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The Loyalty Effect


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Table of Contents

Preface 1. The Virtues and Values of Loyalty 2. The Economics of Customer Loyalty 3. The Right Customers 4. The Right Employees 5. Productivity 6. The Right Investors 7. In Search of Failure 8. The Right Measures 9. Transforming the Value Proposition 10. Partnerships for Change 11. Getting Started: The Path Toward Zero Defections Notes Index About the Author

About the Author

Fred Reichheld is a Director Emeritus of Bain & Company and a Bain Fellow. He is also the author of Loyalty Rules!.


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. (Mar.)

"E-Loyalty: Your Secret Weapon on the Web," with Phil Shefter (July/August 2000) "Learning from Customer Defections," (March/April 1996) "Loyalty-Based Management," (March/April 1993) "Zero Defections: Quality Comes to Services," with Earl Sasser (September/October 1990)

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