When you run a business, it’s important to stay on top of that business’ performance. That way, you can tweak things if they need improving, or stick to processes that are successful if they’re working well. In order to get a concrete measure of how your business is doing, it’s important to understand KPIs—or Key Performance Indicators. By understanding KPIs and keeping track of them, you can keep yourself informed about your business’ performance and make sure you’re making the right decisions so that your organisation succeeds.
What Are KPIs?
KPIs are a series of measurements that you can look to to understand how your business is performing. KPIs can vary from department to department at an organization, and each can be used as a way to determine whether a department or individual is meeting specific goals.
Ultimately, KPIs are tools for better decision making at your business. If you look at a KPI and you’re meeting that number, there’s a good chance the things you are doing to meet than measurement are working. If your KPIs show that you’re underperforming, you can tweak the way that you are doing things so that you are better able to meet your intended goals.
Some examples of popular KPIs include:
- New Leads (per month)
- Sales (per month)
- Customer turnover rate
- Average purchase value
- Cost of a new lead (per each channel you use)
- Monthly website traffic
- Traffic from organic search results
How to Set KPIs
Setting KPIs for your business is essential to understand if you’re meeting the marks you intend to. To start, think about the goals you have for your business. Talk to department heads and ask them about their tangible goals. Then, look at how you’re doing now. Finally, compare the two, then set targets that resemble reachable goals. Measure whether you’ve met the goals over time, then readjust. While there’s no exact science to setting KPIs, keeping every stakeholder in the loop and part of the process—then readjusting as you go—can help ensure you’re making smart decisions for your business.
Holding Your Business Accountable to KPIs
At the end of the day, the main goal of KPIs is to keep your organization accountable—as well as every individual that works at your organization. Set numbers for departments and employees. Regularly measure whether those are being met. Have repercussions and make changes if they’re not being met. This will help ensure everyone works hard to meet their concrete goals and helps your business thrive.