Nothing speaks more clearly about your values and principles than your choice of associates and of those promoted to positions of prominence and authority. When it comes to running a business that is worthy of loyalty, not all employees, customers, suppliers, and vendors are in fact equally worthy of membership on your team. Loyalty leaders understand that they can and should treat everyone honestly and fairly, with dignity and respect; but they also understand that they can afford to be loyal only to those who can help build mutually beneficial relationships that reflect the principles of loyalty. Picking your employees Employee behaviors and attitudes - even more than leadership principles and ideals - communicate most directly to customers, suppliers, and others just what the company stands for. Loyalty leaders are uniform in setting high standards for new employees, and they are remarkably uniform in the practices they have learned to attract and retain the right employees.  They all create a uniquely attractive opportunity; they are all keenly involved in the recruiting process; they all take pains to ensure that employees’ first experiences on the job reflect their value to the company as well as the values of the company. Select your customers with care Being picky about customers may be a foreign concept. Bringing in the right kinds of customers can result in long-term cash flow annuities as well as in continued growth from referrals, and in enhanced satisfaction from employees whose daily jobs are improved when they can deal with appreciative customers. Loyalty leaders are extremely picky about targeting only the right customer - those for whom their firms have been engineered to deliver truly special value. By maintaining the most rigorous standards for choosing your business partners - your employees, your customers, your suppliers, and your dealers - you will be headed for the high road of loyalty leadership. The value of having the right customers is demonstrated by eBay.  More than half of eBay's new customers are from referrals, dramatically driving down customer acquisition costs. Examples of Bain's work All customers are not created equal, and targeting the highest possible gross market share can often be self-defeating. As the profit potential varies across a customer base, segmentation allows a company to allocate limited resources where they can be optimally leveraged - maximizing both customer acquisition and retention. Client Success: Creating opportunities to retain the right customers. A leading property and casualty insurance company needed to better understand its customer base.
(c) Bain & Company, Inc.