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The economics of loyalty

Image credit: http://www.bain.com/

Image credit: http://www.bain.com/

The economics of loyalty
Rob Markey and Fred Reichheld

March 23, 2012 Bain Brief
Bain & Company | Insights | Loyalty

If you are a commercial banker, you know intuitively that some of your customers are worth far more to your business than others. The best customers maintain higher deposit and loan balances, use more banking services and stay with you for a long time. They are loyal, enthusiastic advocates of your bank, singing your praises to friends and colleagues. They are promoters.

Say you run a chain of hotels. You know that your best customers are the guests who visit your properties time after time, spend a lot of money because they value the amenities and services your hotels offer and recommend your hotels to other travelers. They treat your hotel staff well. Those customers, too, are promoters.

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