• Document: The One Number You Need to Grow
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www.hbr.org If growth is what you’re after, you won’t learn much from complex measurements of The One Number You customer satisfaction or retention. You simply need to Need to Grow know what your customers tell their friends about you. by Frederick F. Reichheld Reprint R0312C If growth is what you’re 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. The One Number You Need to Grow by Frederick F. Reichheld The CEOs in the room knew all about the they were doing and the opportunity to learn power of loyalty. They had already trans- from successful peers. formed their companies into industry leaders, The survey was different in another impor- COPYRIGHT © 2003 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. largely by building intensely loyal relation- tant way. In ranking the branches, the com- ships with customers and employees. Now the pany counted only the customers who gave chief executives—from Vanguard, Chick-fil-A, the experience the highest possible rating. State Farm, and a half-dozen other leading That narrow focus on enthusiastic customers companies—had gathered at a daylong forum surprised the CEOs in the room. Hands shot to swap insights that would help them further up. What about the rest of Enterprise’s cus- enhance their loyalty efforts. And what they tomers, the marginally satisfied who contin- were hearing from Andy Taylor, the CEO of ued to rent from Enterprise and were neces- Enterprise Rent-A-Car, was riveting. sary to its business? Wouldn’t it be better to Taylor and his senior team had figured out track, in a more sophisticated way, mean or a way to measure and manage customer loy- median statistics? No, Taylor said. By concen- alty without the complexity of traditional cus- trating solely on those most enthusiastic about tomer surveys. Every month, Enterprise polled their rental experience, the company could

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