Welcome to the Top 5 Percenter™ Blog

What’s the One Best Predictor of Organic Growth?

by | High Performance, Profitability and Growth

Fred Reichheld, author of the 1996 bestseller, The Loyalty Effect, revealed that a “5% improvement in retention can boost profits by up to 100%.”

These numbers confirm what many of us already know—it’s phenomenally important to keep your customers coming back.

Now Reichheld is back with a new book that reveals that, of all the metrics of business, the best predictor of organic growth can be boiled down to one determinant—what he calls the Net Promoter Score.

Reichheld found, after analyzing over 24 industries, that leaders in the Net Promoter Score were growing at a rate of 2.5 times that of their competitors.

The Net Promoter Score works like this:

Customers are asked, “On a 1-10 scale, how likely are you to recommend us to a friend?”

Customers who score nines and tens are promoters. This sector is the driving force behind your success. They account for 80-90% of positive word of mouth.

Those scoring a seven or eight are satisfied—meaning indifferent. If the bank across the street is offering a one-week rate special, they’re out the door.

People who score within the zero to six range are dangerous. They voice their complaints to others and eventually become detractors of your institution. What is really tricky about this group is that they are currently adding to your profits monetarily but detracting potential profitable customers in the long run. Accountants can’t tell the difference.

What can you do with this powerful understanding about the predictability of your future success?

Constantly survey your customers to find out how you score. If you receive anything under an 8, ask questions to find out what you need to fix. Then, get busy fixing.

The key to success in business is focusing on the right things. Seems like the Net Promoter Score is where you may want to direct your focus.

More From The Blog

Your Marketing Isn’t Broken. Your Positioning Is.

Most banks never see it coming—the hidden sales leak that quietly kills momentum and stalls growth. Discover how top-performing banks fix it fast, triple cross-sales, and build teams that drive results without pushing harder.

Master the Four Levels of USPs [VIDEO]

What if you can use extreme differentiation to get 150 basis points or more on the loan side and improve your deposit pricing at the same time? If you're the kind of...

Stop Matching the Competition [VIDEO]

You deserve to get paid more. Rate matching is the most destructive force in community banking today. And because of it, as a community bank, you are underpaid for the...

How to tie everyone to PROFIT [VIDEO]

Does every team member on your team know how they tie to profit? I mean really know? When a study published in Businessweek revealed they had asked 6,000 employees, "Do...

Who Made Up That Rule? [VIDEO]

Everyone has patterns of disbelief. Some people believe that in politics, there is one side or the other, and they're unwilling to look at the alternative. Still others...