customers are important
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Customer Are Important?And what can you do about it?
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Thursday, February 25, 2010
Why are Customers Important?
• Current customers are your most reliable and cost-effective, source of future revenue
-100
0
100
200
300
400
Cust BasePremium PriceX-Sell/Up-SellEase of ServicePromoter
Valu
e ($
)
Time
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Net Promoter Score*• The concept of Net Promoter Score, first described in
The Ultimate Question - Driving Good Profits and True Growth by Fred Reichheld, which suggests that one question, “How likely is it that you would recommend this company to a friend or colleague?,” produces a clear measure of an organization's performance
• Bain & Company analysis shows that value-creating companies, companies that achieve long-term profitable growth, have Net Promoter Scores two times higher than the average company. And NPSSM leaders outgrow their competitors in most industries-by an average of 2.5 times.
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*Source: The Ultimate Question
Thursday, February 25, 2010
“How likely is it that you would recommend this company to a
friend or colleague?”
Promoters - Detractors = NPS
100 54321 9876
Extremelylikely
Not atall likely
Detractors Passives Promoters
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What can you do about it?• Develop customer marketing strategies for
each sector
- Maximize Promoter quantity and profitability
- Minimize Detractors quantity and investment
- Find more Promoters
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Profi
tabi
lity
Hig
hLo
w
Detractor Passive Promoter
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Optimize customers by profitability and NPS
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Implementation• Ask every customer the question - you need
more than a sample
• Base compensation/bonuses on NPS performance
• Use position on the grid to drive messaging
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JTH Consulting LLCJames Hipkin415-505-0632
jhipkin@gmail.com
Thursday, February 25, 2010
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