Last week I discussed the concept of the balanced scorecard, a framework for managing and measuring both the financial and nonfinancial aspects of your business. The balanced scorecard concept is used extensively in business, industry, government, and nonprofit organizations, and it may be especially helpful as you set company goals for the coming year. This week I want to hone in on two of the four categories on the balanced scorecard: financial and customer perspectives.
The financial part of the scorecard puts forth the central question: How should we appear to our shareholders? Timing and accurate financial data is critical for the success of any business or organization. Some of the factors that need to be addressed in financial goals include:
- Market share;
- Revenue growth;
- Profit ratio;
- Return on investment;
- Operation costs; and
- Process costs.
When addressing the customer perspective you should begin by asking yourself: How is my company perceived by customers and potential customers? Studies have shown a direct correlation between an organization’s focus on customers and customer satisfaction. It’s critical in this perspective to focus on different markets or types of customers (including potential customers), their degree of satisfaction and the processes to deliver services or goods to the customers. See that you focus on the specific areas of:
- Customer service;
- New products or services;
- New markets;
- Customer retention and growth; and
- Strengthening customer relationships.
The balanced scorecard allows you to use these perspectives as a tool to view your organization’s functionality to create metrics or indicators, then collect and analyze this data to help the company change or continue with its current strategic plan.
Let Zions Bank’s Business Resource Center assist you with your business needs. Call us for a free appointment at (801) 594-8245. We are open Monday through Friday from 9 a.m. to 5 p.m. Beth Holbrook can be reached at email@example.com.