NEW BOOK
“The Ultimate Question: Driving Good Profits and True Growth,” by Fred Reichheld, Harvard Business School Press, $24.95
If you want to know about customer loyalty ask the customer the Ultimate Question: “Would you recommend us to a friend?” The answer lets companies track promoters and detractors and “produces a clear measure of performance in its customers’ eyes.”
The UQ metric is simple, yet complex. In its simplest form, every firm’s customers fall into three categories: promoters, passives and detractors. On a 10-point scale, promoters are 9s and 10s, detractors 1s and 2s.
The UQ uses a score derived by subtracting the percentage of detractors from the percentage of promoters, called the Net Promoter Score. The higher the score, the more loyalists and fewer detractors.
Reichheld’s 10 years of research shows that the average firm’s score is 5 to 10. Firms with efficient growth engines score around 50. Harley-Davidson’s is 81; Costco’s is 79; Southwest Airlines scored 51.
–Jim Pawlak, BizBooks
NEW BOOK
“The Power of Feedback: 35 Principles for Turning Feedback From Others Into Personal and Professional Change,” by Joseph Folkman, John Wiley & Sons, $21.95
A reluctance to ask questions stems from a person’s view of feedback. If taken negatively, it’s criticism. Positively, feedback is learning if you use it to “feedforward,” or use it to grow. Principle 5 is worth committing to memory when feedback is negative: “All perceptions are real, at least to those who own them.”
The trick to turning it from negative feedback to positive feedforward is finding out the “why” of the perceptions. Don’t take it personally. Open the communications channel. Discussion, not debate. Be open-minded to different perspectives. Explain yours.
When giving feedback: Think about what you say and how you say it. Principle 10: Once people form an impression, they are not as open to information that contradicts the original impression. Getting work done is based on collaboration and networking. A “have you looked at it this way” response is a constructive way to open the communication channel to feedforward.
–Jim Pawlak, BizBooks
