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Mariam 5 - Azzouz2020
Mariam 5 - Azzouz2020
Mariam 5 - Azzouz2020
ABSTRACT
In a mature and globalized economy, competition is putting margins
of companies to the test, and customers are becoming increasingly
expensive to conquer and keep. The easiest way to grow is to acquire
more customers and retain them by offering them the highest possible 1. INTRODUCTION
level of satisfaction. Companies are then, forced to establish Nowadays, the current economic context is highly changing and
customer-centric strategies. In this paper, we are interested to the companies are facing sharp competition and saturated markets. This
company performance through its customers (also called commercial situation leads decision-makers to gradually, consider operational
performance). We propose a generic method for commercial criteria other than direct productivity in order to evaluate effectively,
performance evaluation; directed by the decision-makers needs and their company's performance. Being competitive is no longer just
focused on three main axes relative to the customer perspective: about offering customers, products with competitive prices. It is also
customer’s attraction, satisfaction and loyalty. These axes are about offering them, services that meet their quality, safety and time
defined by specific indicators, and are linked to increased revenue of requirements.
the company and/or its market share. The evaluation of these The performance of any company has both an endogenous and an
indicators allows the estimation of the good (or bad) financial health exogenous component. Endogenous or internal performance
of the company. We implemented the proposed method in a essentially concerns the efficiency of the resources used and is
performance evaluation tool and applied it on the case study of a controlled by the company through the mechanism of objectives to
"Mobile Operator". be achieved.
The exogenous or external performance is declined through, the
CCS CONCEPTS judgment of the customer regarding the product / service that he
• Information Systems → Tracking; Information Systems → receives (according to the time of taking order, the quality of the
Data Management Systems; Information Systems → product, etc.) and the judgment of the upstream supplier (according
Information Systems Applications to the number of returns, the speed at which the invoices are paid, ...)
[1].
The performing company is not only the one that realizes its turnover
Keywords
and generates profits. It must satisfy its customers, in a long-term
Performance, Commercial Performance, Customer-centric Business relationship. The single-criteria model of performance focused on
Strategy, Performance Indicator System (PIS), Business Intelligence reducing costs is then, replaced by a multi-criteria and global vision
(BI), Attraction, Satisfaction, Loyalty. of performance. This latter is perceived as « the aggregation of
economic, financial, social and environmental performance»; it is a
Permission to make digital or hard copies of all or part of this work for
multidimensional concept that is difficult to measure technically [2].
personal or classroom use is granted without fee provided that copies are In this article, we focus on commercial performance (also called
not made or distributed for profit or commercial advantage and that copies marketing performance) which is a specific axis of economic
bear this notice and the full citation on the first page. Copyrights for performance. Commercial performance is particularly, attached to
components of this work owned by others than ACM must be honored.
the customers‟ satisfaction. It seems difficult to clearly separate
Abstracting with credit is permitted. To copy otherwise, or republish, to
post on servers or to redistribute to lists, requires prior specific permission commercial performance from the others types of performance; the
and/or a fee. Request permissions from Permissions@acm.org. reason is that these different types of performance fit into the core of
ICIST’2020 4-5 June 2020, Lecce, Italy. Copyright 2020 ACM any business enterprise, focused on customer satisfaction [3].
ACM ISBN 978-1-4503-7655-6/20/06…$15.00 Multiple researches on company performance such as [4; 5; 6; 7] take
https://doi.org/10.1145/3447568.3448523 into account the different stakeholders of the company (employees,
customers, community, suppliers, etc...) and their role in the
performance of the company. Recent researches [8; 9; 10] in the field
of performance is increasingly interested in the role of customer as a
stakeholder in the company and his impact on its performance,
specifically on commercial performance.
Several models and/or methods such as those described in [11; 12; 4; degree of its achievement, decision variables attached to it and the
13; 14; 15; 16; 17; 18] have been proposed for evaluating companies existence of actors using it.
performance, through different aspects and criteria. These According to [21], "A performance indicator is a quantified relevant
approaches differ from each other, in the type of performance, the variable for decision-making and management ".
tools used, performance measurement/evaluation The performance indicator consists of the triplet (see Fig. 1): an
aspects, the evolution of the performance model or the prediction of objective “O”, a measure of effectiveness “M” and an essential
performance; this is well detailed in Section 6 of the paper. variable “V” (action variable)[22].
The objective of this paper is to define a generic approach for design,
implementation and exploitation of a customer-centric PIS
(Performance Indicator System). The proposed approach could help
to define and evaluate commercial performance according to three
main aspects: attraction, satisfaction and loyalty of customers.
