The Balanced Scorecard: Translating Strategy Into Action by Robert S. Kaplan, David P. Norton Page A

They wanted the basic product, delivered reliably and on-time, with no defects, and at the lowest possible price. Its Tier 1 customers, on the other hand, were willing to pay a price premium for particular features or services that they perceived as highly valuable for achieving their competitive strategic vision. Similarly, Metro Bank identified several market segments in its customer base. One segment just sought the lowest-priced supplier of standard banking products like checking accounts. Another segment, however, looked to the bank as a one-stop source of financial products and services, and were willing to pay a reasonable, but not necessarily the lowest, price for conducting financial transactions. Both segments, however, wanted high-quality service (zero defects) in transactions with the bank.
C USTOMER R ELATIONSHIP
    The customer relationship dimension includes the delivery of the product/service to the customer, including the response and delivery time dimension, and how the customer feels about purchasing from the company. For example, Metro Bank identified for its customer relationship objective that it should build and maintain high expectations about how the bank treated its customers. Metro defined three key elements of an excellent relationship with its customers.
    Figure 4-3
The Customer Value Proposition
    Knowledgeable People: Differentiate ourselves through employees capable of recognizing customer needs and possessing the knowledge to proactively satisfy them.
Convenient Access: Give customers access to banking services or information 24 hours a day.

Responsive: Service customers expediently. The timeliness of the response should meet or exceed the customer’s perceived sense of urgency.
A retail chain like Nordstrom emphasizes the extraordinary level of service its salespersons are prepared to give its targeted and valued customers. The success of Intuit, a relatively small software company that dominates its market segment of personal-computer-based financial-management software, can be attributed to users’ passionate approval of the transparency and ease of use of its products. The relationship dimension also encompasses long-term commitments, such as when the supplying company links its information systems with customers’—electronic data interchange—to facilitate a broad range of activities across the selling/buying relationship: shared designs of products, linked production schedules, and electronic ordering, invoicing, and payment. The relationship could encompass qualification as a preferred supplier so that incoming items are delivered directly to workstations on the factory floor, bypassing receiving, inspection, handling, and storage. Some companies have even turned over their purchasing function to qualified suppliers, providing supplier representatives with office space and storage facilities on-site, and allowing the supplier to manage completely the flow of materials to arrive in the exact mix and quantity just-in-time to workstations. Such relationships are another dimension of choosing suppliers on a basis other than the one that quotes the lowest unit price.
I MAGE AND R EPUTATION
    The image and reputation dimension reflects the intangible factors that attract a customer to a company. Some companies are able, through advertising and delivered quality of product and service, to generate customer loyalty well beyond the tangible aspects of the product and service. Consumer preferences for certain brands of athletic shoes, designer clothing, theme parks (“I’m going to Disneyworld”), cigarettes (“The Marlboro Man”), soft drinks (“the Pepsi generation”), and even chickens (Perdue) connote the power of image and reputation for targeted consumer segments. Metro Bank was attempting to build a reputation as a knowledgeable, friendly financial adviser capable of supplying a full line of banking products and services. Pioneer Petroleum, trying to differentiate its product in