Do the Math
A simple equation can help boost your sales.
Take the percentage of your customers who would recommend your
company to a friend, then subtract the percentage who would not.
The result is your net promoter score. In The Ultimate Question (Harvard Business
School Press, $24.95), Fred Reichheld says this number is vital for
businesses, and he shows how to calculate it--and raise it.
U.S. companies' average net promoter score falls short of 10
percent, Reichheld says. Some companies score much higher, however.
To calculate yours, ask customers "How likely is it you would
recommend this company to a friend?" soon after each sale.
Have them rate you on a zero-to-10 scale. Consider nines and 10s
promoters, and anyone answering below five a detractor. Then try
different approaches to raising your score until you find what
works.
Survival Story
Every company that lasts for a long time must learn to survive in
changing environments. In Dealing With Darwin (Portfolio, $25.95),
Geoffrey A. Moore continues the bestselling series begun with
1991's Crossing the Chasm with this discourse on
adapting an existing business to new obstacles. The key, Moore
says, is to redirect resources from activities that don't
affect profits to those that do. Moore frames his discussion with a
case study of tech titan Cisco Systems, but his insights apply to
companies at almost every stage.
Mark Henricks is Entrepreneur's
"Staff Smarts" columnist.
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