What if you knew the best predictor of future growth for your business? Think about it. If you knew the best predictor, you could look into it, see how you’re doing with regard to it and focus much of your time and energy on it.
This is on my mind this week because recently a client asked me to help them think through the various predictors of growth in their particular business. This request triggered memories of an article I read almost 10 years ago in the Harvard Business Review. The article was “The One Number You Need to Grow” by Fredrick F. Reichfield. I highly recommend this article to my friends and colleagues.
I reread the article, relaxed and leaned back in my chair to think about what I had just read. I do some of my best thinking leaning back in my chair with my eyes closed and arms folded. So, I assumed this proven thinking position and here are two main thoughts that entered my mind. First, Mr. Reichfield didn’t just identify the “various” predictors of business growth; he identified the one thing that will most likely predict growth. Second, the idea presented in the article was a great idea 10 years ago and it’s still a great idea today – perhaps even better due to the social media aspect of learning about how a business is doing nowadays.
Here’s the good news for us. Mr. Reichfield took the time to do some excellent work, over two years of research according to the article, and eventually reduced his findings to a single question referred to as the “would recommend” question. Reichfield set out to discover at least one question for each industry that would predict growth in that particular industry. As it turned out, he discovered the one question that was an excellent predictor for most industries. The question to be asked of current customers is: How likely is it that you would recommend our company to a friend or colleague?
That’s it! He then classified the responses to this question into three categories: Promoters, Passively Satisfied customers and Detractors. In a nutshell, if you focus on improving what he refers to as your Net-Promoter percentage (the percentage of customers who are Promoters minus the percentage who are Detractors), your company will likely grow.
There are many reasons this question serves as such a good predictor of growth. Basically in order to be a Promoter of your company, people must be willing to put their reputation on the line – and they will do this only if they feel intense loyalty.
So, why not take the time to ask your customers this question? Listen carefully to the good, the bad and the ugly. Then use what you learn to get every employee in your organization focused on doing whatever it takes to get as many positive responses to this question as possible. How about it? Would you recommend this weekly column to your friends and colleagues?
Chris Crouch is CEO of DME Training and Consulting and author of several books on improving productivity. Contact him through www.dmetraining.com.