Mystery of Missing Loyalty Effect
It would be nice if the link between customer loyalty and profit were simple, clear and easy to prove. The theory is certainly attractive: Customers with high satisfaction and commitment levels form a bond with a company, and this bond leads to a variety of desirable behaviors. Loyal customers stay longer, spend more, complain less and make recommendations to their friends and family. If companies invest in loyalty, the theory goes, they will be rewarded with more customers and greater profit.