It is perhaps a truism that focusing on the needs of the customer is a more appropriate way to run a business than using the numbers to see how we have been doing.
Even worse is the technique (if we can call it that) of selling capacity rather than offering what the customer wants and needs.
Most organisations forget, or worse, don't even realise, that the customer is always thinking “what’s in it for me” and then go on to measure "what's in it for us" using lagging key indicators such as profit, sales and debtor days when looking at the numbers.
While there is value in knowing the current position, these measure what has happened in the past rather than what is going to happen in the future.
Managing the business by focusing on past performance is much the same as driving a car by looking into the rear-view mirror. The challenge is to create value for the customer and find ways to measure "what's in it for the customer."
Future customer-focused key indicators are by far the best means for determining the direction in which the business is going and there are many which can come under that heading.
A typical example is on-time delivery which is an excellent indication of how well the business is currently functioning. If all of the operations are running smoothly, there's a good chance that on-time delivery is within acceptable parameters.
The key here is under-promise and over-deliver. In other words give a realistic and rather conservative estimate of delivery time, and then beat it. A neat point is to call the customer to say that you’re sorry but you plan to deliver a day or two early – will that be alright?
Another key indicator is the time you take to answer an enquiry. Customers and clients will take your speed of response as an indication of your interest in their enquiry and after all, their enquiry is what matters to them.
Professional firms can be noticeably lax in their response to clients’ enquiries and actually delivering on the “I’ll call you back in a couple of hours” is often a vain hope.
Remember that the client or customer assesses everything on the WIIFM basis – that is,
What’s In It For Me? How will I benefit from this, not how will YOU, the supplier, benefit.
Accordingly make sure that your Key Performance Indicators are not lagging but leading, that is, are customer focused not past performance focused.
It is, of course, essential that you measure everything and keep records of what happens. It will mean the collection of new forms of data as well as the normal monitoring of the financial numbers but the effort is well worthwhile.
Do it well, and the financials will demonstrate the value of what you are doing.
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