Balanced Scorecard Customer Perspective in Small Businesses
This paper examines the customer perspective of the Balanced Scorecard (BSC), a strategic management framework developed by Robert Kaplan and David Norton. Using three small to mid-sized firms — Hyde Park Electronics, Futura Industries, and Southern Gardens Citrus — the paper demonstrates how BSC customer-focused metrics such as satisfaction surveys, on-time delivery rates, warranty returns, and shipment specifications translate strategic goals into measurable outcomes. The analysis also explores the concept of customer-centricity and the Customer Value Proposition as central to a successful BSC implementation beyond large corporations.
- Introduction to the Balanced Scorecard: BSC origins, four perspectives, and firm scope
- The Customer Perspective Defined: Core questions driving the customer perspective
- BSC Customer Metrics Across Three Firms: Hyde Park, Futura, and SGC customer metrics
- Customer-Centric Strategy and the Value Proposition: Customer-centricity and value proposition concepts
- Analysis and Conclusion: Synthesis of BSC customer perspective findings
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What makes this paper effective
- Uses three concrete company case studies to ground abstract BSC theory in real-world application, making the argument tangible and comparative.
- Moves logically from framework definition to perspective-level analysis to company-specific metrics, building reader comprehension progressively.
- Incorporates quantitative targets (e.g., 90% on-time delivery, 99.86% shipment specification) to illustrate how qualitative strategic goals become measurable KPIs.
Key academic technique demonstrated
The paper demonstrates applied comparative analysis: it takes a single BSC lens — the customer perspective — and systematically applies it across three distinct firms, revealing both the universality of the framework and the firm-specific adaptations each organization made. This technique shows how theoretical constructs translate differently depending on industry context and company size.
Structure breakdown
The paper opens by introducing the BSC and its four perspectives, then narrows focus to the customer perspective. It walks through each of the three firms in turn, detailing their specific customer metrics and outcomes. The final section introduces the "customer centric" concept and the Customer Value Proposition as the analytical framework tying the case studies together. The paper is concise and application-focused, suitable as an undergraduate business analysis.
Introduction to the Balanced Scorecard
The Balanced Scorecard (BSC), developed by Robert Kaplan and David Norton, is "one of the most highly touted management tools today" (Gumbus & Lussier, 2006) and is used extensively by Fortune 1000 companies to "set strategy and align operations to achieve breakthrough results" (Gumbus & Lussier, 2006). Is the Balanced Scorecard a tool only for the multinational or conglomerate firm? Increasingly, the answer is no. Small to mid-sized firms are embracing the BSC as an effective "strategic planning and measurement system" (Balanced Scorecard Institute) that allows for organic growth, greater profitability, "innovation, and outstanding customer service" (Niven, N.D.).
An analysis of three firms — Hyde Park Electronics, Futura Industries, and Southern Gardens Citrus — demonstrates the positive impact of the BSC for small to mid-sized entities.
The Balanced Scorecard was designed with the understanding that "financial measures alone were not sufficient to measure performance" (Gumbus & Lussier, 2006). Kaplan and Norton devised a framework utilizing four perspectives: financial, customer, internal process, and learning and growth. In analyzing these three firms, the focus is on the customer perspective and its application to a successful BSC implementation.
The Customer Perspective Defined
The customer perspective originates from the question of "how must we be viewed in the eyes of our consumers?" (Gumbus & Lussier, 2006). Breaking that proposition down further, companies must determine who their customers are, what those customers expect, and what value is provided to them (Niven, N.D.).
BSC Customer Metrics Across Three Firms
For Hyde Park Electronics, "the management team felt that measures of customer satisfaction are increased sales and increased income that would result from product acceptance and the generation of repeat customers" (Gumbus & Lussier, 2006). Revenue and income metrics tied in well with the financial perspective "because the company was strong in this area and had a great number of controls in place" (Gumbus & Lussier, 2006). In addition, Hyde's management team looked to product shipment dates and warranty returns as crucial customer satisfaction metrics. These indicators are directly tied to Hyde's profit-sharing plan: "operating profit target 15%; cumulative warranty return 1.7%; and delivery on time target 90%" (Gumbus & Lussier, 2006).
Futura Industries' customer perspective flows from the "basic question, how do you give good customer service?" (Gumbus & Lussier, 2006). The answer was four metrics: customer satisfaction, customer hassle index, on-time delivery, and lead times (Gumbus & Lussier, 2006). The measurement system utilizes a customer satisfaction survey that asks respondents a series of questions on quality, delivery, and value of Futura's product. Futura scored 8.92 out of 10 on their survey (Gumbus & Lussier, 2006).
The BSC at Southern Gardens Citrus applies the customer perspective to percent of shipments within specification, loading cycle time, and customer service. On shipment specification, the percentage reached 99.86% in 2002, up from a low of 70% in 1995. The results of the customer perspective metrics and the BSC overall catapulted Southern Gardens Citrus to recognition as a Balanced Scorecard Collaborative Hall of Fame company (Gumbus & Lussier, 2006).
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