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Blog 4: Customer chains – do I have any?
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Blog 4: Customer chains – do I have any?

We were invited by the Management Team at an organization that worked in the coffee industry. Talking together, we soon came across the concept of customer chains. They asked what exactly customer chains were. ‘A customer chain is an abstraction of a process. Do you have processes?’ we replied.  ‘Yes we do’, the head of sales told us, citing the quotation process as an example. ‘It is indeed true that this is an example of a process, but you are still thinking from departments,’ we pointed out. Then head of Purchasing told us that they see the Purchase to Pay process as the main process. ‘Also an interesting process, but you do something with coffee, don’t you?’ we asked in amazement.

After closing the deal, the sales process continues

Peter Geelen – iPM Partners

Process

The fact is, every organization has customer chains, but most organizations don’t know about them. This is rather strange, because customer chains deliver performance and bring strategy to life. Indeed, the essence of customer chains is that you really look from the customer’s point of view. The customer chain starts with a concrete need and ends with filling that concrete need, usually by delivering a concrete product or service. A customer may well understand that he gets an offer, but ultimately the customer comes for the product or service. So the question “You do something with coffee, right?”, can be translated into “What concrete products and services does your organization provide?”.  With the given answer “We install coffee machines”, the question follows where this customer chain then starts. This chain starts with the need of (future) customers to have such a vending machine, so that guests or employees can enjoy delicious coffee. Thinking from customer need to the fulfilment of that customer need creates customer chains. Organizations often have more than one. Customers also start customer chains when there is a need for coffee beans and ingredients or when there are breakdowns on a coffee machine. All kinds of triggers to think about what customer chains organizations can have.

As soon as one zooms in on a customer chain, the requested cooperation becomes clear. If a customer wants to shop for a new coffee machine, Sales (or Online) will be the party to contact the customer about this. After closing the deal, the sales process continues. The Planning department will ensure that the machine and a technician are available at the right time, Logistics will bring the machine to the location and finally a Service technician will install the machine. After installation, the finance department will place the machine ”on contract”, billing starts and the machine is on record for service during the usage phase. What if one of these links fails? Exactly, then optimal performance is not delivered. This again justifies the question of why you would link KPIs primarily to your organizational chart. After all, organizational charts do not deliver performance, people and departments working together do. Linking to the organization chart encourages compartmentalization and one-sided decision-making, while cooperation in the customer chain determines success. It is precisely this point that drives our mission: to make organizations work better together, through the eyes of their customers.

We see the successes in practice. Translating the strategy through customer chains and linking KPIs to these customer chains creates cooperation. We are in it together. Who wants our coffee machines to be installed at customers’ premises on time? Everyone does! And all the links also have an impact on this. Let’s use that ”connection” to drive chain cooperation.

In the following blogs, we are going to take you through how to set KPIs for your organization, focusing on customer chains. We will explain the difference between customer chains and customer journeys and show how the result KPIs (see our previous blog on setting the right goals) are connected as the KPIs for the customer chains. We call this a KPI structure. After all, it’s all about consistency, not that one KPI. For each customer chain, two to three chain KPIs are determined. These chain KPIs match the expectations of customers and ourselves. They are a connecting factor for all links in the chain. In this way, cooperation occurs and you get chain KPIs that drive your result KPIs. Where goals tell you what success you want to achieve, customer chains and chain KPIs tell you how to achieve it. So don’t just steer on NPS or customer satisfaction, but on the KPIs that influence that.  

Organisations have different manifestations. Whether they are education, healthcare, municipalities, social workplaces or housing corporations, the same iPM principles apply there too. The customer in this case is the student, client, health insurer, citizen, employee or resident. For these organizations too, working together in the chain is a vital requirement for good performance. The beauty of the iPM method is that this need not stop within an organization’s legal boundaries. There are great examples where various organizations in the chain work together to achieve a joint result. That brings energy.

As customer chains are named within organisations, ownership also changes. Hierarchy becomes subordinate to the chain. Ostensibly, this is a simple sentence, but it results in quite a change. As an example, let’s go back to the beginning of this blog. In a compartmentalised organisation, several hands go up when asked who is responsible for installing coffee machines at customers’ premises on time and right the first time. In this organization, there is no ownership of the customer chain because it simply does not exist. And precisely that ownership is so essential in achieving the goals. Hence, ownership is an important issue as soon as organisations start working with customer chains. In the next blog, we will elaborate on this. 

The iPM implementation approach

We would like to take you along in the coming weeks with the questions and changes we encounter in practice during the implementation of iPM with our clients. Questions about the setup and organization of iPM, as well as the best implementation approach, will be addressed. The following topics will be covered:

Introduction of iPM

  1. From planning & control to iPM
  2. Ready for take-off
  3. Setting the right targets
  4. Which customer chains does my organization have
  5. Division of roles: hierarchy versus chain
  6. Tactics of the chain in focus
  7. Customer journey versus customer
  8. How to determine the right KPIs
  9. Getting your KPIs right in 10 days
  10. Consultation structure in iPM organization
  11. Effective performance dialogue and the usefulness of BRV
  12. Leader and team development
  13. Encouragement as a style to get more out of teams
  14. iPM in complex organizations
  15. Tips for implementation

Curious? Get in touch with us!

We outline what we often see in the traditionally controlled organization and indicate what that looks like when you apply iPM. Want to know more about healthy performance management? We illustrate this with situations and examples we encounter in daily practice. Contact us and we will help your organization move forward!

Back to the overview

Winning with the right KPIs

From strategy to execution: how key performance indicators can help your business.

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