The Balanced Scorecard: Translating Strategy Into Action by Robert S. Kaplan, David P. Norton Page B
Authors: Robert S. Kaplan, David P. Norton
Tags: Non-Fiction, Business
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what is basically a commodity business, used advertising to communicate certain nonobvious features of its product, like purity that helped keep engines “clean” and free of sludge. Several investment banking firms convey an image of personalized, high-quality financial advice and service, and the “Big 6” accounting firms attempt to establish a reputation for quality and integrity that distinguishes them from smaller, more regional competitors.
The image and reputation dimension enables a company to proactively define itself for its customers. Rockwater, for example, wanted to outgrow an image dating back to the boom years of the early 1970s in which underwater engineering construction companies were viewed as a collection of guys, equipped with wet suits, scuba gear, and welding guns, jumping off barges into the North Sea. The construction of the Balanced Scorecard and the establishment of customer-based objectives and explicit feedback about the value propositions it delivered to customers were intended to convey a new professionalism about the way the company would do business. It would be part of the process by which Rockwater communicated to Tier 1 customers that it was now a technologically sophisticated, trusted, and valued partner capable of engaging in long-term supplier-customer relationships.
Kenyon Stores, a large clothing retailer, developed an image of who its targeted customers were.
Range: 20–40-year-old female (target: 29 years)
College educated
Works full-time in professional executive position
Innovatively fashionable
Self-confident, great sense of humor
It then communicated this targeted customer image externally through a variety of advertising and in-store promotional material.
By communicating a clear image to potential customers, the store enables its existing and future customers to imagine themselves fitting an image associated with purchasing clothes at Kenyon. The company creates for its customers, an image of who they can be, in addition to selling them fashionable clothing of high quality at reasonable prices. Thus companies attempting to exploit the image and reputation attribute define their ideal customer and attempt to influence customer buying behavior by the image associated with purchasing from them.
We can illustrate the development of customer value propositions across product and service attributes, relationship, and image and reputation with case studies of Kenyon, Rockwater, and Pioneer Petroleum.
KENYON STORES: DIRECT SELLING TO MASS MARKET
Kenyon Stores started the development of its customer objective by defining a customer strategy:
Kenyon must increase its customer share of wardrobe.w
Increased share of wardrobe will be achieved by customer loyalty: We want the customer to visit us throughout the year and come to Kenyon for the complete range of her lifestyle needs.
To create this loyalty:
Our merchandise must define our customer, her needs and aspirational image.
Our brand must satisfy the customer’s aspirational and lifestyle goals.
Our shopping experience must promote customer loyalty.
We must do a superb job of defining who our customers are and their buying behavior.
Kenyon used customer loyalty and customer feedback scores for its core customer outcome measures. The performance drivers for these measures were derived from the strategy statement. These drivers represented objectives and measures in the three elements of value propositions.
Product Attributes
Kenyon identified three objectives as key product attributes for its consumer value proposition: price, fashion, and quality. The price objective was stated as:
Provide fashion and quality that the customers perceive as high-value and consider to be fairly priced.
The measures for this objective were the average unit retail price that the retailer wanted to maintain (i.e., no price discounting) and the number of transactions per store.
The fashion and design objective was to:
Provide
The image and reputation dimension enables a company to proactively define itself for its customers. Rockwater, for example, wanted to outgrow an image dating back to the boom years of the early 1970s in which underwater engineering construction companies were viewed as a collection of guys, equipped with wet suits, scuba gear, and welding guns, jumping off barges into the North Sea. The construction of the Balanced Scorecard and the establishment of customer-based objectives and explicit feedback about the value propositions it delivered to customers were intended to convey a new professionalism about the way the company would do business. It would be part of the process by which Rockwater communicated to Tier 1 customers that it was now a technologically sophisticated, trusted, and valued partner capable of engaging in long-term supplier-customer relationships.
Kenyon Stores, a large clothing retailer, developed an image of who its targeted customers were.
Range: 20–40-year-old female (target: 29 years)
College educated
Works full-time in professional executive position
Innovatively fashionable
Self-confident, great sense of humor
It then communicated this targeted customer image externally through a variety of advertising and in-store promotional material.
By communicating a clear image to potential customers, the store enables its existing and future customers to imagine themselves fitting an image associated with purchasing clothes at Kenyon. The company creates for its customers, an image of who they can be, in addition to selling them fashionable clothing of high quality at reasonable prices. Thus companies attempting to exploit the image and reputation attribute define their ideal customer and attempt to influence customer buying behavior by the image associated with purchasing from them.
We can illustrate the development of customer value propositions across product and service attributes, relationship, and image and reputation with case studies of Kenyon, Rockwater, and Pioneer Petroleum.
KENYON STORES: DIRECT SELLING TO MASS MARKET
Kenyon Stores started the development of its customer objective by defining a customer strategy:
Kenyon must increase its customer share of wardrobe.w
Increased share of wardrobe will be achieved by customer loyalty: We want the customer to visit us throughout the year and come to Kenyon for the complete range of her lifestyle needs.
To create this loyalty:
Our merchandise must define our customer, her needs and aspirational image.
Our brand must satisfy the customer’s aspirational and lifestyle goals.
Our shopping experience must promote customer loyalty.
We must do a superb job of defining who our customers are and their buying behavior.
Kenyon used customer loyalty and customer feedback scores for its core customer outcome measures. The performance drivers for these measures were derived from the strategy statement. These drivers represented objectives and measures in the three elements of value propositions.
Product Attributes
Kenyon identified three objectives as key product attributes for its consumer value proposition: price, fashion, and quality. The price objective was stated as:
Provide fashion and quality that the customers perceive as high-value and consider to be fairly priced.
The measures for this objective were the average unit retail price that the retailer wanted to maintain (i.e., no price discounting) and the number of transactions per store.
The fashion and design objective was to:
Provide
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