The Ultimate Question Archives

October 29, 2021

Here is what COP26 sponsor Unilever is telling its stakeholders about its climate actions (Surprise!)

Maurice FitzGerald / Blog, News, Strategy, World / Chief Customer Officer, customer surveys, Fred Reichheld, The Ultimate Question /

COP26 starts a few days from now. The conference has 11 corporate sponsors and I have just examined the first one on the list: Unilever. I have to say that I have been really surprised by what I found. I just don’t understand it. Please help me to work it out.

Here is what I have done: I consider that companies have three main stakeholder groups: customers, employees, and investors. I have looked at how and what Unilever is communicating to each publicly.

Customers and employees: The content for these audiences is absolutely exceptional:

The company home page leads off with climate imagery and messages about COP26. I realize these are temporary messages and don’t know what the page will look like after the summit.
The Our Strategy page is clear and lists the corporation’s five strategic initiatives. While none are directly about the climate, there is a link to more detail.
That detail is what the company calls its Compass Strategy. It is covered with lots of words jammed into two slides. A third of the second slide is about how Unilever will “Improve the health of the planet.”

Excellent stuff indeed!

The website also includes a fabulous Climate Transition Action Plan on 53 pages. The commitment and governance structures both seem strong. The two main components of the governance structure are described as follows:

“The Carbon Neutral Board: Drives delivery of our carbon ambition at the corporate and country-level and leads strategic partnerships and policy on renewables. It is chaired by our Chief Supply Chain Officer, Marc Engel.
The Sustainable Sourcing Steering Group: Supports our strategy focusing on long-term, sustainable access to our key crops. It is chaired by our Chief Procurement Officer, David Ingram.”

Investors: Timing can be a wonderful thing. Unilever reported its latest quarterly results just last week. They made the usual sort of earnings announcement and also provided a comprehensive update on the progress they are making with their business strategy:

Here is what they said about their climate efforts in the Q3 Trading Statement: “[…imagine the sound of crickets…]”
Here is what they said about their climate efforts in the 26 page presentation to investors that accompanied the Trading Statement: “[…imagine the sound of tumbleweed in the wind…]”

The semi-soundless crickets and tumbleweed are not mistakes. Unilever said nothing at all to investors on the topic. Why? Why does Unilever consider it to be the most important communication focus for customers and employees, while apparently being something that must be avoided at all costs when speaking to investors?

I don’t know.

What do you think?

December 12, 2020

(CX Strategy 13) Customer research confusion reduction – There are six types of customer survey

Maurice FitzGerald / Blog, NPS, Strategy / Chief Customer Officer, customer surveys, Fred Reichheld, The Ultimate Question /

There is quite a lot of confusion about which types of customer research are useful for predicting revenue, and which serve more general purposes. No matter what type of research you want to start, there is an important principle to observe: You must provide more value than you extract! Customers must get more benefit from your process than you do. You have to tell them why you are asking questions, what you have learned, and what you then plan to do.

The communication part is simple, though most companies do not do it. Implementation is harder. If you do not have the people and money necessary to act on what you learn from customer research, you should not do it at all. Those resources need to be guaranteed before you start, not afterwards.

Six survey types

Here are the six types of general customer experience research. Each survey type has specific uses.

