The most important number

By October 24, 2006blog

If you could pick only one number to measure the vibrancy of an organization, what would it be?


Most business people I know pick growth rates or market share.

Three years ago I picked referral rates… the percentage of clients that recommend us to other people. It seemed like the one number that said something about how much people liked our product, people, and pricing.

To drive this number, I started some unconventional experiments. They were based on my experiences of what causes me to like a company more.

1. We cut RegOnline’s advertising expenditures and instead hired more friendly, caring, smart support team members.
2. We eliminated commissioned sales compensation and hired more people who got pleasure from taking great care of clients (which several of my CEO friends told me I was crazy for not having sales commissions).
3. We even eliminated our Referral Incentives, and replaced it with a Thank You program where referrers unexpectedly received a gift after referring someone.

As we held our breath and watched what happened, our referral rates almost doubled! I thought I was really on to something original. Then a friend sent me a Harvard Business Review article called “The One Number You Need to Grow” by Fred Reichheld… the “one number” being a factor of “Would you recommend us to a friend?” The article outlines the strong correlation between a company’s Net Promoter Score and their growth rate. In fact, huge companies like General Electric are implementing this new theory company wide.

I’m excited to see this, because I love being inspired by more companies like Southwest Airlines, and Costco, Whole Foods and Nordstroms who create raving fans out of their customers… and experience unprecedented growth in their industries!

I’d love to share more ideas and inspiration. What causes your clients to recommend your organization to more friends?

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