Too many companies squander money and momentum by chasing people that will not be repeat customers. The key for a brand to maximize growth is to devote resources to brand advocates or ‘apostle’ consumers, said Michael Silverstein, Boston Consulting Group (BCG) partner and co-author of Rocket: Eight Lessons to Secure Infinite Growth. According to a BCG study, apostle consumers constitute 2% of customers and account for 80% of a brand’s direct revenues. They also account for 80% of revenues achieved through recommendations and 150% of profit. One brand that does a phenomenal job cultivating apostle consumers is Victoria’s Secret, which is owned by L Brands (LB), according to Silverstein. He said the company is on a roll because it understands the needs of its core clientele: 26 year old, single, professional women in urban markets. ‘They know that those women want sexy, they want glamorous and they want comfortable,’ said Silverstein. ‘Victoria’s Secret is by far the best company in bras and you see it in their stock price, momentum, growth in sales and store openings.’ Silverstein said the once proud Hilton (HLT) hotel chain lost its way for a spell, but recovered once it rediscovered the business customer. Now, in his view the hotel operator has the ability to increase sales and reward shareholders.
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