Posts tagged ‘Frederick Reichheld’
If you want to grow your client’s business, you have to ask the right question (and there’s only one).
In December 2003, Frederick Reichheld wrote an article in the Harvard Business Review called “The One Number You Need To Grow.” He concluded (based on two years of research) that companies can throw out all the convoluted metrics they have invested in to predict results. The answer to a single, simple question separates companies that grow from those that don’t. And that question is would the company’s customers recommend it to a friend?
This obviously has enormous ramifications in the digital age. Consumers now have the ability not only to recommend a product to a friend, but to recommend (or warn against) it to thousands or even millions of people. The means of mass communication have been democratized. Shoppers don’t make decisions based on information from ads; they get it from consumerist.com and a host of other websites that catalog the authentic opinions of people just like them.
Smart companies are building in mechanisms to their communication plans that encourage consumers to talk to each other–of course they’re only smart if the product they’re delivering is good enough to warrant a recommendation. Putting together a brilliant digital branding experience that will encourage conversation may be the worst thing a company can do if its customers are inclined to say nasty things about its products. Thus “The One Number You Need To Grow” is not only a startlingly simple way to approach measurement and reporting, not only can it define a company’s communication strategy, it frankly can and should form the basis of operational and product development decisions.
This is why agencies can no longer be in the business of selling advertising ideas alone. They must be in the business of selling advertising ideas that grow directly out of business solutions that resonate with consumers. Clients who don’t want to change anything they’re doing except their advertising and dramatically increase sales are almost invariably disappointed. The answer they are looking for lies in a single question.