The one number you need to grow

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Tuning into the voice of your customerLearning from customer defectionsLead for loyalty Customer Behavior and Loyalty in Retail Banking

Many companies—striving for unprecedented growth by cultivating intensely loyal customers—invest lots of time and money measuring customer satisfaction. But most of the yardsticks they use are complex, yield ambiguous results, and don’t necessarily correlate to profits or growth.

The good news is: you don’t need expensive surveys and complex statistical models. You only have to ask your customers one question: “How likely is it that you would recommend our company to a friend or colleague?” The more “promoters” your company has, the bigger its growth.

Why is willingness to promote your company such a strong indicator of loyalty—and growth? Because when customers recommend you, they’re putting their reputations on the line. And they’ll take that risk only if they’re intensely loyal.

By asking this one question, you collect simple and timely data that correlate with growth. You also get responses you can easily interpret and communicate. Your message to employees—“Get more promoters and fewer detractors”—becomes clear-cut, actionable, and motivating, especially when tied to incentives.

Read the full article on Harvard Business Online.