This document provides a summary of a customer loyalty measure used in a balanced scorecard for a company. The measure tracks the percentage of surveyed customers who prefer the company's products over competitors and plan to purchase from the company again. High customer loyalty is expected to increase revenue growth by driving more frequent purchases and recommendations. The company aims to increase its customer loyalty rating from a baseline of 59% to targets of 65%, 68%, 72%, and 75% over the next four quarters.

1. Exhibit 5.9 Balanced Scorecard Measure Dictionary
Perspective: Customer Measure Number/Name: C01/Customer Loyalty Rating Owner: G. Garfinkel, VP Marketing
Strategy: Revenue growth Objective: Increase customer loyalty
Description: The customer loyalty rating measures the percentage of surveyed customers stating they prefer our products to competitor
offerings and will purchase our products again. Our research indicates that loyal customers make more frequent purchases and tend to
recommend our brands to others. Therefore, we believe increasing customer loyalty will help us achieve our strategy of revenue growth.
Lag/Lead: Lag Frequency: Quarterly Unit Type: Percentage Polarity: High values are good.
Formula: Number of quarterly survey respondents answering yes to survey questions #5: “Do you prefer our products compared to
competitor offerings?” and #6: “Will you purchase our products again?” divided by the total number of surveys received.
Data Source: Data for this measure are provided by our survey company, SST. Each quarter it performs a random survey of our
customers and provides the results electronically to our marketing department. Data are contained in MS Excel spreadsheets (MKT
SURVEY.xls, lines 14 and 15). Data are available the 10th business day following the end of each quarter.
Data Quality: High—received automatically from third-party vendor Data Collector: Sierra Burdette, Marketing Analyst
Baseline: Our most recent data received from SST indicates Target: Q1 2001: 65% Q2 2001: 68% Q3 2001: 72% Q4 2001: 75%
a customer loyalty percentage of 59%.
Target Rationale: Achieving customer loyalty is critical Initiatives:
to our revenue growth strategy. The quarterly increases
we’re targeting are higher than in past years but reflect
our increased focus on loyalty.
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1. Seasonal promotions
2. Customer relationship management project
3. Customer service training
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