Book Review: The Ultimate Question
The Ultimate Question by Fred Reichheld (Harvard Business School Press, 2006), hardcover, 210 pages
(Oct. 6, 2008) What do nonprofits and for-profits have in common? According to The Ultimate Question, written by Fred Reichheld, director emeritus and fellow at Bain & Company, customer loyalty is at the core of creating and maintaining successful relationships with constituencies. Certainly that can be said of your nonprofit, as well as any well-run company with an eye on the bottom line.
Reichheld further contends that a satisfied customer is the best spokesperson for what an organization has to offer. To quantify this proposition, Reichheld has developed an indicator known as the Net Promoter Score, or NPS. Simply put, you take the percentage of customers who put great value what on you offer (P) and subtract detractors, or those who do not support your organization (D), arriving at NPS: P–D=NPS.
The Ultimate Question is written as a guide for profit-making corporations and, for that reason, its case studies are from that sector. However, there is a lot for nonprofit organizations to learn from the experiences of the international corporations cited in the book. Enterprise Rent-A-Car, for example, knows the value of customer loyalty. It resolves customer issues at the rental counter and, for this reason, is able to spend less money on advertising than its competitors.
The chapter on customer satisfaction surveys should be of interest to all fundraisers. Reichheld writes that satisfaction surveys are developed by marketing departments that also crunch the data and share the information with higher-echelon management. By the time these surveys are reviewed, massaged and distributed to line staff, they are probably of little or no value. By contrast, Enterprise Rent-A-Car manages its customer satisfaction at the local level, giving it greater ability to meet articulated customer needs. In other words, Enterprise passes the “ultimate question” with flying colors: “Would you recommend us to a friend?”
Throughout the book, Reichheld cites examples such as Enterprise, American Express and JetBlue Airways as organizations that are using the “ultimate question” to their—and their customers’—advantage.
While the book is written for leaders in the for-profit sector, there is a brief section in the final chapter that suggests applications of the Ultimate Question for the nonprofit community as well. From my perspective, I plan to take Fred Reichheld’s advice to heart. At the end of the day, what more do I need to know than whether or not someone would recommend my agency to a friend?
Arthur Makar, CFRE, executive director, The Caring Community in New York, and adjunct faculty member, New York University George H. Heyman Jr. Center for Philanthropy and Fundraising.
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