All companies seek to grow. And growth—profitable, sustainable organic growth—occurs most often when customers and employees love doing business with a company and sing its praises to neighbors, friends and colleagues.
Most leaders want customers to be happy; the challenge is how to know what customers are feeling and how to establish accountability for the customer experience.
Conventional customer-satisfaction surveys often don’t work for this purpose, because the results don’t make it back to the front line in a timely and individualized manner to actually drive behavior change.
Some years ago, Fred Reichheld and a Bain team launched a research project to determine whether a different approach would prove more fruitful. Working with data supplied by Satmetrix, they tested a variety of questions to see how well the answers correlated with customer behavior.
As it turned out, one question worked best for most mature, competitive industries:
What is the likelihood that you would recommend Company X to a friend or colleague?
High scores on this question correlated strongly with repurchases, referrals and other actions that contribute to a company’s growth. In 11 of the 14 industry case studies that the team compiled, no other question was as powerful in predicting behavior. In two of the remaining three cases, other questions won out, but the likelihood-to-recommend question was so close to the top that it could serve as a proxy for the leaders.
The likelihood-to-recommend question, of course, is the "Ultimate Question" of the book’s title. The answers to it are the basis for calculating a company’s Net Promoter Score®. (You can read more about the research that led to the "Ultimate Question" in Chapter Two of The Ultimate Question 2.0).
To test the link between Net Promoter Scores and growth, research teams compiled scores for leading companies in a wide range of industries. What they found was compelling. Though the scores themselves varied widely by industry, Net Promoter leaders on average grew at more than twice the rate of competitors.