Curious Leadership with Dominic Monkhouse E179 | Why Referrals are Essential for Business Growth and Reputation with NPS creator, Fred Reichheld
How loyal are your customers and employees? How likely are they to refer your organisation to their colleagues and friends?
This is the basis of the Net Promoter System, a way of measuring customer retention devised by Fred Reichheld in the 1990s. Because Fred realised that if you increase customer retention, your profits will grow.
Fred assumed that having discovered this and told people about it that all businesses would instantly put customers first. That what he’d come up with was a one and done thing. He hadn’t realised how hard it would be to change mindset.
So Fred invented the Net Promoter Score so that businesses could measure this thing that drives retention. And he found that it all boils down to one simple question - would you recommend X company to a friend or colleague?
It’s that simple. Yet here we are, some 20+ years later still arguing about NPS.
So Fred’s written another book called - Winning On Purpose, The Unbeatable Strategy Of Loving Customers (link below), and it’s a more accountancy based metric i.e. earned revenue or earned growth rate.
This is a truly fantastic conversation with Fred, we enjoyed it immensely, we’re sure you will too.
On today’s podcast:
- The Earned Growth Rate
- Net Promoter System
- Likelihood to recommend
- Be humble to keep customers
- Why referrals are earned growth
Links:
- Fred Reichheld
- Article: The One Number You Need to Grow
- Twitter – @FredReichheld
- LinkedIn – Fred Reichheld
Website: