How do you measure the impact of lead time reduction on customer satisfaction?

1 Customer expectations

One of the first steps to measure the impact of lead time reduction on customer satisfaction is to understand your customers' expectations. What are their priorities, preferences, and pain points when it comes to lead time? How do they perceive your current lead time performance compared to your competitors and industry standards? You can use surveys, interviews, feedback forms, and online reviews to collect data on your customers' expectations and satisfaction levels.

3 Lead time variability

Lead time variability (LTV) is another metric to measure how stable and predictable your lead time performance is. It is the standard deviation of the actual lead times from the average lead time. A low LTV indicates that you have a smooth and efficient production process that minimizes disruptions, delays, and errors. A high LTV indicates that you have a lot of variation and uncertainty in your production process that can affect your OTD and customer satisfaction. You can calculate LTV by using a statistical formula or a software tool.

4 Customer retention

Customer retention is a measure of how loyal your customers are and how likely they are to repeat purchases from you. It is the percentage of customers who continue to buy from you over a given period. A high customer retention indicates that you have a strong customer relationship and that your customers are satisfied with your products and services. A low customer retention indicates that you have a weak customer relationship and that your customers are dissatisfied or switching to other suppliers. You can calculate customer retention by dividing the number of customers who bought from you at the end of a period by the number of customers who bought from you at the beginning of the period.

5 Customer lifetime value

Customer lifetime value (CLV) is a measure of how much profit you can generate from a customer over their entire relationship with you. It is the present value of the future cash flows from a customer minus the cost of acquiring and serving them. A high CLV indicates that you have a profitable and long-term customer relationship and that your customers are loyal, satisfied, and willing to pay more for your products and services. A low CLV indicates that you have an unprofitable and short-term customer relationship and that your customers are price-sensitive, dissatisfied, and likely to churn. You can calculate CLV by using a formula or a software tool.

6 Customer feedback

Customer feedback is a qualitative method to measure the impact of lead time reduction on customer satisfaction. It is the information and opinions that your customers share with you about their experiences and perceptions of your products and services. You can use customer feedback to understand how your customers feel about your lead time performance, how it affects their satisfaction and loyalty, and what improvements or suggestions they have for you. You can collect customer feedback through various channels, such as surveys, interviews, feedback forms, online reviews, social media, and referrals.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?