Scorecards Quantify Customer Relationship Management
There was once a time when General Motors knew and thrived on the fact that customers would buy any car it made. This was before the Japanese car manufacturers entered the U.S. market with great looking, low-cost cars. GM still didn’t realize the change in customer preferences and now the world sees the originator or many quality process controls file for Chapter 11. The Japanese on the other hand use the word okyakusama, meaning both ‘customer’ and ‘honored guest’.
Volumes on top of volumes have been written about the importance of customer relationship management and many thriving businesses are doing so for their great customer service ability. Home Depot’s service philosophy, called the best service philosophy in the United States by Wal-Mart’s CEO, states “every customer has to be treated like your mother, your father, your sister or your brother”.
A Balanced Scorecard adds greater effectiveness to this philosophy by giving the company measures and metrics along which to pursue its customer relationship policy while staying true to the business strategy and vision. The Balanced Scorecard is both a management as well as measuring system that takes into account both financial as well as non-financial perspectives of planning and implementing a business strategy. While allocating funds towards business promotion and customer service is essential, it is not the end-all solution. The Balanced Scorecard gives the Customer perspective its due place in the company’s setup; the company serves its customers according to its vision, and the vision when dictating the customer relationship strategy inherently carves out the market segment the company can serve best.
The Balanced Scorecard makes tangible use of customer satisfaction surveys and transforms them into metrics to gauge customer satisfaction, reasons for customer turnover, best practices in the industry, etc. It also takes into account the cost of customer service and support.
A rise in number f customer complaints does not necessarily mean hiring more customer service reps, it may be that something is wrong with the internal business processes and is resulting in customer dissatisfaction. Since the Balanced Scorecard treats employees as internal customers of the company, it highlights the need for employee satisfaction. While at face-value pairing employees with outside customers may seem questionable, a second thought highlights that companies invest huge percentages of their revenues into employee training, and lack of employee satisfaction which ultimately leads to greater turnover, means a loss of both the investment as well as a competitive edge.
Simply put, an unhappy employee will take his/her frustration out on the job and ultimately the external customer. The Balanced Scorecard approach to customer relationship management ensures that all the bases are covered. By imbibing a sense of ownership and adequate knowledge into the employees, the company ensures that it is at par with its competitors and stands a might chance of outdoing them.