Benchmark surveys are used to compare your performance with that of your competitors. If the survey and measurement system are chosen correctly, the trend in your performance compared to that of your main competitor will predict your relative market share. Benchmarks can be done at the level of your overall brand, as well as for individual divisions, products and services. The best are ‘double-blind’. This means you don’t know who answers, and the people answering do not know who is funding the research. Most double-blind surveys are panel-based, and panel members receive points or cash-equivalents for responding. The clear disadvantage is that there is no way of following up with an unhappy customer, since you don’t know who has responded.
Brand surveys are those where you ask your customers, partners or employees for their views on your company overall, as distinct from any individual product or service. If you can avoid influencing the responders, brand survey results trends can give you an indication of future revenue trend. However, since your brand survey does not cover your competitors, you don’t really know whether you are improving relative to them, so can’t predict revenue accurately If you improve, but they improve more quickly, you lose share over time.
Relationship surveys are in-depth research with your most important customers. While they are a subset of brand surveys, they require a specific methodology. They are particularly useful if your company has a small number of large customers that provide the majority of your revenue. The best relationship surveys are done face-to-face by a customer experience professional from your own company. They are more directly useful than benchmark surveys in that the input can be worked on directly with your customers. When relationship surveys are done by a function that is independent of the people being measured, they can be good revenue predictors for that customer segment.
Product / service / project surveys get feedback from customers about one of your individual product or service offerings. Using the example of Apple, a benchmark survey would cover the overall brand, while a product survey would be about an individual Mac or iPhone model, for example. They are not good revenue predictors.
Transactional surveys measure customer experience with various customer contact points. Examples would be satisfaction with a price quotation, an ordering process or with telephone support. They do not predict revenue.
Supplier surveys are often neglected. Many large companies survey their own people about the experience they have with a list of suppliers. The company’s procurement people are then measured on improving supplier performance in whatever dimensions are felt to be defective. If your company is covered by such a survey run by one of your customers, you are in luck. As distinct from all other survey types, the customer has ‘skin in the game’ and will want to work with you on improvements. Syndicated supplier surveys also exist.

Feedback welcome below. I would be happy to hear contradictory views.

October 16, 2018

#77 – The Ultimate Question? Invisible dragons, text analytics, response rates

Maurice FitzGerald / Newsletter, NPS, Strategy / Customer Experience, Net Promoter System, NPS, response rates, Surveys, text analytics, The Ultimate Question /

The ultimate question, the impossibility of proving something does not exist, text analytics, survey response rates and scores for hospitals, LinkedIn groups. Welcome to the 77th edition of my customer strategy newsletter. The five topics this week are:

Is ‘willingness to recommend’ really ‘The Ultimate Question’?
It’s impossible to prove that something does not matter to customers
Latest blog posts
Notable items from other sites – Text analytics
Looking forward – I am now a LinkedIn Group Detractor

Is ‘willingness to recommend’ really ‘The Ultimate Question’?

In their book The Ultimate Question 2.0 Reichheld and Markey refer to the research first covered by Fred Reichheld in his landmark HBR paper The One Number You Need to Grow. The research was about what single question best predicts revenue growth. Such a question is referred to as ‘The Ultimate Question’. While most people remember the answer as “How likely are you to recommend company X to a colleague or friend?” that is an incomplete picture.

Yes, the ‘Ultimate Question’ is indeed whatever single question best predicts revenue growth. And yes, the recommendation question is that question in most industries. It finished in first or second place in 11 of 14 industries among 40 questions tested. However, there are industries for which it did not finish on top. You can find full details by clicking on the link to the HBR article, and I want to mention that ‘overall satisfaction’ did not make it to the top for any industry.

So, what does this mean if you are starting to implement the Net Promoter System? It means that you are best off starting with the recommendation question as your Ultimate Question. If you ask an additional question and compare its predictive value to the recommendation question you may get a surprise. If the second question is shown scientifically to be a better predictor, then that is what you should use. At the risk of being pedantic, it is not impossible that overall satisfaction could still be the Ultimate Question for your company. However, please ensure that all departments in your company use the same question, or communication will be impossible.

Finally, some objectors to the recommendation question say, “I have come up with this composite metric that is a better predictor of market share.” That may well be the case. However, composite metrics, by definition, are not the answers to a single question.

It’s impossible to prove that something does not matter to customers

I was recently asked “But how do you know for certain that customers don’t want this?” My answer was that I could not prove they didn’t want it. I could only suggest that the science-based research that I carried out suggested that customers did not care about it.

