I thought I learned a long time ago to stay away from words like “always” and “never.”
Bob Byrd, my business partner and friend teases me to this day about telling him in 1995 that I would never use internal email when I could walk across the hall and talk to someone! Here’s another one: “The customer is always right.” I’ve learned first-hand that you don’t have to own a live music venue (like my wife) to know that statement is not true!
But here’s something that’s always true.
In December 2003, Loyalty Rules! author Frederick Reichheld wrote an article in The Harvard Business Review entitled “The One Number You Need to Grow.” I remember how this changed the way I thought about business—and how I changed my business because of it.
As part of Reichheld’s research into customer loyalty and growth, he looked for a correlation between survey responses and actual behavior—repeat purchases, or recommendations to friends and peers—that would ultimately lead to profitable growth. Based on information from 4,000 consumers, he ranked a variety of survey questions according to their ability to predict this desirable behavior.
Interestingly, creating a weighted index—based on the responses to multiple questions and taking into account the relative effectiveness of those questions—provided insignificant predictive advantage.
However, Reichheld’s top-ranking research question was far and away the most effective across industries: How likely is it that you would recommend [company X] to a friend or colleague?
He concluded, “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.”
What? Is it really that simple? My father would say that. “Treat people honestly and go out of your way to help them.” I could just hear him reading this groundbreaking article, and then saying, “Everybody knows that.”
All week I’ve been reminded of this simple principle, and how powerful it really is.
My car mechanics, Conrad and Jerry (Integrated Motors, by the way) are so awesome that I brag about them to all my friends when they have car problems…My bragging example: “Conrad says to my daughter, Gwynedd, ‘That sounds suspicious. Don’t spend $1,400 to have the dealer fix that, bring it in tomorrow morning and we’ll take a look at it.’ The next day, Gwynedd tells me how Conrad found the problem, fixed it in less than a half hour and charged her $75, and $45 was for the part! She loves those guys. Call them right now and take your car in there.”
You get the picture. These guys now serve many of my friends because of stuff like that. I feel proud when they tell me their stories.
Think about this in your life. Who do you brag about and tell others to work with or buy from? It works with small and big business alike.
I have a CEO friend who told me of a huge client calling him and complaining of some problems that arose from his team’s work. The client was very upset. This CEO told me that he quickly apologized and owned up to the problem, then told his client how he would fix it and make it all right.
That may not sound like “great work” but I contend that it is. Even the great companies make mistakes (because people make mistakes). But going above and beyond to make things better goes a long way in getting people to talk about you and your business in glowing terms.
“The path to sustainable, profitable growth begins with creating more promoters and fewer detractors, and making your net-promoter number transparent throughout your organization. This number is the one number you need to grow. It’s that simple and that profound.” The Harvard Business Review says. So does my Dad, so does Conrad and my friend, the CEO.
They all just say and do it differently.
Now I tell my staff and my clients, “Deliver over-the-top service to naturally earn customer/client referrals.” Sure, it’s easier said than done, like anything really important. But it’s one thing that’s always true—and in this case, most important—in growing your business.
“Stand with anybody that stands right, stand with him when he is right and part with him when he goes wrong.” —Abraham Lincoln