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Loyalty Rules: How Today's Leaders Build Lasting Relationships Paperback – July 3, 2003

3.9 out of 5 stars 17 customer reviews

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Editorial Reviews

Amazon.com Review

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 the Old and New Economies. Loyalty Rules, his follow-up to 1996's The Loyalty Effect, shows how practices that built such relationships in organizations like Harley-Davidson, Enterprise Rent-a-Car, Cisco Systems, and the U.S. Marine Corps help improve the atmosphere for all concerned and aid in producing better bottom-line results. The bulk of the book focuses on specific, real-world applications of Reichheld's Six Principles of Loyalty: in "Preach What You Practice," for example, he outlines various ways that "loyalty leaders" can articulate relevant concepts while clarifying "how these same philosophical foundations are ... not just feel-good platitudes." Reichheld also includes sample questionnaires from his Acid Test Survey, a critical part of the prescribed diagnosis-and-remedy program that is freely available on the author's Web site. --Howard Rothman --This text refers to the Hardcover edition.

From Publishers Weekly

Reichheld (The Loyalty Effect), director emeritus of Bain & Company, believes that companies today over-emphasize short-term profits at the expense of employees and customers. Reichheld offers six loyalty principles (employed by top-shelf companies such as Enterprise-Rent-a-Car and Dell Computer), including: "reward the right results"; "listen hard and talk straight"; "preach what you practice." Company profiles with comments from executives are particularly useful, though some examples have already been studied extensively (Southwest, Cisco). Nonetheless, the book makes a solid contribution.

Copyright 2001 Cahners Business Information, Inc.

--This text refers to the Hardcover edition.

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Product Details

  • Paperback: 240 pages
  • Publisher: Harvard Business Review Press; 1 edition (July 3, 2003)
  • Language: English
  • ISBN-10: 1591393248
  • ISBN-13: 978-1591393245
  • Product Dimensions: 9.2 x 6.2 x 0.6 inches
  • Shipping Weight: 10.4 ounces (View shipping rates and policies)
  • Average Customer Review: 3.9 out of 5 stars  See all reviews (17 customer reviews)
  • Amazon Best Sellers Rank: #420,481 in Books (See Top 100 in Books)

Customer Reviews

Top Customer Reviews

By Donald Mitchell HALL OF FAMETOP 500 REVIEWERVINE VOICE on August 22, 2001
Format: Hardcover
Most sequels to business books merely add some more detail to the argument of the previous book. Loyalty Rules! is a happy exception to that circumstance. The Loyalty Effect is a fine and helpful book, but I prefer Loyalty Rules! because it is more practical and explores so many more dimensions of leadership and management. There is also new information in Loyalty Rules! about the economics of customer loyalty for doing business on the Internet.
Many people take the financial incentive to keep customers longer as encouragement to employ all of the latest loyalty-building tools (from data-mining to loyalty incentive programs). Mr. Reichheld is correct that encouraging people to be loyal while treating them with bad service, poor products, or disloyalty in return will not work. He argues instead for a values-based orientation that will remind many people of the principles in The 7 Habits of Highly Effective People.
The essence of the concept for creating loyalty is: "Show your partners [stakeholders like customers and employees] that loyalty is a logical strategy for the pursuit of self-interest when self-interest is defined in the context of lifelong success."
His six principles for building loyalty are paraphrased as follows:
(1) Always play to provide wins for the stakeholder as well as for the company.
(2) Be selective about the employees and customers you take on and encourage to stay with you, so that they enhance your cooperative system.
(3) Keep your approach to being loyal (and earning loyalty in return) simple. For example, "Do right by the customer" was an actionable motto for Intuit when bugs cropped up in its tax software.
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Format: Hardcover
Reichfeld's thesis is that loyalty, more than a fosuc on profits, is what guarantees companies long term success. He uses a handful of examples, including Enterprise Rent-a-Car, Northwestern Mutual, Harley Davidson, Cisco, among others, to make the case that having outstanding loyalty from your customers, suppliers and employees drives outstanding results.
The main rules Reichfeld sticks to and calls the "high road" are the following:
1. Focus on win/win solutions with partners
2. Focus only on clients which you can serve well
3. Focus on simplicity to allow everyone to understand the rules
4. Develop a set of principles and live by them, rewarding others who act according to those principles.
Overall, he makes a strong case to show how these principles can have a positive effect on business. By having low turnover, a fast food restaurant spends very little on HR expenses. By focusing on the bikes their customers love (and not diversifying), Harley gains lifelong customers.
The weakenesses of the book lie in the overemphasis of loyalty, in relation to other important tasks in business. Of course, being a book on loyalty, one could not expect anything different. Additionally, it would have eben useful to have some fake types of loyalty as example of weak attempts at loyalty. I am sure certain companies must have tried to gain loyalty through not-so-smart measures, so it would be nice to haev examples in order to differentiate them.
Overall, it is a very interesting book, useful to anyone involved in customer related businesses and in managing employee relationships. It is short (a benefit) and a bit too concise (a drawback), so it should not take more than a week to read for a regular reader.
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Format: Paperback
A recent re-reading confirms my initial reactions to this book. In a brilliant essay which appeared in the Harvard Business Review, Reichheld shares research which suggests that companies with faithful employees, customers, and investors (i.e. capital sources which include banks) share one key attribute: leaders who stick with six "bedrock principles": preach what you practice, play to win-win, be picky, keep it simple, reward the right results, and finally, listen hard...talk straight. In The Loyalty Effect, Reichheld organizes his material within 11 chapters which range from "Loyalty and Value" to "Getting Started: The Path Toward Zero Defections." With meticulous care, he explains how to devise and them implement programs which will help any organization to earn the loyalty of everyone involved in the enterprise. Reichheld draws upon a wealth of real-world experience which he and his associates have accumulated at Bain & Company, a worldwide strategy consulting firm. Reichheld heads up its Loyalty Practice.
In his most recently published book, Practice What You Preach, David Maister explains why there must be no discrepancy whatsoever between the "talk" we talk and the "walk" we walk. Reichheld agrees, noting that the "key" to the success of his own organization "has been its loyalty to two principles: first, that our primary mission is to create value for our clients, and second, that our most precious asset is the employees dedicated to making productive contributions to client value creation. Whenever we've been perfectly centered on these two principles, our business has prospered." It is no coincidence that the world's most highly admired companies are also the most profitable within their respective industries.
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