This type of discussion can be quite problematic for customer experience leaders who have strong-willed and outspoken senior leaders to deal with. The most difficult situations arise with managers who say they have built their entire careers in one way: “I trust nothing but my own instinct!!!” (If you are a customer experience leader and your manager does not trust science or scientists, you should probably look for a new job.)

The challenge is that from a scientific perspective it is impossible to prove the absence of anything. I can state that there is a completely invisible small blue dragon hovering between you and the screen on which you are reading this. It is totally impossible for you to prove that this is not so. It is of course extremely unlikely.

We see this communication challenge from time to time in customer experience. However, it is an increasing phenomenon in society as a whole. “Unless you can prove to me that GMOs (or perhaps Glyphosate, or vaccines) pose no risk at all on their own or in combination with any other chemical, they should not be allowed.” That’s a completely impossible task as absence of risk or of anything else can never be proven. Why is it so hard to persuade people to accept scientific consensus?

Our latest blog posts

Two of the three below are new original content. The third is an edited chapter from one of our books. Older posts are still available on the blog page.

When should you ask for customer feedback? And should you survey customers at all? (5-minute read)

I have a sort of hobby: answering companies’ requests for my feedback and seeing whether they will write back to tell me what they have learned and what they are going to do to improve. They almost never do…

Contra Revenue: Could it be your easiest way to improve profit margins? (5-minute read)

On the general subject of ‘customer-centric cost reduction’ I would like to discuss an area that many medium to large companies do not examine at all, and the rest do poorly. If you have never heard of Contra Revenue, please read on…

Start-ups: Thoughts about implementing the Net Promoter System (3-minute read)

Let’s face it; most start-ups fail. Some fail because they think they are doing what customers want, but they are simply wrong. Some fail for other reasons. For start-ups, I think the Net Promoter System implementation challenge is about ‘Crossing the Chasm’…

Notable customer experience items from other sites

Thematic & Alyona Medelyan: Amazing article on text analytics

This is without doubt the best article I have read about text analytics ever. Regular readers will know that I consider it to be the top technical challenge we face in customer research. We tend to send customers long feedback requests with lots of rating questions simply because we don’t yet trust text analytics. Please read the article. It will take you about ten minutes and I guarantee you will learn something new. Read it here.

Business Broadway: The relationship between survey response rates and survey ratings

It is always interesting to read well-structured research that produces opposite results to prior research. In this case, Bob Hayes wrote an article way back in 2012 that shows that the more people respond, the better the ratings. My own research at HP on NPS ratings and response rates showed the opposite, as people who really liked us seemed disproportionately likely to respond when we had low response rates. I wonder whether there is something specific to hospitals that mean that Bob’s results follow a similar but opposite logic. Could patients who were upset with their experience at a hospital be more likely to respond than those who were happy? Please let me know what you think. Read all about it here.

Looking forward

I have spent / lost quite a bit of time over the last three weeks trying to persuade LinkedIn to reverse the changes they have made to Group management. I had a teleconference with representatives of the product team last week and they committed to reverse one of the changes, though with no date attached. That’s really not good enough. The 102,000 members of the Customer Experience Management group that I manage need better. Since the changes were implemented user interaction with new posts has dropped off a cliff. As I write this there are a total of two comments on the last 50 articles that have been posted. The tools I used to use to stimulate conversations and limit the appearance of irrelevant stuff have almost all disappeared. Disappointing. This means that I have to change my NPS status for LinkedIn Groups from Promoter to Detractor. I definitely would not recommend them, including my own group.

On a more positive note, I am running a free one-hour webinar on NPS for the European arm of the Association of Field Service Managers this Thursday afternoon my time, so you should have heard about it if you are an AFSMI member.

Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions are available from the major stores only.

Customer Experience Strategy – Design & Implementation

Net Promoter – Implement the System

Customer-centric Cost Reduction

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Color edition)

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Black & White edition)

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