The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value Paperback – Sep 1 2001
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From Publishers Weekly
Reichheld, a director of Bain & Co., a strategy consulting firm in Boston, takes an old-fashioned concept?loyalty?and shows its relevance to customer retention and long-term profit growth. His position seems obvious, but its import has been lost amid the rapid turnover in the current business climate. He notes that major companies replace half their customers in five years, half their employees in four and a half and their investors in less than one. To counteract this trend, he recommends loyalty-based management, in which businesses not only make a conscious effort to retain customers but also develop strategies for attracting the kind who are likely to remain loyal. Reichheld also posits a "cause-and-effect relationship" between employee and customer loyalty. Writing with Teal, a senior editor at Bain & Co., he makes his point with examples from State Farm, Toyota/Lexus and others that have improved their bottom lines and insured long-term growth by developing loyalty. Illustrations. 50,000 first printing; $80,000 ad/promo; author tour.
Copyright 1996 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.
Much has been written recently lamenting the loss of loyalty in all aspects of society. This loss seems magnified in the corporate world, where job change is often the only ticket for getting ahead and where companies regularly abandon communities and downsize longtime workers out of jobs. In White-Collar Blues, Charles Heckscher last year surveyed the state of middle-management loyalty and offered solutions for rebuilding loyalties. Now Reichheld, director at a strategy consulting firm with its own "loyalty practice," analyzes not only employee but also customer and investor loyalty and demonstrates the measurable results that strong loyalties have on corporate profits. Reichheld notes that traditional accounting systems do not show the "loyalty effect" and offers gauges that do. To make his case, he uses such companies as Lexus, John Deere, and Leo Burnett--the "loyalty royalty" --as examples. David Rouse --This text refers to an out of print or unavailable edition of this title.See all Product Description
Top Customer Reviews
Of course, Reichheld fully understands all this. In a brilliant essay which recently appeared in the Harvard Business Review, he shares new research which (again) shows that companies with faithful employees, customers, and investors (i.e. capital sources which include banks) share one key attribute: leaders who stick with six "bedrock principles": preach what you practice (David Maister has much of value to say about this in his most recently published book, Practice What You Preach), play to win-win, be picky, keep it simple, reward the right results, and finally, listen hard...talk straight. In this book, Reichheld organizes his material within 11 chapters which range from "Loyalty and Value" to "Getting Started: The Path Toward Zero Defections." With meticulous care, he explains how to devise and them implement programs which will help any organization to earn the loyalty of everyone involved in the enterprise. He draws upon a wealth of real-world experience which he and his associates in Bain & Company, a worldwide strategy consulting firm. Reichheld heads up its Loyalty Practice.Read more ›
Although my current interest is largely the subject of customer relationships, Mr. Reichheld reminds me of the importance of integration. Loyalty initiatives must be integrated! Customer loyalty cannot be achieved without a corresponding commitment to employee and shareholder loyalty. This idea is very important.
The book is extremely well-written and compelling enough to warrant a significant time investment. By focusing case examples on a handful of "loyalty leaders" such as MBNA and State Farm, readers get a very complete picture of best practice.
Readers looking to develop an economic case for loyalty initiatives will benefit particularly by reading Chapter 2, on the economics of customer loyalty, and Chapter 10, on measurement.
[Dan Michaluk is a simulation designer for ExperiencePoint, creators of award-winning business simulations.]
Most recent customer reviews
I absolutely loved this book; a 'game changer' in my mind in how I approach and view business growth challengesPublished 21 months ago by Customer Strategy Consultant
Simply the best business book I've read in years. An invaluable framework for long-term success.Published on Dec 21 2003 by Len
“Loyalty is dead” begins this classic about loyalty. But after you’ve read this book, you'll know that pursuing loyalty pays off. Read morePublished on Nov. 28 2001 by Peter Pick
I would recommend the first half of this book (chapters 1-4 & 6) to any business manager or aspiring upstart. Read morePublished on Jan. 15 2001 by Craig
Reichheld lays out both why loyalty matters, and why difficulty in measuring the impact of loyalty has made managers undervalue it in the past. Read morePublished on July 9 1999 by Ray Campbell
For those who think loyalty cannot be attained by either your customers or your employees, think again. Read morePublished on March 30 1999 by Jim Altfeld
It is a well known fact, but almost impossible to document in most companies, that it is less expensive to keep customers than to find and acquire new ones. Read morePublished on March 29 1999
This is an outstanding book for explaining and exploring the economic value of keeping a customer. In explaining those benefits, it becomes clearer how important and affordable it... Read morePublished on Jan. 28 1999 by Donald Mitchell
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