Return to Cardinal measures

Customer outcomes

  • All organisations have two kinds of customer – external and internal:

    • External customers – They decide whether or not to buy or use the products and services you offer them – whether you offer them value/ benefits

    • Internal customers – They are fellow-workers further ‘down the line’ who depend on you to supply them with information, services, semi-finished goods or paperwork so they can complete their work

  • External customers want fair prices and ever-increasing quality and service levels

  • Internal customers don’t want shoddy or late work passed on to them – it creates extra work for them, causes delays and increases costs

  • Most external customers are met and dealt with by just a few salesmen or ‘front-line’ staff – over 90% of employees, including most managers, have no contact with their external customers and so no direct knowledge of how they feel about what is offered them

  • It’s much the same with internal customers – teams at one stage in a process have little idea how well any work they pass on is being received by others ‘further down the line’ – often, there are no feedback systems or measures in place so complaints, extra costs and unnecessary delays go unappreciated

  • So, how to find out what customers think given they ‘pay the piper’ and their choices determine your very existence?

  • The best way is to ask them – to conduct customer surveys in a structured way

  • The same applies to your non-customers, your potential customers – you need to understand why they prefer other suppliers, and what it would take for them to switch to you

  • Too many organisations just rely on proxy measures of customer satisfaction viz:

    • Snapshots and trends in revenue and profits per customer

    • Repeat business percentages

  • But what if apparently loyal customers are becoming increasingly dissatisfied with your offerings for one or more specific reasons?

  • You may not find out until it’s too late

Price Index – PI

To sample your existing and potential customers’ views on the VFM you offer, first define what is meant by ‘Value for Money’                                 VFM = The degree to which a customer’s requirements are met             …

Quality Index – QI

Given it’s your customers who decide the quality factors most important to them when making their buying decision, first establish their top ten criteria Then ask a sample of customers to rate each factor with a mark out of 10 where 10 is very good, 0 very poor – and calculate their average mark per …

Service Index – SI

As with quality, it’s your customers who decide the service factors most important to them when making their buying decisions And it’s their ratings of those factors, not yours, that matter most so, again, first establish their top ten service factors and then ask a sample of them to rate each one The results might …