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The Loyalty Effect: Overview
So much has changed since The Loyalty Effect was originally published in March of 1996. Dot-com mania cycled from birth, to boom, to bust. News headlines also made the complete cycle - from layoffs, to the escalating war for scarce talent, and all the way back to layoffs. Buy The Loyalty Effect in paperback

The Internet exploded onto the scene, revolutionizing communications and dramatically expanding the potential for deeper relationships with customers and suppliers. At the same time, alternative applications of the Internet have challenged the very relevance of lasting relationships.  So what’s the chance that Reichheld's framework of loyalty economics, conceived in the early to mid-nineties, is still valid for competing in today’s world?

As it turns out, the framework detailed in The Loyalty Effect has not only withstood these challenges, its relevance has been magnified. The Internet has enabled analysts to uncover the powerful loyalty economics at work in more and more industries as new databases and software illuminate the patterns of customer lifecycle value. The economic framework developed for this book has become the basic standard, not only for Bain & Company case teams around the world, but for an army of business analysts and investors engaged in the evaluation of new business models which utilize the Internet.

Of course The Loyalty Effect serves as the primer for Loyalty Rules! because in this age of empowered shareholders, any leader of a public company who invests in building loyalty without fully understanding the economic case for loyalty is flirting with career suicide. The Loyalty Effect explains that basic economic framework in clear and rigorous detail in a language that appeals as much to financial analysts as to philosophers. Beyond the intuitive appeal of treating people in a manner worthy of their loyalty, this book demonstrates the bottom-line benefits of such a leadership philosophy. It provides the bridge between the world of corporate ethics and the world of hard-core economics.  Most of the apparent conflicts between these two worlds are reconciled when the economics of loyalty are revealed. The fact is that a 5% improvement in customer retention rates will yield between a 25 to 100% increase in profits across a wide range of industries. Readers of The Loyalty Effect will learn the underlying microeconomics which make this so, and how to evaluate and prioritize the various investments necessary to create superior loyalty.


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