Module 12 Non-financial Performance Indicators

Question 1

Considerations as to what should be measured?

Answer 1

• Meaningful benchmarks
• Quantity of information
• Cost effective
• Quality of information
• Based on a controllable measure

Question 2

The Third Generation Balanced Scorecard

Answer 2

1. A destination or vision statement
2. A strategic linkage model
3. Definitions for each strategic objective
4. Definitions for how each objective will be measured

Question 3

Net Promoter Score

Answer 3

• tool which looks at a consumer’s loyalty to a brand
• score which will range from -100 to +100
• greater than 0 is good
• How likely is it that you would recommend our organisation/product/service to a friend

Question 4

transactional question

Answer 4

asked the question as soon as a transaction has been completed

Question 5

relationship question

Answer 5

you are asked the question at a specific point in time – for example quarterly or annually

Question 6

Net Promoter Score formula

Answer 6

• Promotor - 9 to 10
• Detractor - 1 to 6
• Passive - 7 or 8 (does not influence NPS)

Question 7

Disadvantages of NPS

Answer 7

• survey fatigue – if all businesses ask the same question, and you are asked this after every purchase or interaction with an organisation you may feel disinclined to answer the question
• businesses must be careful that the survey does not ask about an individual

Question 8

The Advocacy Index

Answer 8

• based on NPS
• telephone-based customer surveys

Question 9

Benchmarking

Answer 9

• comparing an organisation’s performance to that of other companies
• Two types
  
  • Strategic
  • Functional

Question 10

Strategic benchmarking

Answer 10

• performance measures which relate to the specific industry in which an organisation operates

Question 11

Functional benchmarking

Answer 11

• performance measures of support functions
• can be compared with t companies which do not operate in the same industry
• Information obtained from customers, trade or industry associations, investment analysts and consultants

Question 12

Customer Churn Rate

Answer 12

• customers pay on a recurring basis
• amazon prime or netflix
• assesses how likely customers are to repeat their payment or whether they will subscribe to a service once and not renew