Service Value combines costs and benefits to evaluate the value of the customer relationship for better performance management.
Quantifying customer risk issues and resolution efforts provides the cost overview. You can quantify some issues, such as cost per call; while others, such as late deliveries, can be categorized through a service level index. You also need to categorize the benefits, using a lifetime revenue metric or strategic value index based on expected revenue.
With this decision area, you can set more accurate priorities for use of resources. Poor service performance in simple channels may require more investment in process automation and improved efficiency. While performance issues in complex channels point to increasing investment in skills, expertise and decision-making support.
With the Service Value decision area, you can set planning goals and scorecarding metrics for these performance management elements:
- Lifetime profit ($).
- Service cost (%).
- Service effectiveness index.
- Claims (# and $).
- Customer retention and service cost ($).
- Customer visits.
Most importantly, you can analyze these goals and metrics by a number of dimensions to find the hidden gems behind your performance:
- Fiscal month/year.
- Customer and industry.
- Carrier/distributor.
- Lead time and on-time range.
- Brand and product line.
- Location
Using the Service Value decision area
You set targets based on your goals and metrics in Service Value. You monitor your success by looking at how you measure up against your objectives. Further, you dive into your results to find what underpins your performance.
- Service cost ($) : Are we reaping the rewards of Customer Service, what are they, and how much has it cost?
- Customer retention cost($): Do we incur higher costs in the short term to secure long-time customer loyalty?
- Service effectiveness index : Do we need more process automation to improve speed and efficiency?
