Frederick F. Reichheld is a renowned business consultant and author who is known for his work on customer loyalty and employee engagement. He is best known for developing the Net Promoter Score (NPS), a measure of customer loyalty that has been widely adopted by companies around the world.
Reichheld was born in 1952 and received his undergraduate degree from the University of Notre Dame in 1974. He then went on to earn his MBA from Harvard Business School in 1976. After graduation, he began his career as a consultant with Bain & Company, where he worked for nearly 20 years before leaving to start his own consulting firm, Loyalty Research Center, in 1996.
Throughout his career, Reichheld has focused on helping companies understand and improve their relationships with customers and employees. In 2003, he published "The Loyalty Effect," a book that laid out his theories on customer loyalty and how it can be measured and improved. In this book, Reichheld introduced the concept of the Net Promoter Score (NPS), which measures customer loyalty by asking customers how likely they are to recommend a company's products or services to others.
In addition to his work on customer loyalty, Reichheld has also written extensively about the importance of employee engagement and how it can drive business success. He has argued that companies that focus on creating a positive work environment and engaging employees are more likely to retain top talent and drive business growth.
Reichheld's ideas have had a significant impact on the business world, and his work has been widely recognized and praised. He has been named one of the "100 Most Influential People in Business Ethics" by Ethisphere and has received numerous awards for his contributions to the field of business consulting.
In conclusion, Frederick F. Reichheld is a highly influential business consultant and author who has made significant contributions to the fields of customer loyalty and employee engagement. His work has had a lasting impact on the way companies approach these important areas, and he continues to be a leading voice in the business world.
Frederick Reichheld — webapi.bu.edu Records
The highly successful Olive Garden restaurant chain goes against the industry norm of moving successful managers to open new restaurants or to run bigger ones every few years and letting assistants take over. In the auto industry, satisfaction scores average 85 % to 95 %, while repurchase rates average only 40 %. Measures establish the feedback loops that are the foundation of organizational learning. It puts the Golden Rule-and love-at the heart of enduring business success. He describes the key business philosophies that underlie the remarkable results of these loyalty leaders.
While it may seem intuitive that increasing customer satisfaction will increase retention and therefore profits, the facts are contrary. The key is the customers, who are very similar to one another. Obviously, no company can grow if its customer bucket is leaky, and loyalty helps eliminate this outflow. You also get responses you can easily interpret and communicate. The initial effort yielded a long, unwieldy research questionnaire, one that included the pet questions of everyone involved in drafting the survey.
Although it is tempting to use new products to win whole new markets, it almost always makes better sense to stick with existing customer segments. Direct marketers such as L. Measures of Loyalty Even the best designed loyalty-based system will deteriorate unless an effective measurement system is established. The tendency of loyal customers to bring in new customers—at no charge to the company—is particularly beneficial as a company grows, especially if it operates in a mature industry. The challenge is to avoid as many of these people as possible in favor of customers whose loyalty can be developed. If the analysis is done well, that customer segment will be fairly homogeneous, and that homogeneity improves the economics of serving the segment. While they are reengineering their business processes, they are failing to reengineer career paths, job content, and compensation so that employees will stay with the company long enough to learn the new processes.
In Winning on Purpose, which grows directly out of NPS, Reichheld argues that the primary purpose of a business should be to enrich the lives of its customers-and the best way to do that is to embrace a rating system that segments customers into Promoters, Passives, and Detractors. Competitors must respond, or they will find it increasingly difficult to survive on the leftovers of the marketplace. State Farm often looks for candidates with roots in the community who are already likely to have long-term relationships with prospective customers. All these efforts tend to make the young drivers that State Farm insures more careful, and their parents grateful for the interest and help. This article also appears in: 24.
Pricing policies work as a magnet to retain good customers. But evangelistic customer loyalty is clearly one of the most important drivers of growth. Now you can pay workers more—boosting morale and longevity. In most of the industries studied, the percentage of customers enthusiastic enough about a company to refer it to a friend or colleague directly correlated with growth rates among competitors. They are the ones most likely to do business with you over time. The longer employees stay with the company, the more familiar they become with the business, the more they learn, and the more valuable they can be. The data allowed us to determine which survey questions had the strongest statistical correlation with repeat purchases or referrals.
Monitor the cost, revenue, and profit consequences of the number of customers who stay loyal for how long. Customer-retention and defection measures are distributed throughout the organization. Finally, every detractor represents a missed opportunity to add a promoter to the customer population, one more unpaid salesperson to market your product or service and generate growth. In addition, loyal customers make life easier for the agents, who spend more time working with people they know and like and far less time chasing new customers. Background details that you might want to know about Frederick include: ethnicity is Caucasian, whose political affiliation is currently a registered Republican; and religious views are listed as Christian.
It discovered that as its core customers aged, they were looking for more fat-free and cholesterol-free products. Defection rates exceeded 200,000 customers per month in 2003. If employees are expected to be long-termers, companies can justify investing more in them. When agents are rooted in the community, they often know who the best customers will be. When a customer reported a neutral or negative experience, marking him a potential detractor, the interviewer requested permission to immediately forward this information to the branch manager, who was trained how to apologize, identify the root cause of the problem, and resolve it.
webapi.bu.edu: Frederick F. Reichheld: books, biography, latest update
Between 65 % and 85 % of customers who defect say they were satisfied or very satisfied with their former supplier. The first step in developing effective measures is to understand the cause-and-effect relationships in the system. It is important to define customer retention carefully and what it means in a particular industry. The survey was different in another important way. Curiously, Honda has had a tougher fight in Japan, where it remains a small player.
