Who do they love?
Interesting article in Direct magazine on loyalty and customers (read, attendees).
After writing a couple of books about loyalty, Frederick F. Reichheld, a director emeritus and fellow at Boston-based strategy consultancy Bain & Co. found he had a problem—his theories were sound, but no one used them.
"In fact, a key question his research had focused on, "How satisfied are you with [company X's] overall performance?" turned out not to be a significant predictor of growth.
"But The Loyalty Acid Test, a survey he designed with other Bain associates, hit upon another question, "How likely is it that you would recommend [company X] to a friend or colleague?" When customers were asked to rate this question on a scale of 0 to 10, Reichheld discovered that those offering a 9 or 10 ranking showed the strongest correlation of repurchase and referral rates. Conversely, those that offered a ranking of 6 or below were labeled "detractors" — customers likely to flee the company at the first sign of a better opportunity."
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After writing a couple of books about loyalty, Frederick F. Reichheld, a director emeritus and fellow at Boston-based strategy consultancy Bain & Co. found he had a problem—his theories were sound, but no one used them.
"In fact, a key question his research had focused on, "How satisfied are you with [company X's] overall performance?" turned out not to be a significant predictor of growth.
"But The Loyalty Acid Test, a survey he designed with other Bain associates, hit upon another question, "How likely is it that you would recommend [company X] to a friend or colleague?" When customers were asked to rate this question on a scale of 0 to 10, Reichheld discovered that those offering a 9 or 10 ranking showed the strongest correlation of repurchase and referral rates. Conversely, those that offered a ranking of 6 or below were labeled "detractors" — customers likely to flee the company at the first sign of a better opportunity."
Comments?
To receive a weekly blog update, e-mail Sue.
