Bain's One Number to Grow
Recently, I've had an influx of work from companies in the business of selling ideas, rather than widgets, or even software -- and I am wondering if this may mark a fundamental shift in the market for value-added marketing writing. One of these clients is a boutique operations consulting company, populated mostly by MIT Ph.D.s and focused on applying advanced quantitative methods to business problems. They're an outsource to one of the largest and oldest mainstream management consulting firms. Two other of these clients develop basic science for the federal government in areas of homeland security.
A lot of companies work overtime trying to sell big ideas that are hard to explain. It's much harder to come up with important ideas like this one that are easy to explain.
I like working for these clients because it's immensely interesting. It also lends itself to where I think I have a comparative advantage -- the ability to express ideas in a simple and direct way that people get.
So, rather than wait around for more of these kinds of clients to just show up, I want to start something new on this blog as a way to engage with them sooner in the arena they find most comfortable -- ideas. It occurs to me that some of the writing I find interesting on the web might also be interesting to them. I can bring that writing to their attention here, along with whatever comments I may feel compelled to offer.
So here goes . . .
Let's start with a article that's been on the Bain website for over a year now, and one I think is extremely important: "One Number to Grow," by Frederick F. Reichheld and James Allen. It basically says that customer satisfaction -- asking customers how happy they are with you -- is not a very meaningful number. Even customers in the 90th percentile of customer satisfaction may desert you in droves, these authors find. A much better number is "net promoters." This is the number of people who would recommend you to a friend minus the number of people who would not. It turns out the net promotion number is a much better indicator of not only customer loyalty, but also of business growth. That's because -- no big surprise here -- word of mouth is one of the best ways to market.
Thoughts? Comments? Personally, I think it's a killer idea. As a communicator, what I love about it is that it is both simple and sophisticated. It's the kind of idea that makes people anywhere say, "Gee, I wish I had thought of that." It's also an example of what every company needs to prove it's smarter than the competition. A lot of companies work overtime trying to sell big ideas that are hard to explain. It's much harder to come up with important ideas like this one that are actually quite easy to explain.
