A very brief introduction to a Customer Balance Sheet that looks at the measures required to monitor and manage the relationship between a firm and its customers.

1. An introduction to The Customer Balance Sheet
Drivers of Trust Drivers of Service
1. Market research as a business 7. The Drivers of Trust are taken
discipline has complained for years that wholesale from Concerto Marketing. The #1 Stability Loyalty, over time
it doesn’t get enough airtime at the top drivers of service are my own and based #2 Innovation Early adopter/# of products
table. One reason for this is that the on nothing more than experience,
language of research jars with the business knowledge and a gut feel. #3 Relationship Access/Engagement
language of the Top Table.
#4 Practical value Share of wallet
8. When you line up the six drivers of
2. Board meetings are dominated by reports trust and the six drivers of service you #5 Vision Feedback
and discussion on budgets, business get the balance sheet
performance, compliance and risk, #6 Competence Advocacy
operational controls and strategy. Everything 9. Taking a step back and looking at
is expressed in numbers or as a binary these 12 categories raises questions – 1 – Stability & Loyalty over time
yes/no status. By comparison Research is how many of them are you monitoring? If I provide a constant presence and certain delivery
seen as ambiguous, wordy, inconclusive. Some for sure, but not all. I bet. How over time, in return I am looking for your loyalty over
many are balanced? A fiver says none. time.
3. By adopting the language of the Board
Research should better fit with the 10. And a balance sheet suggests 2 – Innovation & Early adopter/# of products
expectations of executives. Creating a numbers so each of these 12 will have a If I innovate, in return I am looking for you to test and
Customer Balance Sheet could be a way number. Fair enough. And some statto buy these products
forward. will have fun normalising data to create
a single basis for comparison within and 3 – Relationship & Access/Engagement
4. The Customer Balance Sheet posits that across companies. The real point If I set up a relationship model to serve you, in return
the relationship between a firm and its however is to know what you want to you have to give me reasonable access to you to
customer base is just that – a relationship. track and get on with it. Refinement will conduct that relationship
As such there are roles and responsibilities come in due course, if it is seen as
on both sides that have to be in place to useful. 4 – Practical Value & Share of Wallet
make it work. If I deliver something that meets a need, in return I’d
11. And there you have it. A way of like you to spend money on it. How much money
5. In balance sheet terms, that which is presenting in one table the fundamental depends on how good I am at the other things on the
given by the customer to the firm is a non-Financial performance metrics for a list.
Liability i.e. something that can be taken firm allowing the Board to identify areas
away, and that which is given by the firm to for action. And before you throw your 5 – Vision & Feedback
the customer is an Asset i.e. something it hands up in horror at the apparent If I explain where I am taking this business and how
owns. oversimplification of everything that will benefit you, in return I want you to tell me
remember this could be worse, it could what you want, how its going and what could be
6. The customer balance sheet suggests be NPS. better. In a relationship, we need to talk.
that what a firm wants from its market is
‘trust’ and what customers want is ‘service’. 12. Can you improve this? Go on, have 6 – Competence & Advocacy
These can be argued about for ever, but lets a go. If I am good at what I do, in return I want you to tell
not. The point is to move on and see if this other people.
works. mikeyb.63@hotmail.com
© Michael Barnes 2010