Balanced scorecard is a framework for setting objectives for the business. Ideally, when the company meets these objectives, the company will be successful. To make this happen, the different objectives that the company sets within the balanced scorecard framework should be congruent. That is to say, the different objectives should make sense together (BSI, 2012).
There are four elements to the scorecard -- the shareholder value perspective, the customer value perspective, the process perspective, and the learning & growth perspective. For Berry's Bug Blasters, the shareholder value perspective is represented by financial objectives relating to profit and growth. To this end, Berry's Bug Blasters has developed a set of financial objectives. The company wants to achieve a revenue growth rate of 50% per year for the first ten years. With franchising and international expansion as part of the company's plans, this objective is reasonable. Profits should also grow at this rate, something that is reflected in the plan as well. In addition to financial measures that relate to shareholder wealth, the balanced scorecard demands that the path to this shareholder wealth increase are laid out. So for example, BBB has plans to add 10 new franchises per year, and will set revenue growth targets for all franchises so that the growth comes from a combination of opening new territories and maximizing...
Likewise, there are going to be targets for cost of goods sold (COGS) and the different expense categories, and these targets will help BBB achieve it profit targets. In addition, the number of people served is important, so that the company does not open new territories in underpopulated areas -- better to launch in Chicago than in Tumbleweed, South Dakota.
All the new franchises in the world will not help if the customers are not happy. Thus, it is important for the growth of existing business that customer needs are met. The company should rely on proprietary surveys of customers to help gauge whether or not customer satisfaction is being met. Beyond satisfaction, the business will benefit from word of mouth, not only for growth but also to reduce the cost of acquitting new customers. Thus, one customer service target other than satisfaction will be the number of referrals. These can be tracked by using a referral program that encourages existing customers to refer business back to the company. Lastly, a good measure of customer satisfaction is retention. Many of our customers will be one-time customers, but there are also many who are located in areas routinely plagued by random vermin. We want the repeat business from these customers. How much of this repeat business we get will be another measure that can help us to understand how well…
