The One Number You Need to Grow
Many companies invest heavily in measuring customer satisfaction, assuming that increased satisfaction leads to improved customer loyalty and hence growth. But most satisfaction yardsticks are complex and yield ambiguous results. Worse, they don't necessarily correlate to growth or profits.
There's good news: You don't need expensive surveys and complex statistical models. You only have to ask customers one question: "How likely is it that you would recommend our company to a friend or colleague?" The more "promoters" your company has, the bigger its growth. Why? When customers recommend you, they're putting their reputations on the line. And they'll take that risk only if they're intensely loyal.
Today's Management Tip of the Day was adapted from the HBR article, "The One Number You Need to Grow," by Frederick F. Reichheld.
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