Are Performance Predictors Relevant in All Industries?

When I was originally exploring the concept of performance predictors, I prematurely concluded that performance predictors were only relevant to pure service businesses, such as engineers, accountants and advertising agencies. However, I was wrong.

Let's investigate five broad categories of business types, and consider relevant performance predictors for each in turn.

1. Pure products: are defined as tangible objects with no intangible service component. Examples include salt and razors.

Relevant performance predictors may include:

• 'Before and after' demonstrations
• Prices
• Celebrity endorsements
• Consumer confidence programs (for example, the Heart Foundation Tick of Approval)
• Product trials
• Packaging
• Size of R&D budget
• Testimonials
• Guarantees

2. Pure products + service component: are defined as tangible objects as the core offering with an add-on service component. Examples include new homes and cars.

Relevant performance predictors may include:

• Market position rankings
• Prices
• Product trials
• Marketing collateral
• Industry awards
• Testimonials
• Guarantees
• Critics reviews
• Photographs

3. Hybrids: are defined as offerings with an almost equal composition of product and service components. Examples include restaurants and hair cuts.

Relevant performance predictors may include:

• Prices
• Location & fit-out
• Visual branding
• Marketing collateral
• Industry awards
• Testimonials
• Professional memberships
• Critics reviews
• Signage

4. Pure service + product component: are defined as intangible experiences as the core offering with an add-on product component. Examples include air travel and theatre.

Relevant performance predictors may include:

• Prices
• Celebrity endorsements
• Visual branding
• Marketing collateral
• Website quality
• Industry awards
• Testimonials
• Years in operation
• Signage
• Photographs

5. Pure services: are defined as intangible experiences with no tangible product component. Examples include engineering and teaching.

Relevant performance predictors may include:

• Market position rankings
• Prices
• Celebrity endorsements
• Location
• Qualifications of personnel
• Marketing collateral
• Website quality
• Industry awards
• Testimonials
• Professional memberships
• Years in operation
• Guarantees
• Client success statistics

I have only applied common performance predictors to the above categories. There is scope to be more creative and tailor performance predictors to a specific business based on what is known about its clients.