Customer measures needed

Once, supply of most goods and services people wanted to buy was limited – suppliers thus had the whip-hand – for example, Ford could offer their ‘Model T’ cars using the strap line “any colour so long as it’s black”

Those days are long gone

Mid 20’th century and on, competition between suppliers started to become serious – first nationally, then globally – seeing profits being made by a few vanguard suppliers, others quickly moved in to their markets, some with new and better ways to do things and offerings for customers

The result of all this competition between suppliers is that customers now determine what and how much they sell (except when the supplier is a public sector monopoly offering an essential service the public cannot do without)

Initially, price was their main criteria for making their buying decisions – but, in the 70s/ 80s, quality and then service levels offered soon grew to be equally as important to most customers

Value for money was what most sought – if the price was high, quality and service levels were expected to be high – pay for a five star hotel and expect Savoy or Ritz standards, for example – pay for a one star B&B and expect a good night’s sleep, clean linen and a tasty ‘full English’ breakfast – both would be deemed ‘good value for money’

Hence, all suppliers, given the star rating they target, need to know what rating their customers give to the price charged versus the quality and service levels received – and, if the quality and service levels are below ‘top box’, they should seek to identify those specific criteria (used by customers, not assumed by suppliers) where they’re judged not to have performed well – and put them right quickly before their sales suffer badly

And the only way suppliers can do this is by conducting regular surveys of a sample of their customers whilst being wary of the many pitfalls connected with doing this

Last, a new major buying criteria has recently become important to many customers, inevitably attracting yet another TLA (Three Letter Acronym) – this time it’s CSR (Corporate Social Responsibility)

More and more customers will avoid suppliers who apparently show no concern for human or animal welfare, dodge paying fair taxes, damage the environment or sell products which are bad for their customers in order to feather their own nests

To counter this possibility, some companies now make ‘ethical statements’ in their annual accounts – and Big Four accountancies such as PWC and KPMG now claim they can measure corporate reputations enabling them to identify where they’re wanting

P.S. There are many other more detailed customer measures possible (e.g. sales or profit per customer, % repeat business) but they all depend on a supplier getting the above cardinals right in the first place

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