Download The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value PDF

TitleThe Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value
Author
LanguageEnglish
File Size3.0 MB
Total Pages655
Table of Contents
                            cover
page_i
page_ii
page_iii
page_v
page_vii
page_viii
page_ix
page_x
page_xi
page_xii
page_1
page_2
page_3
page_4
page_5
page_6
page_7
page_8
page_9
page_10
page_11
page_12
page_13
page_14
page_15
page_16
page_17
page_18
page_19
page_20
page_21
page_22
page_23
page_24
page_25
page_26
page_27
page_28
page_29
page_30
page_31
page_33
page_34
page_35
page_36
page_37
page_38
page_39
page_40
page_41
page_42
page_43
page_44
page_45
page_46
page_47
page_48
page_49
page_50
page_51
page_52
page_53
page_54
page_55
page_56
page_57
page_58
page_59
page_60
page_61
page_62
page_63
page_64
page_65
page_66
page_67
page_68
page_69
page_70
page_71
page_72
page_73
page_74
page_75
page_76
page_77
page_78
page_79
page_80
page_81
page_82
page_83
page_84
page_85
page_86
page_87
page_88
page_89
page_90
page_91
page_92
page_93
page_94
page_95
page_96
page_97
page_98
page_99
page_100
page_101
page_102
page_103
page_104
page_105
page_106
page_107
page_108
page_109
page_110
page_111
page_112
page_113
page_114
page_115
page_116
page_117
page_118
page_119
page_120
page_121
page_122
page_123
page_124
page_125
page_126
page_127
page_128
page_129
page_130
page_131
page_132
page_133
page_134
page_135
page_136
page_137
page_138
page_139
page_140
page_141
page_142
page_143
page_144
page_145
page_146
page_147
page_148
page_149
page_150
page_151
page_152
page_153
page_154
page_155
page_156
page_157
page_158
page_159
page_160
page_161
page_162
page_163
page_164
page_165
page_166
page_167
page_168
page_169
page_170
page_171
page_172
page_173
page_174
page_175
page_176
page_177
page_178
page_179
page_180
page_181
page_182
page_183
page_185
page_186
page_187
page_188
page_189
page_190
page_191
page_192
page_193
page_194
page_195
page_196
page_197
page_198
page_199
page_200
page_201
page_202
page_203
page_204
page_205
page_206
page_207
page_208
page_209
page_210
page_211
page_212
page_213
page_214
page_215
page_216
page_217
page_218
page_219
page_220
page_221
page_222
page_223
page_224
page_225
page_226
page_227
page_228
page_229
page_230
page_231
page_232
page_233
page_234
page_235
page_236
page_237
page_238
page_239
page_240
page_241
page_242
page_243
page_244
page_245
page_246
page_247
page_248
page_249
page_250
page_251
page_252
page_253
page_255
page_256
page_257
page_258
page_259
page_260
page_261
page_262
page_263
page_264
page_265
page_266
page_267
page_268
page_269
page_270
page_271
page_272
page_273
page_274
page_275
page_276
page_277
page_279
page_280
page_281
page_282
page_283
page_284
page_285
page_286
page_287
page_288
page_289
page_290
page_291
page_292
page_293
page_294
page_295
page_296
page_297
page_298
page_299
page_301
page_302
page_303
page_304
page_305
page_306
page_307
page_308
page_309
page_310
page_311
page_312
page_313
page_314
page_315
page_316
page_317
page_318
page_319
page_320
page_321
page_322
                        
Document Text Contents
Page 1

title:
The Loyalty Effect : The Hidden Force
Behind Growth, Profits, and Lasting Value

author: Reichheld, Frederick F.; Teal, Thomas
publisher: Harvard Business School Press

isbn10 | asin: 0875844480
print isbn13: 9780875844480
ebook isbn13: 9780585056425

language: English

subject
Customer relations, Consumer satisfaction,
Job satisfaction, Labor productivity,
Loyalty.

publication date: 1996
lcc: HF5415.5.R438 1996eb
ddc: 658.4

subject:
Customer relations, Consumer satisfaction,
Job satisfaction, Labor productivity,

Page 327

institutions showing churn rates between 25 and 50 percent may also
have been investing for the long term, because while they traded one
group of stocks very actively, they invested in and held another group.
Their high rate of trading disguises their core of stable holdings. If
your company can qualify as a core holding, then those investors, too,
could lower your cost of capital.

Still, the best place to start is probably with institutions that show a
real preference for long-term investments. One name that leaps from
the list of the ten largest institutions with the lowest portfolio turnover

Page 328

Page 163

Figure 6-1
Portfolio Turnover Rates and Average Holding Periods

of the Top 700 Institutional Money Managers

Source: CDA/Spectrum, "13(f) Turnover Report," 1994.

Note: Includes all money managers with more than $100 million in equity assets
under management in 1993.

rates ispredictablyState Farm. The Good Neighbor holds more than
$18 billion in equities and turns them over at the neighborly rate of
only 3.4 percent per year. And no, it is not simply indexing. It seems
that the company's philosophy of long-term loyalty and partnership
extends all the way to its strategy for investing in public stocks. By
sticking with its investments, State Farm has been able to outperform
the S&P 500 over the long term, which places its performance solidly
in the top quartile of all investment managers.

What gives State Farm the capacity to manage a low-churn portfolio
is the highly predictable cash flow it draws from its high rate of
customer retention. What gives it the will is partly the fact that low-
churn investing minimizes transaction fees and taxes and partlyindeed

Page 654

investor, 244-246

Vanguard Mutual Fund Group, 182

Vendor partnerships, 21-22, 23, 287-289

Vertical learning, 125

Virtual corporation, 23

Visa, 275

Vitek Systems, 192, 194

Volvo, 234

W

on corporate loyalty, 10, 17

on employee loyalty, 95, 98

survey on productivity, 128-129

Wang, 17

Warner Lambert, 94

Welfare, inefficiency of, 132, 136

Western Life Insurance Company, 65-67

Whirlpool, 75

White, Robert, 94

Wilde, Oscar, 92, 96

Woolworth, 94

WordPerfect, 170

Page 655

Wright, Chuck, 113

X

Xerox Corporation, 94, 95

Y

Yudkoff, Royce, 295, 296-297, 298, 299

Similer Documents