The best source is Reichheld’s 2001 book The Loyalty Effect. He has recently become more known for writing The Ultimate Question, but frankly I think the Loyalty Effect (and its follow-up Loyalty Rules) are ultimately the more powerful and long-lasting for his reputation.

It is hard to overstate the power of his work. In my humble opinion (and I know a few things about this) this is in the top 5 strategy books of the last half-century. It certainly belongs up there with Competitive Strategy by Michael Porter, and ahead of popular books like Blue Ocean Strategy. He (and his teammates at Bain) just absolutely prove beyond a shadow of a scintilla of a doubt that customer retention is the best profit model going–better even than being the low cost producer. He shows it in industry after industry.

The early work he did in this area was done jointly with some very solid Harvard Business School faculty, notably Len Schlesnger (who went on to be a Big Cheese at The Limited), and Jim Heskett and Earl Sasser, total kings of the faculty at HBS.

Very solid stuff. Rest easy, you didn’t misquote. But it is a damn shame that such a powerful book has come to be noted as an “unconfirmed report.” It is way better than that. Check it out. Buy it. Quote more from it.

Charles H. Green
Author, Trust-based Selling
co-author The Trusted Advisor