A company can achieve superior profits and success with a focus on loyalty-based (LB) management. LB systems need to be aligned with all company functions and must be integrated with the company’s basic business strategy (e.g., they cannot merely be an "add on" or a program). Reichheld writes that loyal customers are more profitable, providing benefits such as: 1) revenue growth (long time customers purchase more), 2) cost savings (they learn to be more efficient in their dealings with you), 3) referrals (who tend to be higher quality customers), and 4) price premiums (older customers are less price sensitive than new ones).
Siting one customer segmentation study, they discovered that "the most valuable 10 percent are worth ten times as much as the least valuable 10 percent." Their research also found that hiring, developing and retaining the right employees was a critical element of attaining highly loyal customers. A culture of customer’s interests first must exist, with focus on areas such as: trust, empowerment, employee loyalty, fair compensation, employee development, and shared philosophy. To know where it stands, a company must use a few, key measures – based on data that can be easily gathered, organized and analyzed – and that captures the entire lifecycle of a customer. Reichheld also stresses the danger of using customer satisfaction as a measure of loyalty. His research provides plenty of evidence that customer satisfaction does not equate to repurchase likelihood and has little correlation to cash flow. As a final, yet critical point, when dealing with a difficult question and working through pros and cons and possible solutions, Reichheld recommends asking oneself: How will it create customer value?