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Customer Are Important?
              And what can you do about it?



                                              1

Th...
Why are Customers Important?
                 •          Current customers are your most reliable and
                    ...
Net Promoter Score*
                 •      The concept of Net Promoter Score, first described in
                        T...
“How likely is it that you would
                      recommend this company to a
                          friend or col...
What can you do about it?
                 •         Develop customer marketing strategies for
                           ...
Optimize customers by
                                         profitability and NPS
                                 High
...
Implementation
                 •      Ask every customer the question - you need
                        more than a samp...
JTH Consulting LLC
                                   James Hipkin
                                  415-505-0632
        ...
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Customers Are Important

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Everyone accepts that customers are important. But why are they important and how do you make this meaningful, how do you use this idea to drive strategy? This brief presentation provides two ideas to consider that will help you understand this important issue.

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Transcript of "Customers Are Important"

  1. 1. Customer Are Important? And what can you do about it? 1 Thursday, February 25, 2010
  2. 2. Why are Customers Important? • Current customers are your most reliable and cost-effective, source of future revenue 400 Promoter Ease of Service 300 X-Sell/Up-Sell Value ($) Premium Price 200 Cust Base 100 0 -100 Time 2 Thursday, February 25, 2010
  3. 3. 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. *Source: The Ultimate Question 3 Thursday, February 25, 2010
  4. 4. “How likely is it that you would recommend this company to a friend or colleague?” Promoters - Detractors = NPS Not at Extremely all likely likely 0 1 2 3 4 5 6 7 8 9 10 Detractors Passives Promoters 4 Thursday, February 25, 2010
  5. 5. 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 5 Thursday, February 25, 2010
  6. 6. Optimize customers by profitability and NPS High Profitability Low Detractor Passive Promoter 6 Thursday, February 25, 2010
  7. 7. 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 7 Thursday, February 25, 2010
  8. 8. JTH Consulting LLC James Hipkin 415-505-0632 jhipkin@gmail.com 8 Thursday, February 25, 2010
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