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Linking employee and customer loyalty

In an age of job hopping and mass layoffs, loyalty between firms and employees is scarce.

Only half of all frontline employees - those who regularly interact with customers - say their employer is worthy of their loyalty, says Frederick Reichheld, author of "The Loyalty Effect." He also surveyed "loyalty-leader" companies, such as Enterprise Rent-a-Car and Southwest Airlines, to establish best-performance benchmarks.

The answers from such highly regarded firms revealed differences not only in how employees feel, but also in how loyal their customers are. "The only way a company can build a loyal customer base is by building committed relationships with the employees responsible for serving those customers," said Mr. Reichheld.

Among the study's findings:

• While 87 percent of senior executives in all companies polled said their firm deserved loyalty, only 51 percent of frontline employees agreed. Responses at loyalty-leader firms (79 and 75 percent, respectively).

• Frontline employees at typical firms feel worse about their employers the longer they stay there.

• 93 percent of the loyalty-leaders' customers said they were satisfied, compared with less than 70 percent of all companies' customers.

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