Hi there,
As you may know already, we’re hosting a 3-day conference in Amsterdam in September for commercial and experience leaders.
We’re so excited to be bringing together this community, and tickets are selling fast! 🎉
We can now announce this year’s core focus topic will be earned growth.
Earned growth is the most important evolution of Net Promoter, and the most important thing for CX professionals to learn right now.
It’s all about:
- Linking experience data to financial results
- Creating healthy, sustainable revenue growth
- Driving referrals and upsell through experience
Our speakers and expert-sessions this year will teach the theory and practical methodology of earned growth through engaging stories, powerful examples, and their real experiences.
What is Earned Growth?
In “Winning on Purpose”, Fred Reichheld & Maureen Burns introduced a new metric: Earned Growth.
Earned growth measures the revenue growth generated by returning customers and their referrals.
Imagine you have two companies, A and B, both with a 20% annual revenue growth rate.
Company A gets most of its growth through Net Revenue Retention (i.e. account expansion from existing customers) and Earned New Customers (i.e. customer referrals). This company has good growth—it’s earned, it’s less risky, it’s sustainable and it shows a coherency between customer expectations and product value.
Company B is growing at the same rate, but they buy their growth. The majority of that 20% comes from new marketing and sales campaigns. This growth can be manufactured, by spending more on acquisition, by heavily discounting, and by adding risk into the customer base. Such a high growth rate is often unsustainable without outside capital.
Which company would you rather be?
Warby Parker, an American company with $500m in annual revenue currently earns 90% of new customers through referrals and a 100% sales retention rate over 4 years. That’s impressive loyalty-led growth—and it’s extremely hard to compete against.
Earned growth helps companies to prioritize sustainable, experience-led growth like Warby’s.
Interesting earned growth talking points:
- Proving the ROI of CX: As Maureen mentioned on our podcast, earned growth was developed as an accounting-based metric. It ties experience directly to financial results—giving an organization a clear picture of something all CX pros are desperate for: the ROI of experience quality.
- Earned or bought: The metric forces each customer to be defined as ‘earned’ or ‘bought’, which in turn forces the discussion around acquisition costs and future profitability.
- Net Promoter is being misused: Self-reported scores and misinterpretations of the NPS framework have led to confusion and diminished credibility. As Fred notes in is HBR article, linking NPS to employee bonuses, no safeguards to prevent ‘pleading, bribery and manipulation’ and no details on how surveys have been conducted, all have turned NPS into a vanity metric. Earned growth resists all of these manipulations to truly illuminate the quality of a company’s growth.
- Referrals are under-appreciated: Firms today undervalue referrals. They treat them as icing on the cake rather than an essential (perhaps the most essential) ingredient for sustainable growth. Earned growth brings them to the forefront of C-Suite strategy.
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At Monetize! 2022, we’ll focus on the fundamentals of Earned Growth in the B2B world.
We’ll also tackle the core challenges that companies may face when implementing and growing an experience program that ties directly to financial results.
Reach out to us to chat or get your early-bird ticket here. Group discounts are currently available, so why not bring your team as part of their learning budget this year?
