I don’t know in academics, but in strategy consulting there are a lot of data that support having repeat business is critical. Fred Reicheld, customer loyalty expert at my former firm Bain, praises customer loyalty as the single most important thing for a business success.
Market share is often correlated with higher profitability, but I think they are special cases (whereas customer loyalty is always a determinant) or sometimes a misinterpretation of causality. Toyota didn’t become the most profitable auto maker because they achieved the largest scale. They made good cars, which generated repeat business and good reputation which then made them grow scale.
In my experience, all of the businessmen who enjoy long-term success have a high standard of professionalism and morality. As David Maister, another business consultant I respect, says we should do the right things because it is also a good business.
3 years ago