For any business, but especially a service-based business like insurance agencies, the ultimate (and most important) question to ask customers is, “How likely is it that you would recommend this company (agency) to a friend or colleague?”
According to Fred Reichheld, by asking this question you identify detractors, who tarnish your firm’s reputation and readily switch to competitors, and promoters, who strengthen your company with positive word-of-mouth and help generate profitable, sustainable growth.
The evolution of customer service and brand loyalty is a topic that has captured the imagination of Fred Reichheld for over 20 years. In 1996, the Bain Fellow published his first book, The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value. Recently, Reichheld (along with co-author, Rob Markey) published a newly updated version of his 2006 seminal book, The Ultimate Question (now titled The Ultimate Question 2.0). A business’s ability to not only understand the answer to this question, but to benchmark their success, led Reichheld to create and champion the Net Promoter Score System, which companies now use to define how much love their consumers have for them.
In this latest book, Reichheld provides a cohesive, comprehensive, and cost-effective management system that has three central components: categorizing customers into one of three categories (i.e. Promoters, Passives, and Detractors) through a simple survey, creating an easy-to-understand score based on that categorization, and finally, “framing progress and success in these terms, thereby motivating everyone in the organization to take the actions required to produce more promoters and fewer detractors.” In other words, your agency can have a way to track and understand your customer loyalty. Is it improving? Or declining? Once you recognize the trend, you can take steps to improve interaction between internal staff and your customers.
I first heard of this concept while listening to a podcast interview of Reichheld. After listening to the interview and reading the book, it strikes me that this is, as he states, the ultimate question—especially in today’s environment where consumers have a voice like they’ve never had before.
Agencies can no longer just sit back and assume that they are building loyal long-term customers. Everyone has more options today than ever before. It might be painful to ask the ultimate question and find out where your customers rank you on a scale of 1 to 10. But without this beginning benchmark you will have no idea what you need to do to increase customer loyalty, and ultimately long-term profits.
The book details the fundamentals of the Net Promoter System, including how to ask the question and measure the results. Part Two provides guidelines on how to implement this process within your own organization.
I highly recommend you get the book and begin asking The Ultimate Question and measuring your progress.