The Momentum Effect

Larreche, J. C.
June 2008
Momentum Effect - Business Book Summaries;2008, Vol. 1 Issue 1, p1
Book Summary
Book Summary
One of the greatest challenges leaders and their companies face today is continuing to grow-and innovate-while maintaining profitability. Some companies struggle to accomplish this, while others achieve it and then lose it, but only a select few consistently succeed in doing so, and some do it for decades. The phenomenon responsible for profitable, innovative growth is the momentum effect, explains INSEAD professor J.C. Larreche in his book, The Momentum Effect. Momentum growth is exceptional growth because it is characterized by both a high rate of growth and an exceptional quality of growth that generates higher profits and requires fewer resources. Achieving and maintaining momentum requires understanding its source and applying a systematic process; it requires a momentum strategy. A deep understanding of customers, of their needs, wants, and desires is the source of the value-creation flow. Companies, therefore, must develop offers (products) that are compelling for customers. This initial growth is then maintained and accelerated by customer retention and engagement and by systematic efforts aimed at nurturing the momentum-and the customer. The key drivers of momentum growth are novel insights into the customer's world, their worldview, and the emotions that drive their behavior and the development of products and services that have a powerful appeal for them. However, to mobilize for this kind of growth requires a shared ambition across the company. Everyone must be focused on satisfying, retaining, and most important, engaging customers. One of the defining themes of momentum is how it both ensures growth opportunities and exploits them efficiently, which may be summed up as "more for less." Providing the customers the best offer in the most efficient way is what creates momentum. In creating offers so perfectly crafted to customers' needs and values, a momentum results that renders unnecessary the need for expensive sales and marketing and the cost-cutting necessary to fund them.


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