Word of mouth has a top speed, and it’s already set

Referral-led firms often grow at a stubbornly steady rate for years. Two numbers explain why, and why plans that assume acceleration tend to miss quietly.

By Steve 5 min read
Abstract bridge artwork for Word of mouth has a top speed, and it’s already set

A firm that has grown almost entirely on referrals for six years writes a plan to double in three. Nobody in the room objects, because the growth has been reliable and the market is large. The plan fails, not at execution, but at arithmetic: the mechanism that produced six years of growth has a top speed, and the plan quietly assumed it didn’t. Referral growth is genuinely compounding: a bigger base produces more referrals, which produce a bigger base. But it compounds at a rate, and that rate is set…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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