Harvard Business Review

Lead for Loyalty

The greater the loyalty a company engenders among its customers, employees, suppliers, and shareholders, the greater the profits it reaps.

By Frederick Reichheld

First published on julho 01, 2001
min read


The full version of this article is available on Harvard Business Online (subscription required). The Idea in Brief The greater the loyalty a company engenders among its customers, employees, suppliers, and shareholders, the greater the profits it reaps. Most businesspeople today understand that. But what can an organization do to win and retain the allegiance of all those stakeholders? My most recent research, building on the work of more than a decade, points to an answer that busy executives may not want to hear. A study of the “loyalty leaders”—the companies with the most impressive credentials in that area—has convinced me that the challenge of engendering loyalty can’t be delegated to a task force or a bright young up-and-comer. It can’t be addressed with a software upgrade or a new wireless strategy. It isn’t simply a matter of having better customer databases, measurement systems, or rewards programs. Outstanding loyalty is the direct result of the words and deeds—the decisions and practices—of committed top executives who have personal integrity. The companies I studied don’t skimp on talent, technology, or strategy. But it’s their top management that separates them from the pack. The loyalty leader companies are a diverse bunch, ranging from Northwestern Mutual and Vanguard to Chick-fil-A, Enterprise Rent-A-Car, Harley-Davidson, and Intuit. It may seem far-fetched to suggest that they have anything in common, but beneath the surface variations lie relationship strategies that are strikingly similar. The strategies, which can be expressed as six concise principles, originate at the top of the organization and inform all of its relationships, both within and beyond the company walls. These strategies are the starting point for senior executives seeking to place their organizations among the ranks of the loyalty leaders. In the pages that follow, I’ll describe how exemplary corporate leaders have put the six principles into action. The Six Principles of Loyalty Preach what you practice. Many business leaders are vaguely embarrassed by the idea of trumpeting their deepest values. They believe actions speak louder than words. But only by preaching the importance of loyalty in clear, precise, powerful terms can executives and businesses prevail against digital-age dogma that disparages the notion that loyalty remains relevant to success in today’s world. Read the full article on Harvard Business Online. Bain Book Loyalty Rules! Learn more about how today's loyalty leaders build lasting relationships.

The full version of this article is available on Harvard Business Online (subscription required).

The Idea in Brief

The greater the loyalty a company engenders among its customers, employees, suppliers, and shareholders, the greater the profits it reaps. Most businesspeople today understand that. But what can an organization do to win and retain the allegiance of all those stakeholders?

My most recent research, building on the work of more than a decade, points to an answer that busy executives may not want to hear. A study of the “loyalty leaders”—the companies with the most impressive credentials in that area—has convinced me that the challenge of engendering loyalty can’t be delegated to a task force or a bright young up-and-comer. It can’t be addressed with a software upgrade or a new wireless strategy. It isn’t simply a matter of having better customer databases, measurement systems, or rewards programs. Outstanding loyalty is the direct result of the words and deeds—the decisions and practices—of committed top executives who have personal integrity. The companies I studied don’t skimp on talent, technology, or strategy. But it’s their top management that separates them from the pack.

The loyalty leader companies are a diverse bunch, ranging from Northwestern Mutual and Vanguard to Chick-fil-A, Enterprise Rent-A-Car, Harley-Davidson, and Intuit. It may seem far-fetched to suggest that they have anything in common, but beneath the surface variations lie relationship strategies that are strikingly similar. The strategies, which can be expressed as six concise principles, originate at the top of the organization and inform all of its relationships, both within and beyond the company walls. These strategies are the starting point for senior executives seeking to place their organizations among the ranks of the loyalty leaders. In the pages that follow, I’ll describe how exemplary corporate leaders have put the six principles into action.

The Six Principles of Loyalty

Preach what you practice. Many business leaders are vaguely embarrassed by the idea of trumpeting their deepest values. They believe actions speak louder than words. But only by preaching the importance of loyalty in clear, precise, powerful terms can executives and businesses prevail against digital-age dogma that disparages the notion that loyalty remains relevant to success in today’s world.

Read the full article on Harvard Business Online.