Guide

Measure performance and set targets

Customer focused performance measurement

Customer-focused performance is a business approach to measuring performance in terms of customer retention, customer satisfaction, service response time, etc. Under this approach, all processes in your business are tailored to meet customer requirements and satisfy their expectations.

Customer-focused KPIs

To measure performance of a customer-focused business, your key performance indicators (KPIs) should also be customer-centric. Some common metrics to track are:

  • customer satisfaction score - eg through numbers, stars, smiley faces, etc
  • net promoter score - measures how likely your customers are to recommend you
  • first response time - the speed of response is a great market for customer satisfaction
  • customer retention rate - your ability to keep a customer over time
  • quality of service - including reliability, assurance and responsiveness
  • employee engagement - staff motivation can affect quality customer service

See how to use KPIs to assess business performance.

When reviewing your business' performance, as well as customer satisfaction, you'll need to assess your customer base and market positioning as a key part of the process.

A strategic business review can help you re-evaluate market factors such as:

  • changes in your market
  • new and emerging services
  • changes in your customers' needs
  • external factors such as the economy, imports and new technology
  • changes in competitive activity

Importance of customer feedback

Customer feedback is essential - the more you know about what your customers think and want, the easier it will be to handle increased numbers of customers. Look for as many ways of capturing this information as possible, including:

  • sales data - what your customers choose to buy (or not to buy) provides the clearest indication of their preferences
  • complaints - but remember that many customers will simply switch suppliers before making a complaint
  • questionnaires and comment cards - a very useful source of information, so consider using incentives to encourage more customers to complete them
  • mystery shopping - having someone pose as a customer for research purposes can give a very clear sense of how well you are performing

See how to gather customer feedback.

Download a customer service evaluation example (PDF, 20K).

Asking for customer feedback helps to identify where you can make improvements to your products or services, your staffing levels or your business procedures. See how to manage your customer service and understand your customers' needs.

Business performance reviews of this kind can be very effective - they can give your business the flexibility it needs to beat off stiff competition at short notice. However, think through the implications before you make any changes. You'll need to plan your finances and resourcing carefully at all times.

Manage customer information and relationships

Customer relationship management (CRM) software can be a powerful tool for capturing and analysing information about your customers and the products and services they purchase.

CRM also enables you to push up customer service levels by ensuring that all customer-facing staff have ready access to each customer's history.

Grow your customer base

Selling more to existing customers might be the easiest way of increasing sales, but most businesses aiming for significant growth will need to find ways of reaching new groups of customers. See how to retain and grow your customer base and increase your market share.