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The Economics of Loyalty
ExecSolutions, SAS Institute, Inc. 01/01/98
by Frederick F. Reichheld

Whether you're a business owner, a top executive, or a rising professional, the statistics are frightening: In a typical company, customers are defecting at the rate of 10 to 30 percent per year. Employee turnover rates are averaging 15 to 25 percent per year. Annual investor churn now exceeds 50 percent per year. What are we doing wrong? According to Frederick Reichheld, the business world has given up on loyalty. The bestselling author of The Loyalty Effect, Reichheld believes in the power of loyalty-based management as a highly profitable alternative to the economics of perpetual churn. During a recent visit to SAS Institute's world headquarters in Cary, North Carolina, Reichheld spoke with ExecSolutions.

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