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The Customer Service Perspective, Capstone Project Example

Pages: 1

Words: 935

Capstone Project

Introduction

The three Small and Medium-sized (SMEs) companies are Hyde Park Electronics, Futura Industries, and Southern Gardens Citrus. They intend to apply the Balanced Score Card (BSC) approach in achieving their mission, vision and objectives. The three companies are in different industry setting. However, their mission and vision are similar. Therefore they can set similar objectives to achieve their goals independently (Kaplan, 2005).

The three missions are the same: “To be market leaders in retail sales by providing goods and services to the customer satisfaction” and three visions are same: “Excellence in retail selling with the ultimate goal of satisfying the customer wholly”

Thus they focused on the Customer Perspectives which seeks to answer the question: “To achieve our vision how should we appear to our customers?” The three SMEs should focus on the following specific categories of customer concerns:-

The companies measured the performance of the business considering specifically targeted sections using parameters such as time, quality, performance as well as cost. To measure time requisite for the company to address the needs of its customers, customer retention was used as to how well the companies were retaining their existing clientele, customer loyalty as well as percentage of growth due to existing clientele. Quality was measured using customer satisfaction; that is providing feedback on how well the company is doing; its customer’s complete buying experience. This includes uniqueness of its products, functionality in terms of responsiveness, quality, price as well as time. Company performance was measured in terms of the market share; the percentage of the market the companies controlled, separately; customer profitability; that is profitability of the company in the targeted client segment. Finally cost was measured in terms of account share i.e. the account share of those customers’ business with the company, new client acquisition; that is number of new customers, total sales to new customers as well as number of customer responses to solicitations and the conversion rate, solicitation cost for each new client acquired, etc (Gumbus & Lussier, 2006).

Analysis

The Market share measure is “customer-centric” because it measures how deep the company has penetrated the market as compared to its competitors. The more the customers the greater is its market share.

Account share; that is, the share of the account those customers’ business in relation to the overall customer accounts. This is not “customer-centric” because it assesses how much money a particular customer brings into the company compared to the others.

Customer retention; that is, retaining existing clientele; customer loyalty as well as proportion of growth as a result of the existing clientele. This is “customer-centric” because it focuses on whether the existing clientele are still being retained and seeks to evaluate their loyalty to the company and measures the growth of the company on the basis of the existing clientele.

New clientele acquisition; that is,  figure of new clientele, sum of sales to new clientele, number of responses of the  client to solicitations along with the rate of  conversion and also solicitation cost for every client acquired. This is “customer-centric” because it focuses to attract new customers through solicitations and conversions (Niven, N.D.).

Customer satisfaction; that is, provides comment on company performance as well as customer’s absolute purchasing experience. It comprises exceptionality, functionality, value, price, time. It is also “customer-centric” since it focuses on merely what the customer says and pays tribute to the customer’s complete buying experience. The company can incur additional overhead to satisfy the customer without matching revenue to cover the cost (Gumbus & Lussier, 2006).

Customer profitability; that is measures both the extent which the companies do business with the clientele and also assesses the productivity of the company in the perspective of targeted client sector. This monetary gauge facilitates client -focused firms from being buyer-obsessed hence it is not “customer-centric”. This is because it assesses the customers from the point of view of how much business they are bringing into the company as well as their profitability to the company (Kaplan, 2005).

Conclusion

The improved performance of the companies was due to their focus on the customer perspective. This approach enabled them even to make some revisions in their financial perspective. For instance, the objective to reduce time taken to meet their customers’ needs identified a need for re-allocation of resources such that they could spread into the financial requirements to purchase machinery and vehicles, inter alia. It is due to the quality objective that the companies embarked on measures to improve it at every production stage which led to the retention of the existing clients and the introduction of new ones due to reduction in the level of defects which in turn led to growth in profitability as well as growth in sales volume. Cost control and customer price-cuts meant more sales which in turn meant higher company performance. When customer value was created through lower prices and quantity discounts it triggered of a new demand by customers leading to higher volume of sales and ultimately higher revenues.

Evaluation

The rate of Return on Investment (ROI) should have been included. This enables the management to know the additional revenue generated for having allocated a higher budgetary investment in a particular line of production. For instance, the additional resources to be injected in order to meet the objectives in the customer perspective require to be assessed in terms of additional revenue they are expected to generate in order to be matched with the additional cost incurred (Kaplan, 2005).

References

Gumbus, A. & Lussier, RN. (2006). “Entrepreneurs use balanced scorecard to translate strategy into performance measures”.  Journal of Small Business Management. 44(3):407-426.

Kaplan, RS (2005). A Balanced Scorecard Approach To Measure Customer Profitability. Working Knowledge. Harvard Business School.

Niven, P. (N.D.). Customer perspective. EPM Review.

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