalty needed to be reevaluated after 10 years of market observance, and that understanding the extent to which a customer base was willing to recommend a brand to others was a measure that would be most highly predictive of true customer loyalty.
Now, an updated edition of the book has been freshly published and it is worth a read. The Ultimate Question 2.0 “How Net Promoter Companies Thrive in a Customer-Driven World” is co-authored by Rob Markey, head of Bain’s global Customer Strategy and Marketing practice, and describes how Net Promoter Score (NPS) has evolved over the past 5 years from a Score to a System.
The authors tell us that “thousands of companies” have adopted NPS and have adapted its open source format for their own purposes. The book contains a brief history of NPS, but quickly turns to share plenty of brand new material as well as case studies of companies successfully putting NPS to use in the enterprise. Charles Schwab, Apple Retail, Ascension health, and Progressive Insurance are just a few included.
In easy to read style, the authors explain NPS’s open source system, concluding that “NPS is ultimately a business philosophy, a system of operational practices, and a leadership commitment, not just another way to measure customer satisfaction”.
To extract value from NPS initiatives, the authors emphasize the importance of “closing the loop with customers”, i.e. feeding back quantitative and verbatim commentary from surveys to people on the front lines (cashiers to financial advisors) in order to understand customer needs and to cure dissatisfaction whenever possible.
Whether or not you believe that there is “just one question” to measure customer loyalty, we found The Ultimate Question 2.0 to be an engaging book.
