Predicting Your Future Growth

Source: Ric Payne’s Blog—Make a Difference

Ric Payne suggests a method called the Net Promoter Score, developed by Fred Reichheld (of management consulting firm Bain & Company), to improve the referrals you get from your clients.

Ask your clients to score the following question:

What is the likelihood that you would refer us to a prospect?

Score on a scale of 0 to 10, where 0 indicates not at all likely, and 10 indicates highly likely.

Those who score 9 to 10 are classified as “promoters.”

Those who score 7 to 8 are classified as “passives.”

The rest are classified as “detractors.”

The detractor group may be profitable, but not beneficial in the long run.

The NPS is the difference between the percentage who are promoters and the percentage who are detractors.

You must increase the number and percentage of promoters and reduce the number of detractors.

Reichheld and his colleagues at Bain have researched this theory and conclude, “It is not good enough just to measure the percentage of promoters and to seek to increase that number alone. The companies that have achieved most success are those that have not only improved the percentage of their promoter cohort but have also reduced the size of the detractor cohort.”

Ric provides resources for CPAs to help their clients implement this method. We also think CPAs can apply it to their own clients.

Read Ric’s June 29, 2008, blog entry, A Simple Metric That is a Great Predictor of the Future of Your Business, by clicking here.

From Ric Payne’s Blog—Make a Difference, http://principa.net/blog/index.php.

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