Customer measures ► ► ►
The major measure here is customer satisfaction. Measuring customer satisfaction—from the value proposition that the organisation expects to deliver to customers—is a critical strategic measurement. Customer satisfaction can be broken up into its components of value, such as quality of the product or service, speed of delivery, satisfaction with customer service, phone answering speed, and accuracy of information given. However, unless these are related directly to the strategy that the organisation is pursuing, these are operational level supporting variables.
Another important variable—the most quoted—is market share. In smaller countries (unlike in the US) market share information is often not available or is of question able accuracy, but it should still be sought. Market share is only an indirect measure of customers' views. For instance, Telstra has a major share of the Australian phone market, and four major banks dominate the Australian banking industry, but this does not mean that their customers are satisfied!
Other measures that may be strategically important include customer retention, new customer acquisition, and customer profitability by segment. For instance, the costs of acquiring new customers are much greater than the costs of retaining existing ones, yet new customer acquisition may be a source of long-term future value. Each may be of particular strategic value. Understanding customer segment profitability greatly assists in determining which segments to target. Strategy @ work 5.2 shows how customer profit¬ability for a local bank varies substantially.