Many business people believe in Pareto’s principle, which states that 80% of your business comes from 20% of your customers. As a result, businesses have invested a lot of time and money developing that crucial minority of loyal customers. However, according to Timothy L. Keiningham, Terry G. Vavra, Lerzan Aksoy and Henri Wallard, some of the customers you’re working so hard to retain may actually be costing you money. Even worse, if you follow the advice of many marketing experts and focus narrowly on retaining old customers rather than on finding new ones, you can kill your business. The authors effectively demolish each of 53 myths about loyalty using helpful statistics and case studies on the one hand, and some enigmatic charts and corny cartoons on the other. However, in the end, you may wish they’d spent a little less time on demolition and a little more time on presenting the "proven tactics" they promise in the second half of their subtitle. Nonetheless, getAbstract recommends their book to marketers who wonder why their customer loyalty programs are not working and who want to make a change.
In this summary, you will learn
- Why most strategies to build customer loyalty don’t work;
- Why you should retain only your best customers; and
- How to manage customer loyalty.
About the Authors
Timothy L. Keiningham is the senior vice president and head of consulting at a customer-loyalty consulting firm. Terry G. Vavra is a public speaker, and a consultant on loyalty and customer satisfaction. Lerzan Aksoy is an assistant professor of marketing at Koc University in Istanbul, Turkey. Henri Willard is the CEO of a customer-loyalty consultancy.