Our method consists of several steps. It starts by analyzing the
decision–makers requirements and focuses on the definition of a
performance indicator system (PIS). This latter contains several steps Figure 1: Triplet « Objective, Action variable, Measure ».
and is defined around three essential axes that are the attraction, the The objective represents the desired state, the measure represents the
satisfaction and the loyalty of the customers; each of them is defined real state and the action variables are the levers on which decision-
by a set of performance indicators. These axes are linked to increased makers can act to improve the gap between the objective and the
revenue of the company and make it possible to determine the good measure.
(or bad) financial health of the company. For the objective, we use the «SMART» definition [23] which states
For the implementation of our approach, we consider the commercial that an objective has the following characteristics: Specific,
activity of a “Mobile Phone Operator” for which we define the Measurable, Acceptable, Realizable and Temporarily defined.
appropriate performance indicators related to the three axes The measure represents the third parameter of the performance
previously identified (attraction, satisfaction, loyalty of subscribers). indicator. The acquisition of this measure represents the first step in
We illustrate the proposed method by the development of a tool that the process of expressing performance. Voyer P. defines the measure
allows a decision-maker to set his objectives (setting step), measure as "significant information: definition, index or indication, status,
the different indicators by making a projection on one of the three classification and categorization relative to a characteristic, or an
analysis axes, evaluate the performance on each axis by examining illustration" [24].
the differences between the objectives set and the measured values.
The rest of the paper is structured as follows: Section 2 sets out the
2.3 Performance Indicator System “PIS”
context of the work and the main concepts related to it. Section 3 A performance Indicator System (PIS) can be defined as "A tool that
presents our approach (the generic method) for commercial provides a comprehensive framework for expressing performance; it
performance evaluation of a company through its clients. Section 4 brings together a set of indicators and provides decision support"
describes the case study of “Mobile telephony operator”. Section 5 [18].
presents some technical aspects of our approach. Section 6 presents A PIS is a multi-step process; in [16], the author proposes to break
some related works and situates our approach among the others down a PIS into seven steps representing its lifecycle as shown on
proposed in the literature. The conclusion is presented in Section 7; Fig. 2.
it summarizes our current thinking and outlines the perspectives
envisaged.
2. DEFINITIONS AND MAIN CONCEPTS
In this section, we set out the main definitions of basic concepts:
performance, performance indicator (PI), performance indicator Figure 2: Lifecycle of a PIS.
system (PIS) and performance evaluation.
The seven steps of PIS are: (i) determine the perimeter of the PIS that
2.1 The concept of performance may be the whole business or a process (or function) that constitutes
Several definitions of company performance were proposed. In [19], its external environment. (2i) The definition of its objectives which
we find the following definition: "Performance is reflected through constitute the mission of the PIS. (3i) The definition of its
the company's ability to produce and control its costs". requirements, the means which must contribute to its proper
This definition focuses more on the financial aspect of the company; functioning. (4i) The design of the PIS that describes all performance
a more complete definition that considers the financial, indicators. (5i) The implementation of the PIS, which is the physical
Commercial and environmental aspects is given in [20], realization of PIS and its integration into the company’s information
"Performance is the company's ability to generate profits and benefits system. (6i) The operation of the PIS for measurement, evaluation
for its various stakeholders, by offering products or services that can and decision-making. (7i) The revision of the PIS for corrective or
satisfy customers". evolutive actions.
2.2 Performance indicator (PI) As part of our approach, the scope or perimeter of our PIS is the
The concept of a performance indicator is attached to the objective commercial activity of the company, the life cycle of our PIS starts
term, which is the fundamental element of performance reflecting the with the definition of objectives and then the design of PIS (definition
of indicators for each axis of commercial performance).
Subsequently, the implementation and integration of the PIS into the Currently, customer satisfaction is at the heart of the company's
company’s information system. Finally, the operation of the PIS: strategy; hence its interest in companies in terms of sustainability and
setting the indicators by giving the desired values of indicators, competitiveness. The customer is a major source of income that
measurement of indicators and evaluation of performance. obliges the company to maintain and satisfy it. Satisfied customers
2.4 Performance evaluation favor the recruitment of new customers through the positive "word of
mouth" technique [28].
Performance evaluation is essentially, based on methods and tools
measurement. Measurement provides a list of indicators values,
3.1.3 Customer loyalty
while evaluation consists of making decisions to achieve the For companies, the cost of recruiting new customers is enormous:
objectives based on measured indicators. There is a strong link advertising, discounts, promotions, demonstrations, trial costs, sales
between measurement and performance evaluation. Indeed, expenses, etc. The only solution is to plant the loyalty effect among
performance evaluation consists in comparing the gap between the customers to compensate these investments, so the term customer
measure and the objective. loyalty was born. A loyal customer is defined as: "a customer who
wants to keep the same supplier regardless of the competition's
proposals, sometimes in an irrational way" [29].
