Customer Loyalty - Why it Matters

One of my favorite topics hands down is the topic of customer loyalty! I have read many books on this topic but my favorite author on this topic is Frederick F. Reichheld. Most people might be familiar with his newer book "The Ultimate Question" but my favorite is "The Loyalty Effect". You know it's a good book when you find tons of nuggets in the preface to the book. On page xi, there's my favorite nugget "The fact across a wide range of industries is that a 5 percent improvement in customer retention rates will yield a 25 to 100 percent increase in profits".

Let me say that again, this time read slowly and let this amazing statement sink in:
"The fact across a wide range of industries is that a 5 percent improvement in customer retention rates will yield a 25 to 100 percent increase in profits".

Wow, just a 5% percent improvement can impact your profits that much? That is an amazing fact. Think about that. Every day in companies, we hear about people saying "how can we grow the bottom line" and other such comments but how often do you hear someone say "How can we we increase our customer retention rates?"