The Manila Times
Business Times B.1
Thursday, December 16, 2004
LEARNING & INNOVATION
By Moje Ramos-Aquino
Measures for your customer satisfaction
Yup, we have the same title as last Thursday’s column. This is a direct continuation of that article. To refresh your mind, last week we discussed three ways of creating your customer value proposition according to authors Michael Treacy and Fred Wiersema: operational excellence, product leadership and customer intimacy.
We also said that you need to decide which of these creative ways you want to adopt because you cannot be and do all of the above. You know, jack-of-trades-master-of-none thingy.
Treacy and Wiersema ask: Why is it that Casio can sell a calculator more cheaply than Kellogg’s can sell a box of cornflakes? Does corn cost much more than silicon? “Today’s market leaders understand the battle they’re engaged in. They know they have to redefine value by raising customer expectations in one component of value they choose to highlight. Casio establishes new affordability levels for familiar products. Casio thrives because they shine in a way their customers care most about, not in all the way. They have honed at least one component of value to a level of excellence that puts all competitors to shame.”
Going back to the Balanced Scorecard segment of our Journey on Entrepreneurship, Paul Niven, author of Balanced Scorecard Step-by-Step, asserts that the value proposition you select will greatly influence the performance measures you choose since each will entail a different emphasis.
For your Balanced Scorecard, Niven suggests these sample measures of how well you are creating and delivering customer value: Product prices, prices relative to competition, product availability, inventory turnover, stockouts, customer satisfaction, customer loyalty, market share, customer complaints, complaints resolved on first contact, return rates, response time per customer request, direct price, total cost to customer, average duration of customer relationship, customer lost, customer retention, customer acquisition rates, annual sales per customer, percentage of revenue from new customers, number of customers, win rate (sales closed/sales contracts), customer visits to the company, hours pent with customers, marketing cost as a percentage of sales, number of ads placed, number of proposals made, brand recognition, response rate, number of trade shows attended, sales volume, share of target customer spending, sales per channel, average customer size, customers per employees, customer service expense per customer, customer profitability and frequency (number of sales transactions).
It is important that you include lag measures and lead indicators for your Scorecard to track your strategic and operational progress.
Happy birthday, Jesus! The beauty of Christmas is that it gives us a license to dream big dreams. In these trying times, it offers us a reason to be optimistic and cheerful. My wishes for this Christmas and 2005: President Arroyo to do what is right not what is popular. The Manila Times to be read by more people to enable it to reclaim its number one position in the print media industry.
All of us Filipinos to love our country by caring more for our fellow Filipinos and our environment and altogether dropping our self-centeredness. Filipinos especially children to read more books and plant more trees. For people to have a painless and peaceful death. More Filipinos especially retirees to volunteer to do good causes.
We’ll continue this list if you share your own list with us. Please e-mail them to firstname.lastname@example.org. God listens and might just grant us our wishes.
(Moje, president of Paradigms & Paradoxes Corp., assist organizations in their Strategic Thinking, Planning, Balanced Scorecard, Change Management and Talent Development initiatives.)