The Value of Word-Of-Mouth

Word-of-Mouth starts with a great product, and I learned in this lesson on Tesla that word-of-mouth is Tesla’s #1 source of growth (source), mainly because of the quality of their products (source).

Tesla has a Net Promoter Score of 96 (source)!

In comparison BMW’s NPS barely hits 40.

This reminds me of the importance of true fans.

A true fan is defined as a fan that will buy anything you produce. These diehard fans will drive 200 miles to see you sing; they will buy the hardback and paperback and audible versions of your book; they will purchase your next figurine sight unseen; they will pay for the “best-of” DVD version of your free youtube channel; they will come to your chef’s table once a month. If you have roughly a thousand of true fans like this (also known as super fans), you can make a living — if you are content to make a living but not a fortune.

If we apply this to the tech adoption curve, maybe your first 1000 true fans come in the form of innovators + early adopters. But to “cross the chasm” and reach the early majority + the late majority word-of-mouth is crucial. It means a company doesn’t have to spend as much on acquiring customers, whether thats through advertising or paid endorsements:

This serves as a great reminder that when building new products, one of the most important things to watch out for is word-of-mouth. If people are telling other people about your product, that is a fantastic sign.

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