You might have just a few performance measures on your contract, you might have dozens. Most likely they are mainly the KPIs the customer set for you when you won the contract. But are they measuring the things that REALLY count? Or are they just confirming you are being compliant with the customer’s basic operational needs?
Measuring the right things could make a real difference to your customer relationships. It could also help you win your rebid. These six steps will help you change your measurement regime to measure what really matters.
What really matters?
To build up a strong relationship with your customer during the contract, and to be able to show the difference you made when you get to the rebid, the measures that really count are those showing you have had an impact on things that are really important to the customer. Not just your operational customer, your customer at a strategic level. What difference have you made to their organisation’s success? Or how have you helped them deliver their own strategic plans and aims?
Your contract might feel a long way from those lofty heights. But you might be surprised how, by following the steps below, you can find, measure and report to your customer things you might already be doing. Things which have much more of an impact for them than the measures you have at the moment. Things which could make senior players in your customer more interested in your contract and more positive about how you are helping them. And of course when you get to the rebid, more inclined to want to keep you as the company delivering the contract.
Step 1: Review your existing performance measures
Take a look at your existing performance measures. What are they actually telling you and the customer? Are they mainly:
• Input based – showing the level of effort or resource you are putting into the contract, but not what this is producing?
• Output based – showing the things you are producing as a result of your effort?
• Outcome based – showing the impact of the work you are doing?
You might have a mix of measures – and some may be linked to others (for instance some inputs might lead to outputs). But if your measures are mainly input based then it’s unlikely you are being measured on anything other than basic compliance. Even if you have a number of output measures they might not be that relevant to the things the customer sees as strategically important
Step 2: Review your customer’s priorities
Go beyond your contract for this step. Start at the top. What are your customer organisation’s main strategic goals – what is it there to achieve? Look at their annual reports, their website or (if you have access to them) their aims and objectives. These are the things which keep the CEO and the customer Board awake at night. List these out. There might not seem to be any link with what your contract is doing yet, but these are the most important things the customer cares about.
Step 3: Map the strategies, programmes and actions the customer is pursuing
Just as with your own company, your customer will be pursuing a number of strategies, programmes and actions to achieve its goals and aims. These will probably have a number of levels. From top level strategies down to more local actions which contribute to implementing and achieving those strategies. They will drive each of the departments and divisions you are actually working with at some level. Even if your day to day activity doesn’t seem to relate directly to these higher level goals.
Step 4: Link your activities to the customer’s goals
Now you can start linking what you actually do on your contract to these more local goals. Ideally of course you might have seen a link with your customer’s top level strategies. But it’s more likely you will need to start locally. Map what you do on your contract against these local goals, where are the links? It might not be obvious and you may need to do some thinking and research. But eventually you should find something. Perhaps it is one of your existing measures, but don’t be restricted by these. It is quite possible you are not even measuring the activity in a way that relates it to these goals, and perhaps hadn’t even thought of the work you do as having a direct link to these activities.
The link may seem tenuous at the moment. But at least now you can work on finding a way to link your activities to the customer’s important goals. Look at the impact (or potential impact) your work has on different stakeholder groups. What about your customer’s staff, or your customer’s customers, what about different departments you may deal with but not report to?
Step 5: Find a way of measuring your work in a way which shows the impact you have
How might you be able to measure the impact you are having? You may need to look at a number of different ways to start with. A satisfaction survey perhaps? Talk to the stakeholders involved and see what they think are the relevant measures. If you can get them involved all the better – if you have found a link that fits with an important area for them they are more likely to be enthused and get involved. Test out the measures first, talk to your direct customer (they will often also be pleased to be able to show that their work has an impact).
Step 6: Focus, change and improve
Once you have your measure or measures in place you can start looking at what you can do to improve the performance levels you are achieving in this important area. You have now found something where your direct customer, and perhaps other departments, stakeholders or senior customer contacts will really want to see improved as they can see the impact on their own key goals. It also means they are more likely to work with you to find ways you can improve without impacting on your profitability (or more usefully impacting positively on it). And you may be in a position to start negotiating to replace less relevant performance measures with these new Key Performance Indicators and adapting your contract activities to fit.
Over the rest of the contract you can focus more on improving these areas. Not only will this improve your reputation and relationship with your customer during the contract, when you get to the rebid you will have some really positive data to show the customer not just how you have performed, but how you have helped them improve their performance.
See how we can help you review your contract processes and measurement to improve your customer relationships and retention rates here