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ACCA Strategic Professional · Advanced Performance Management · Non-financial performance measurement

Delmar Logistics uses the Kaplan and Norton balanced scorecard. Its board wants a measure that shows whether the company is retaining the customers it already serves. Under which scorecard perspective would customer retention rate normally be classified?

Customer retention rate belongs in the customer perspective of the balanced scorecard. That perspective captures how customers view the organisation, using measures such as satisfaction, market share, acquisition and retention, so retention is an outcome measured there rather than in the process, learning or financial perspectives.

  1. ACustomer perspectiveCorrect
  2. BInternal business process perspective
  3. CLearning and growth perspective
  4. DFinancial perspective

Explanation

The customer perspective asks how customers see the organisation and covers measures such as market share, satisfaction, retention and acquisition. Retention rate is therefore a customer measure. Placing it under internal processes confuses an outcome valued by customers with the operational activities that produce it.

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