SBP019 When Choosing KPIs ask what does your Customer Want?

1 rich Libsyn https://www.libsyn.com 90 600 SBP019 When Choosing KPIs ask what does your Customer Want? When choosing KPIs, always start by defining who the customer is.&nbsp; So the next logical step is to figure out what the customer is looking for.&nbsp;&nbsp; A common mistake I see all the time is that KPIs are set as Customer KPIs when in fact the customer doesn’t value that measurement and benefits nothing from it. For example, a sales department crafted a few customer KPIs:&nbsp; $ Value if Gross Profit&nbsp; % Gross Profit&nbsp; $ Value if Annuity Business&nbsp; $Cost of Customer returns&nbsp; &nbsp; From the above examples, you can see that the customer has received no benefit from these.&nbsp; &nbsp; Instead we should be asking how would the customer want to measure you as a supplier?&nbsp; &nbsp; The answer to that question would like very different:&nbsp; # of returned shipments due to Poor quality&nbsp; # Mistakes on documentation&nbsp; % Variance to lowest product price&nbsp; % Product returned for Poor Quality&nbsp; % Due Date met&nbsp; # Avg time from order to Delivery&nbsp; # Executive Engagements&nbsp; % Net Promoter Score&nbsp; Can you see the difference?&nbsp;&nbsp; All of these KPIs are of value to the Customer and right now your customer might be measuring you on the achievement of them.&nbsp; &nbsp; There are 3 Value propositions which we can discuss&nbsp; &nbsp; Value for money (or a no frills offering)&nbsp; Customers want a product quality that is fit-for-purpose and where the delivery is&nbsp;predictable.&nbsp; It must be relatively easy to do business with you and there doesn’t need to be a&nbsp;huge variety of products to choose from. The price needs to be competitive even&nbsp; if it’s not the lowest. Price will, however, become a discussion point if quality and&nbsp;delivery are lacking.&nbsp; In times like these customers want a great offering at a great price. They love&nbsp;champagne, but invariably only have money for beer.&nbsp; There are world-class companies that do this such as Walmart, Toyota,&nbsp;Macdonald’s.&nbsp; 70% of my customer are looking for the price as the #1 value driver&nbsp; &nbsp; KPIs&nbsp; &nbsp; % Repeat Business&nbsp; % On time and In full deliveries&nbsp; #Average order lead time&nbsp; % Credit Note to Sales&nbsp; &nbsp; The trick for you is to ensure you measure the same in your internal systems.&nbsp; &nbsp; &nbsp; 2. One stop shop&nbsp; This is the Customer Solutions model. You supply the customer with many&nbsp; customized products and services and can be integrated into their supply&nbsp;chain.&nbsp; Relationships on the ground are key as you increase the mix of services to&nbsp;product.&nbsp; Companies that do this well include Microsoft and IBM,.&nbsp; 20 to25%&nbsp; &nbsp; KPIs&nbsp; % Contract renewals&nbsp; Value of Referral Business&nbsp; % Customer Satisfaction – you can use some sort of survey to get this information&nbsp; % Net Promotor Score&nbsp; Value of ROI from Joint Customer Initiatives&nbsp; &nbsp; &nbsp; 3. Product Leadership&nbsp; &nbsp; &nbsp; Product leadership means providing cutting edge premium products. They are not&nbsp;to be confused with fit-for-purpose quality products as they have a much higher&nbsp;and superior quality and, perform at a much higher level.&nbsp; Suppliers of leading products should earn a superior margin in order to service the&nbsp;additional costs these products require,&nbsp;&nbsp; such as innovation costs,&nbsp;&nbsp; research costs,&nbsp;&nbsp; handling costs and,&nbsp;&nbsp; branding costs.&nbsp;&nbsp; In addition, be wary of launching innovation&nbsp;projects that aren’t led by customer data as this can cause an unnecessary&nbsp;reallocation of resources away from productive and profitable activities.&nbsp; Companies that do this include Mercedes Benz, BMW, Apple, Gucci Clothing.&nbsp; 5to10%&nbsp; &nbsp; KPIs&nbsp;&nbsp; # Innovation Awards&nbsp; % Brand Awareness&nbsp; # Average Ranking in Product Reviews&nbsp; # New features per annum&nbsp; # Average score in independent reviews&nbsp; &nbsp; &nbsp; The trick for you is to ensure you measure the same in your internal systems.&nbsp; &nbsp; Tip&nbsp; Make sure your Customers would value your&nbsp; Customer KPIs&nbsp;&nbsp; Smart Business Performance Podcast https://www.kpims.co.za <iframe title="Libsyn Player" style="border: none" src="//html5-player.libsyn.com/embed/episode/id/16460834/height/90/theme/custom/thumbnail/yes/direction/forward/render-playlist/no/custom-color/88AA3C/" height="90" width="600" scrolling="no" allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen></iframe> https://assets.libsyn.com/secure/content/86706365