Rob Markey and Fred Reichheld

Most companies work hard to determine the root causes of customer dissatisfaction. To outgrow your competition, you have to work at least as hard to determine the sources of customer delight. If it derives from product quality, then what, specifically, do customers cite as evidence? If it comes from the customer’s experience in buying from you, then what about the process most impressed them? In … [ Read more ]

The Infrastructure Behind a Net Promoter System

Net Promoter SystemSM (NPS®) practitioners have created sophisticated systems that enable them to close the loop with customers, bring the comments and criticisms that they get to the front line and use that feedback to continually improve the customer experience. They have learned how to link the feedback to their customer relationship management (CRM) software and their existing operational infrastructure, so that they know what … [ Read more ]

Survey Sabotage: Is Your Customer Data Misleading You?

Many top companies are using or have adopted a Net Promoter® system to learn more about the quality of their relationships. A closed-loop feedback process can help businesses identify key clients, product features customers like or dislike, service opportunities and problems that need immediate attention. But these efforts can only go so far if the survey data is flawed by biased answers. Like a virus … [ Read more ]

Fred Reichheld and Rob Markey

If a hard asset like a machine is somehow impaired, a CFO must reflect the asset’s lower value on the books. The same applies to a contract or piece of software. If customers, on the other hand, suddenly decide they hate doing business with your company, this asset is clearly impaired—but the CFO may not even know about it until too late. And even if … [ Read more ]

Fred Reichheld

Too many companies are addicted to bad profits, profits that come at customers’ expense and drain the value out of customer relationships… Bad profits come from unfair or misleading pricing. Bad profits arise when companies save money by delivering a lousy customer experience. Bad profits are about extracting value from customers, not creating value… A company earns good profits when it so delights its customers … [ Read more ]

The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value

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 … [ Read more ]

Loyalty: It’s Worth More Than You Think

Loyalty? It’s hopelessly passé, many say-an outmoded value from a bygone era. Frederick Reichheld begs to differ: In his keynote address for LOMA’s 2003 Customer Service Conference, he explained how successful companies are inspiring it in their customers

Book Excerpt: Word-of-Mouth Economics at Dell

Some marketers may shy away from measuring the Net Promoter Score because it sounds too complex. But others are not daunted. To show how it is done, a Bain & Company team used the approach to quantify the value of promoters and detractors in the personal-computer business. The team used only publicly available data so that what it did could serve as a model for … [ Read more ]

Closing the Delivery Gap

Most companies assume they’re consistently giving customers what they want. Usually, they’re kidding themselves. When we recently surveyed 362 firms, we found that 80% believed they delivered a “superior experience” to their customers. But when we then asked customers about their own perceptions, we heard a very different story.

One Number to Grow

This summary of Fred Reichheld’s work, which appeared in the Harvard Business Review last December, reveals how the percentage of customers enthusiastic enough to refer a friend or colleague – perhaps the strongest sign of customer loyalty – correlates with differences in growth rates among competitors in many industries. By substituting a single question for the complex black box of the typical customer satisfaction … [ Read more ]

The story behind successful CRM

The first step in leading a successful CRM program is to develop a robust customer strategy based on good old-fashioned customer segmentation. Step two is to realign your organization to support this plan. Third, provide the right tools and technology to support your customer strategy and realigned organization. And at every step of the way ask yourself whether customer loyalty could be better promoted by … [ Read more ]

Making CRM Work

Economic turbulence is forcing companies to sharpen their focus on customer loyalty. But a promising technique that emphases loyalty-building — Customer Relationship Management programs, or CRM — is falling flat. Bain’s Darrell Rigby and Fred Reichheld offer insights on turning the promise of CRM into profits.

Loyalty Rules!

Fred Reichheld was the first to prove the enormous impact retention — or customer loss — can have on the bottom line. His ground-breaking 1996 book, “The Loyalty Effect,” demonstrated conclusively that a 5% increase in customer retention can, depending on the industry, result in an increase in profits of up to 95%. Reichheld’s more recent title, “Loyalty Rules,” describes the key role played … [ Read more ]

Loyalty Rules! How Today’s Leaders Build Lasting Relationships

It’s trendy these days to decry a lack of loyalty among employers, employees, customers, and even investors, and blame it for everything from drops in business profitability to the decline of civilized society. But Frederick F. Reichheld, a Bain & Company director emeritus, insists that loyalty lives–and, in fact, remains a major reason for the success enjoyed by some of the leading names in both … [ Read more ]