Measuring customer service from the consumer's perspective is vital to improving business performance. Research by the Institute of Customer Service and Ashridge Business School revealed that businesses believe that understanding their organisation from a customer's viewpoint can significantly increase return on investment (ROI).

Their investigation found that 81 per cent of organisations thought that it is very likely to achieve positive ROI by gaining an understanding of service "from the customer viewpoint".

In addition, 74 per cent of organisations said that producing real businesses ROI can be achieved by taking the time to gather and act on customer feedback as this information is crucial to improving processes.

Joanna Causon, the Institute's CEO, said that it is the responsibility of human resources departments to alter the way in which return on investment for customer service is measured and reported

She said: "To position return on investment (ROI) in the boardroom, human resource departments must shift customer service away from measuring customer satisfaction and into much more complex areas, such as how customers perceive the value of their relationship with the company."

Organisations that want to improve customer service should use systems thinking to change processes within their businesses because it puts the consumer at the heart of each process.

"We are still measuring what is easy to measure. Stuff that's hardest to measure will become the stuff of greatest importance. Instead of measuring the attitude of staff, we need to measure the attitude and behaviours of staff 'as perceived' by customers. This is a whole new board game," added Ms Causon.

Systems thinking examines how a customer's view of an organisation is created by what happens at each point of transaction and how the customer's demand is met as well as how the organisation responds.

Using systems thinking can help add value to each process but this value must be defined in customer terms because the best businesses think of transactions in terms of how well the customer is able to achieve value from a process.

Many organisations do not possess the skills to fully understand how to analyse their own business from a customer's point of view and this can result in the creation of processes which do not offer much value.

The Institute of Customer Service estimates that poor levels of customer service costs the British economy £50 billion a year, which equates to an average of £248 in lost business from each UK citizen.

Author Martin Hofschroer writes for Himsworth Consultancy, a leading management consultancy firm of senior business and consultancy professionals that specialise in improving corporate and operational performance, delivering world-class customer service improvements and offering alternatives to business and functional outsourcing. Visit www.himsworthconsultancy.com/ for further details.