The One Number You Need to Grow Your Business

The One Number You Need to Grow Your Business

The One Number You Need to Grow Your Business

This guy "Frederick Reichheld" discovers one question that can reveal if customers are lying to you or not.

So, it is 2001, and Frederick Reichheld is a consultant at Bain & Company and he’s staring at a massive problem. Companies are spending millions on customer satisfaction surveys that nobody trusts. CEOs are literally throwing these reports in the trash because they’re too complex to understand. And the crazy part is, customers who say they’re satisfied are still leaving for competitors.

 

So Frederick launches this two-year research project with one goal in mind: to find a way to cut through all the customer survey crap and figure out who is actually loyal. His team surveys 4,000 people across 14 different industries, asking tons of different questions. Then they track what happens next.

 

What they find is wild. Most survey questions have zero connection to what customers actually do. People say they love your company and then never buy from you again. But Fred keeps digging through the data, and something happens that changes everything.

 

One question keeps showing up as the best predictor of customer loyalty. Not “Are you satisfied?” Not “Would you buy again?” It’s: “How likely are you to recommend this company to a friend?”

 

And the reason it works is genius. When someone asks you if you would recommend something to a friend, you can’t fake that answer. You’re putting your own reputation on the line.

 

Fred realizes he can score this on a scale of 0 to 10. Anybody who gives a 9 or a 10 becomes a promoter, and they’re genuinely loyal. Seven or eight are passives; they’re neutral. Zero to six are detractors, and they are actively unhappy.

You subtract the percentage of detractors from the percentage of promoters, and boom—you get your Net Promoter Score.

 

In 11 out of the 14 industries they studied, this single question beat every other metric at predicting growth. Companies with higher NPS scores were growing faster. Plain and simple.

Frederick published this in Harvard Business Review in 2003 with the title 

"The One Number You Need to Grow".

And it absolutely exploded. Today, most companies use a version of Net Promoter Score, and it has become the standard way businesses measure customer loyalty.

Shalisha

Shalisha

Digital entrepreneur

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