Why Companies That Lead In Customer Loyalty Grow Twice As Fast As Others
I´ll be blogging for the next several days from the North American Conference On Customer Management (NACCM).
Tonight I heard from keynoter Fred Reichheld, author of several books on customer loyalty including The Ultimate Question.
Fred is an advocate of the Net Promoter Score (NPS) a one-question survey that divides customers being surveyed into three categories: Promoters, Passives, and Detractors. You subtract the percentage of Detractors from the percentage of Promoters (those who would recommend you to friends) to come up with your net promoter score.
The higher the score, the better you´re performing. Lower scores alert companies to examine their customer loyalties.
The question that should be asked: How likely would you be to recommend our company to a friend?
Why is customer loyalty important? Companies who are industry leaders in customer loyalty grow at twice the rate of other companies.
Isn´t growing your company important to you?
There are four reasons why companies who are loyalty leaders grow twice as fast as others. Their customers:
Repurchase more
Buy additional lines
Give referrals
Give constructive feedback
Interestingly, Fred also pointed out that Generally Accepted Accounting Principles (GAAP) that company accountants´ use do not measure any of the above.
More to follow"?¦
Regards,
Glenn
