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How are we measuring that we are delivering value to our customers?

Module 1: Five questions every CEO must answer

There are three ways to measure whether you’re delivering value to your customers:

  1. Activity
  2. Outcomes
  3. Productivity

Measuring activity

You need to have activity before you can have outcomes or productivity. Measuring how you’re spending your time, or quantitative results about your output – boxes packed, sales calls made, visitors to your trade booth, etc – can deliver important insights. Sometimes you realise that you aren’t accomplishing your goals because you haven’t engaged in enough activity – maybe you haven’t called customers, sent Christmas cards or made yearly visits to customer’s offices.

Sometimes you can discover a break-down in delivering value by just looking at your outcomes measures

Measuring outcomes

Sometimes you can discover a break-down in delivering value by just looking at your outcomes measures – these might include the number of boxes packed correctly, how many sales calls converted, or how many booth visitors trialed your product. For instance, if you send the wrong invoice to a customer, or make a lot of errors when installing blinds, or aren’t able to do a decent demo at your booth, then those are problems that could shake a customer’s confidence in you or make a prospect think twice about buying your product.

Measuring productivity

Examples of measuring productivity may be the numbers of boxes packed correctly each hour, the numbers of sales conversations this week, or the length of time visitors wait in line to trial your product. Productivity relates to efficiency and that often relates to the price you need to charge to cover your costs. If you can become faster and more efficient in packing boxes or converting sales, or enabling prospects to trial your new product, the prospect or customer will likely see that as a positive and will assume you are value-adding.

Think about what measures you use to demonstrate that you are delivering value to customers, then consider how often you measure them. Here are some prompts of what you might measure:

  • Product adoption: number of sales or amount of revenue generated from sales per week, month and year, compared to a year ago.
  • Speed of purchasing: orders per day, re-orders, and back-orders, compared to this time a month ago, last quarter, last year.
  • Customer satisfaction: increasing or decreasing number of customer compliments or complaints each week.
  • Social media: number of positive (and negative) mentions of your products or company on social media this past week, month, year.

Use this list to develop your own list of measures. Forbes reported that Amazon tracks 800 measures, with well over 50% of them related to customers and their level of satisfaction. They are clearly focused on discovering the value they add to customers and using this information to grow.

Productivity relates to efficiency and that often relates to the price you need to charge to cover your costs

As CEO, your task is to decide which measures signify value to customers, and then how frequently to measure them. Be very clear with your executive team, your sales people and employees about what you are measuring, how often, and why – so that you can be sure your company is delivering the value your customers want and need.

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₁ ‘The Future of Amazon, Apple and Google’, Steve Dunning, Forbes, 9 April 2015.

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