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One Number to Know: What Your Customers Tell Their Friends About You

May 19th, 2010 · Add Comment

According to Frederick F. Reichheld (article in Harvard Business Review) “if growth is what you are after, you won’t learn much from complex measurements of customer satisfaction or retention. You simply need to know what your customers tell their friends about you….”.

Reichheld conducted a survey with more than 20 questions in order to determine which question correlates most with the future growth of the company. It turned out that “…the evangelistic customers loyalty is clearly one of the most important drivers of growth”.

Reichheld states that the following survey question is by far the most important and the most reliable predictor of future growth:
“How likely is it that you would recommend company X to a friend or colleaugue” (on a rating scale from 0 – 10 (10 = extremely likely to recommend, 5 = neutral, 0 = not at all likely)).

Reichheld recommends to calculate, track and focus mostly on those customers who are extremely likely to recommend your company: customers that answered the above question with 9 or 10. He calls them “promoters” and considers them as a sort of “marketing department” of the company…

If I may add, this is just another research evidence that customer loyalty and WOW! factor are going to play increasingly important role in any business in the future…

Tags: "Know-Wow" · Viral Marketing

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