Tuesday, February 12, 2008

The Ultimate Question

I am just back from a Kitchener Ranger game courtesy of KPMG. Nasty drive back.

I recently read a book called, The Ultimate Question, Driving Good Profits and True Growth by Fred Reichheld. He also wrote the the Loyalty Effect. Reichheld is a huge advocate of offering premium customer service and measuring this as one of the driving forces of any company.

Most of the points that he makes in the book are that there are bad profits and good profits. Bad profits are those that are short term and can detract from and strangle a company. Good profits are those that are sustainable.

Lately, I have been thinking a lot about strategy and mission statements. He really points to what the ultimate mission statement is for customer service organizations and that is simply the golden rule -- how do you want to be treated?

His book talks about the ultimate question to ask customers which is, how likely is it that you would recommend company X to a friend or colleague? This tends to be a more accurate indicator of customer satisfaction than just asking them how satisfied they are with a customer.

He also talks about closed loop feedback. Whenever there is error or a problem, closing the loop very quickly makes total sense. Although I dislike the paperwork in ISO9000, closed loop is one of its positive attributes.

1 Comments:

At 1:33 PM, Anonymous Alex Revai said...

Jim,



I don’t particularly like anything ultimate. Ultimately, we are dead. L



Having said that, the problem with any good business advice or philosophy (such as the book you referenced talks about) is that they fly in the face of business reality. The (sad) reality is, that most businesses are driven by greed, short term results and, by and large, without social responsibilities. Mission statements, for the most part, are just lip-service and they are full of politically correct, popular buzzwords, such as “work-life balance”, “our most important assets are our people” and the likes.



As long as we measure success by quarterly profit increases (not just profit, but INCREASED profit), and we assume that there is limitless growth potential (in the markets), I don’t see much opportunity for changes.



Regarding the jest of your blog, studies have long indicated the fact that it’s customer loyalty and not customer satisfaction that is the key to success.



Regards,

Alex



Alex Revai

Productivity Solutions

Tel: 416-272-6972

 

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