3. OUR APPROACH FOR COMMERCIAL The loyalty process generally consists of three steps: data collection,
PERFORMANCE data analysis and implementation of loyalty programs. Customers’
Commercial performance is obviously customer-centered. loyalty ensures the company's sustainability by establishing a long-
Customers must be at the heart of commercial strategies aimed at term relationship with customers, and increases profits by improving
achieving good commercial performance which is defined as: "The purchasing behavior and repetitive purchasing actions. Loyalty has
ability of the company to satisfy its customers by offering quality an impact on the company's innovation by perfecting its R&D
products and services that meet the expectations of consumers." [25]. (research and development) policy. Loyalty optimizes the
Companies are using different strategies to create a good relationship effectiveness of commercial and advertising investments through
with their customers, as it is not just about selling them products, but "word of mouth" (better reputation).
creating a sense of commitment to the company brand. Thus, we The following table (Table 1) provides an overview of the main
believe that the customer-centered commercial strategy follows the performance indicators related to the three axes: attraction,
chain of three main objectives: attraction, satisfaction and loyalty of satisfaction and loyalty.
customers. These objectives are the three axes we consider for Table 1. Benchmarks of indicators for the three axes (attraction,
measuring and evaluating commercial performance (see Fig. 3). satisfaction, loyalty)
Performance Indicators Description
Axis
Effectiveness Measures the effectiveness
of of an advertising campaign,
Attraction prospecting for example
axis Transformation Rate Measures sales
Figure 3: Commercial performance axes. effectiveness of an
3.1 The three axes of commercial performance advertising campaign, for
example
3.1.1 Customer attraction
Conquest rate Measures commercial
Prospecting or attracting new customers is at the heart of companies'
success
concerns, prospecting customers is a difficult task in the face of
intense competition and the rapid evolution of technology, companies cost of Measure the cost of
moved from traditional marketing to digital marketing. The acquiring a new acquiring a new client
client
acquisition of new customers requires an approach based on a market
study and customer expectations. So, customer attraction is defined Level of Brand recommendation
by a set of methods and tools dedicated to marketing such as: satisfaction with rate
Satisfaction the brand
advertising, trial period, communication... etc., in order to attract the
most customers [26]. axis Total satisfaction Are you satisfied?
Attracting customers has an impact on the growth rate resulting from The courtesy of Were you welcomed
profits increase. Winning new customers reflects the company's state employees well?
of health. Claims Measures customer’s
3.1.2 Customer Satisfaction dissatisfaction with a
Acquiring new customers is only the first step in the process, service or offer.
companies must satisfy their customers by playing on several factors: Processing rate Measures the ability of
attractive prices, variety of offers, quality of product/service, staff to process claims.
listening...etc. For a company, satisfaction is the agreement of the Customer churn Measures the lost of
products or services offered by the company to the needs and customers
expectations of the customers [27].
Recency, The RFM method [30] is Figure 4: Process for design, implementation and exploitation of
frequency, the best known of the the PIS.
Loyalty
axis amount of scoring segmentation
purchase “RFM” methods. It is mainly, used Step 1: Analysis of the business activity
in distance sales This step consists of analyzing the context of commercial activity,
companies. defining the missions of the company to his customers, the processes
Customer lifetime Difference between the of commercial activity (purchasing, sales and marketing), analyzing
accession date and the existing indicators and business intelligence system.
rupture date Step 2: Identification of objectives
Segmentation by Distinguish customer The development of clear and realistic business objectives is one of
value types according to the the prerequisites for a company‟s commercial success. The
revenue value principle. formulation of the business objectives takes into account the three
Customer Classify clients according performance axes (attraction, satisfaction and loyalty). The quality of
Segmentati to criteria such as age PIS depends on the objectives set.
on groups, gender type… etc. Step 3: PIS Model Design
3.2 Process for defining and implementing the This step consists of defining a PIS model based on the objectives
defined in Step 2. The PIS model is designed around the three axes.
PIS Each analysis axis has a set of indicators.
In this section, we describe the process we propose for defining and Step 4: PIS implementation
implementing the PIS for commercial performance evaluation. This This is the step of projecting the company's commercial activity data
process consists of six main steps: (i) Analysis of commercial onto the PIS (each indicator is calculated from a data set). If we
activity, (2i) Identification of objectives, (3i) Design of the PIS, (4i) consider a BI, it is the process of extraction, processing and loading
Implementation of the PIS, (5i) Performance measurement and (6i) data. The implementation of the PIS has another functionality,
Performance evaluation. namely "Setting" that consists in setting the desired values of the
indicators by the decision-maker.
Step 5: Performance measurement
In this step, a value will be calculated for each indicator defined using
data collected from the commercial activity.
Step 6: Performance evaluation
For each indicator, the gap (difference) between the actual
measurement (using the real data recorded in the database) and the
estimated value (the objective set by the decision-maker) is
calculated to evaluate commercial performance. At the end, the
decision-maker makes an eventual decision to reduce the gap as
much as possible.