Introtokpis
Introtokpis
Introtokpis
Table of Contents
Lesson 1 .............................................p.3
Introduction to KPIs
Lesson
KPI 101 |
2 .............................................p.11
How do define your organization’s KPIs
2
Lesson
3 .............................................p.17
Best practices for picking the right
KPIs for your business
Lesson
4 .............................................p.25
The most important KPIs
Introduction to KPIs
In today’s ultra
KPI 101 |
4
competitive business
ecosystem, only the
strong survive. In order
to keep your team on top
of their game, you need
to cultivate a data-driven
culture by sharing the
right performance
indicators and business
metrics with your team.
A Key Performance
Indicator is a measurable
value that demonstrates
how effectively a company
is achieving key business
objectives.
Introduction to Key
Performance Indicators
Organizations use KPIs at
multiple levels to evaluate their
KPI 101 |
between trial-to-customer
becomes significantly shorter
when you reach a certain
Net Promoter Score. Seeing
this correlation may allow you
to forecast: increased
customer success =
decreased time between
trial-to-customer.
Depending on what
organizational objectives
you’ve decided on, building
a KPI around this forecast
may be worth your time.
Common KPI mistakes
Even elite organizations struggle to avoid
these mistakes. They can occur at various
points of a company’s develop- ment—
including when new team leaders are
hired, when new objectives are
established, and/or when old KPIs are
KPI 101 |
rapid change.
The most common KPI mistakes are:
• Reliance on intuition. This
can arise from the
overconfidence effect.
• Blindly adopting commonly-held From there, you’ll need to regularly
best practices rather than
creating your own. assess your objectives, KPIs and
activities. They are all likely to change
• Bias toward the most recent
information learned. as you gather new insights into the
market and/or your product, which
• Confusing lagging indicators (the
easy-to-measure out- put) with means assessments can and should
leading indicators (the difficult-to- be done both at the company and
measure input). departmental levels.
Once you’ve defined your
Measuring and monitoring business
organization’s KPIs, you’ll then be
performance is criti- cal, but
tasked with the responsibility of
focusing on the wrong metrics can be
determining which activities (and
detrimental.
all departments must be included
on this) will best drive towards
those KPIs.
Best practices for picking the right KPIs
for your business
Data and metrics are everywhere. Measuring and moni-
toring business performance is critical, but focusing on
the wrong metrics can be detrimental (as time and
money are spent measuring, monitoring and trying to
optimize metrics that don’t matter much). The same can
be said about poorly structured KPIs and KPIs that are
KPI 101 |
regular basis.
Sales Growth
Sales Growth metric measures the pace at which your or- ganization’s sales revenue
is increasing or decreasing. This is a key metric for any organization to monitor since
it’s an essential part of growth projections and is instrumental in strategic decision-
making. Monitor this metric over multiple time periods to gain a clear indication of
growth trends and normalize your values. This will help you account for month- ly
or quarterly spikes in revenue.
KPI 101 |
28
Purchase Funnel
The Purchase Funnel KPI analyzes your customer acquisition process to help you understand how
potential customers discover your product or brand and, more importantly, how they eventually
become a loyal customer. This KPI is typically broken down into five stages: awareness, interest,
consider- ation, preference, and purchase. From a measurement point of view, this may map to a
variety of sales and marketing channels from social media and web visits to mailing lists and sales
contacts. The strength of the funnel is the ability to zero in on your strengths and weakness.
KPI 101 |
29
Product Performance The Product Performance KPI ranks product sales based
on revenue performance to inform your sales team
which prod- ucts are selling well. At the same time, you
should rank the poorest performing products to
determine which products are failing to resonate with
your customers.
Sales Targets
The Sales Target KPI measures current sales (either dollar value or number of
wins) and compares that value to a target or past performance. The key to
this KPI is setting an appro- priate sales target. This requires a deft touch, as
a goal that is set too high will be viewed as unachievable and will drain
morale; on the other hand, a goal that is set too low will fail to motivate your
team to go that extra mile. One of the most common ways to develop this
KPI is to compare current per- formance to the previous period, for example,
showing new wins this month compared to wins last month.
KPI 101 |
31
Marketing ROI
The Return on Marketing Investment KPI measures how much revenue a marketing
campaign is generating com- pared to the cost of running that campaign. Effective
marketers are driven to connect their time, energy and advertising spend with
results that contribute to company growth. This KPI answers the question, are we
recouping the time and money we spent developing and executing our marketing
campaigns?
KPI 101 |
32
Monthly Sales
Performance Davshboard
Executive Reporting
Dashboard
Support Tickets
Dashboard
KPI 101 |
36
Thank You