Harvard Business Review | HBR Recommends

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Don’t Underestimate the Power of Customer Referrals

Companies that systematically track referral behavior uncover a powerful, underutilized growth engine.

An analysis of more than 10 million consumers reveals that while about 20% of new customers come through referrals, they account for 72% of the profits all new customers generate. Referred customers cost less to acquire, stay longer, buy more, and refer more high-value customers to your company. Yet most firms overlook them.

By shifting focus from buying customers to earning their advocacy, companies improve margins and build more-durable, cash-generating growth businesses.

by Fred Reichheld, Jamie Cleghorn and Wojtek Kokoszka

Read the full article here

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