Tag Archives: Useful

What are Effective Metrics for a Service Company? Seven Suggestions

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Situation: The CEO of a service company finds it challenging to measure project profitability and client satisfaction. What measures and metrics have other service companies found to be most useful? What are effective metrics for a service company?
Advice from the CEOs:
• For billable services one CEO measures utilization percent defined as (hours available for service delivery)÷(billable hours). Include in the denominator both billable hours and customer good-will or preventative maintenance hours. The latter, while not producing current income, are an investment in future income. Set up audits for service needs, especially future needs, when working with customers. This will help you to stay abreast of changes in the service environment and to plan accordingly.
• For fixed budget projects – another CEO measures budgeted vs. actual expenditures by project.
• For fixed-fee services a third CEO calculates a fraction expressed as: (income per customer company) ÷ (cost in hours for that customer).
• In a discussion on customer audits and surveys, options offered included: (1) An exit “pizza party” with the client. The challenge is that this may produce tainted results. While this builds customer good-will and may provide qualitative feedback, it should be supplemented by more objective measures. (2) A mailed survey – from a 3rd party with a prize for responding. (3) Email follow-up from a 3rd party that directs the customer to the 3rd party site to complete the survey.
• A final suggestion was ambassadorial CEO visits to the top contact person in key accounts. This provides an opportunity to learn about the customer’s present and future needs, staffing plans, business and strategic direction. Helps to anticipate changes in the competitive landscape. The more a business relies on recurring revenue, the more important these visits are.

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Can Social Marketing Leverage Your Competitive Position? Six Points

Situation: A company seeks to leverage the difference between information from traditional media and the richer information available through social media. Their objective, using publicly available information, is to identify individuals’ specific plans or preferences to better target their clients’ marketing dollars. Can social marketing leverage your competitive position?

Advice from the CEOs:

  • The principal value proposition is the ability to mine publicly available information from consumers through social media and make it useful to advertisers who want to reach those customers.
  • If the company’s technology allows access to shared data which can be used by many companies this is less expensive than clients’ trying to go it alone.
  • The most important differentiation will be the timeliness of data. Many firms collect data after the fact – for example after a key purchase is made. What advertisers desire is the ability to anticipate purchases. An example is a consumer’s plan to buy a house. This information is valuable to many companies. If data is mineable, it is valuable.
  • The essential question is how the client will make more money from data being near-real time. If the client can use the company’s data to enhance their marketing database, this adds value.
  • Consider partnering with the agencies that B2B and B2C companies hire to advertise their products. Even the largest consumer B2B and B2C companies work with outside ad agencies because these companies have better access to targeted customer lists than the companies.
  • Consider a subscription model, offering access to unique, current data to many customers. The differentiating value is the currency and timeliness of the data. A subscription model generates an ongoing revenue stream.

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