Rob Markey

Frederick F. Reichheld

Previously published under title: Ultimate question.

How Net Promoter Companies Thrive in a Customer-driven World

The Ultimate Question 2.0

Thomas Teal

Loyalty is by no means dead. In fact the principles of loyalty . . . are alive and well at the heart of every company with an enduring record of high productivity, solid profits, and steady expansion. From The Loyalty Effect The business world seems to have given up on loyalty: many major corporations now lose-and have to replace-half their customers in five years, half their employees in four, and half their investors in less than one. Fred Reichheld's national bestseller The Loyalty Effect shows why companies that ignore these skyrocketing defections face a dismal future of low growth, weak profits, and shortened life expectancy. Reichheld demonstrates the power of loyalty-based management as a highly profitable alternative to the economics of perpetual churn. He makes a powerful economic case for loyalty-and takes you through the numbers to prove it. His startling conclusion: Even a small improvement in customer retention can double profits in your company. The Loyalty Effect will change the way you think about loyalty, profits, and the nature of business. Fred Reichheld is a Director Emeritus of Bain & Company and a Bain Fellow. He is also the author of Loyalty Rules!.

The Hidden Force Behind Growth, Profits, and Lasting Value

The Loyalty Effect

Frederick R. Reichheld

Building Loyalty: The Acid Test of Leadership Fewer than half of today's employees believe that their companies deserve their loyalty. Web-empowered customers now defect more easily and more quickly than ever. Has loyalty become an outdated notion in today's marketplace? Fred Reichheld, author of the bestselling book The Loyalty Effect, argues that loyalty is still the fuel that drives financial success-even, and perhaps especially, in today's volatile, high-speed economy-but that most organizations are running on empty. Why? Because leaders too often confuse profits with purpose, taking the low road to short-term gains at the expense of employees, customers, and ultimately, investors. In a business environment that thrives on networks of mutually beneficial relationships, says Reichheld, it is the ability to build strong bonds of loyalty-not short-term profits-that has become the "acid test" of leadership. Based on extensive research into companies from online start-ups to established institutions-including Harley-Davidson, Enterprise Rent-A-Car, Cisco Systems, Dell Computer, Intuit, and more-Reichheld reveals six bedrock principles of loyalty upon which leaders build enduring enterprises. Underscoring that success requires both understanding and measuring loyalty, he couples each principle with straightforward actions that drive measurement systems, compensation, organization, and strategy: Play to win/win: never profit at the expense of partners. Be picky: membership must be a privilege. Keep it simple: reduce complexity for speed and flexibility. Reward the right results: worthy partners deserve worthy goals. Listen hard and talk straight: insist on honest, two-way communication and learning. Preach what you practice: explain your principles, then live by them. Vivid case studies illustrate the consequences of building or ignoring loyalty, and a rigorous Loyalty Acid Test (www.loyaltyrules.com) enables leaders to benchmark their loyalty practices against competitors. Providing tools for implementing the timeless principles of loyalty in a volatile economy, Loyalty Rules! is a practical guidebook for taking the high road in business-the only road that leads to lasting success. Fred Reichheld is a Director Emeritus of Bain Company and a Bain Fellow. He is the author of The Loyalty Effect as well as of influential articles in Harvard Business Review and the Wall Street Journal. His work has been featured in leading publications including the New York Times, Business Week, the Financial Times, and The Economist.

Frederick F. Reichheld

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