KPI’s

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 |

success at reaching targets. High-

6

level KPIs may focus on the

overall performance of the
enterprise, while low-level KPIs
may focus on processes in
departments such as sales,
marketing or a call center.
Types of KPIs
Depending on your industry and
the specific department you are
interested in tracking, there are a
number of KPI types your
business will want to monitor.
Each department will want to
measure success based on
specific goals and targets.
 What makes a KPI effective?
A KPI is only as valuable as the
action it inspires. Too often,
KPI 101 |

organizations blindly adopt

7

industry-recognized KPIs and

then wonder why that KPI
doesn’t reflect their own busi-
ness and fails to affect any
positive change.

One of the most important, but

often overlooked, aspects of
KPIs is that they are a form of
communication. As such, they
abide by the same rules and
best-practices as any oth- er
form of communication. Succinct,
clear and relevant in- formation
is much more likely to be
absorbed and acted upon.
 Being SMART about your
KPIs
One way to evaluate the
KPI 101 |

relevance of a KPI is to use

8

the smart criteria. The

letters are typically taken to
stand for specific,
measurable, attainable,
relevant, time-bound.
In other words:
• Is your objective Specific?
• Can you Measure progress
towards that goal?
• Is the goal realistically
Attainable?
• How Relevant is the goal to
your organization?
• What is the Time-frame for
achieving this goal?
 KPI Example 1
If you work in the highway
division of a transportation
authority, a key performance
indicator could be to track
KPI 101 |

the average driver’s speed

9

from July to November, as

many accidents happened
during this time the previous
year.

In this case, it would be

helpful to know that from July
to November the average
driver cruises at 60 km/h—
which is 10 km/h higher than
the posted speed limit of 50
km/h,
and 6 km/h higher than they
typically drive during all other
months.
 KPI Example 2
Let’s say you are the owner of
a local pub. In establishing
KPI 101 |
10

average pints per patron per

visit (ppv) as a key
performance indicator, you
may notice that last month
you averaged 1.1 ppv
(compared to the local pub
average of 1.4 ppv and last
month’s average of 1.3 ppv).

In this sense, establishing

measures, metrics and KPIs
can help open the door to
questions about your
business performance that
you may have missed
otherwise.
 How to define your organization’s
KPIs
It’s a question asked by leaders at
maturing startups and at established
companies alike: How do we define
our organiza- tion’s KPIs?

Defining your organization’s key

KPI 101 |

performance indicators ultimately

12

comes down to a two-step process:

1.Determine your organization’s
most important objectives

2.Choose KPIs that are fixed,

capable of forecasting, and that
avoid common mistakes.

Avoiding the most common

mistakes
After many iterations, here’s the
simple definition we’ve come to find
most valuable:

A key performance indicator is a

measurable value that
demonstrates how effectively a
company is achieving key business
objectives.
To us, a KPI must remain fixed yet be able to
forecast.
 Finding fixed
By fixed we mean there’s a
continuity and reliability
among the measured
outcomes. This means that
KPI 101 |
14

an outcome at one point in

time can reliably be
compared to an outcome
at another time.
For example, if in January
and February you found
that 1 out of every 100
people who started a trial
of your prod- uct became
a customer, this would be a
fixed statistic from which
you might want to build a
key performance indicator.
 Finding what can forecast
There’s no need to go full-on
artificial intelligence here, but
KPIs must, at some level, help
you forecast a result.

Let’s say it seems the time

KPI 101 |
15

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 |

held onto even as an industry undergoes

16

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 |

too difficult and costly to obtain and/or monitor on a

18

regular basis.

So what makes business performance indicators key

and how should a business owner, executive or
manager select them?

Here are six strategies to help you separate effective,

value-creating KPIs from detrimental, value-
diminishing KPIs:
 Best Practices:
Pick KPIs that are aligned with your strategic business objectives

Business “performance” is relative, and

ultimately measured against an organization’s
mission and goals. KPIs must be grounded by
these goals.
 Best Practices:
Make sure the KPIs you pick are attainable

What data points do I need to measure this KPI?

&
There’s no point selecting a KPI for your business if
the data behind the KPI can’t be obtained and
surfaced to stakeholders, or if doing so would be
overly costly.
 Best Practices:
Be acute in your choice of KPIs

KPIs should keep everyone on the same page

and moving in the same direction, and they
should be specific enough to inform specific
actions.
 Best Practices:
Pick accurate KPIs

Does the KPI include all relevant

information? &
How accurate is the KPI in reflecting and
predicting business performance?
 Best Practices:
Select KPIs that are actionable

Can the events grounding the KPI be controlled

by the business?
&
Is the KPI structured and presented in such a
way, and to the right people, to incite action?
 Best Practices:
Pick KPIs that are alive

Do these reasons still hold

true? &
Has your business or the context within which it
operates changed? Can your KPIs be refined to
suit these changes?
 The Most Important KPIs
The most important thing to
remember when looking at
KPI 101 |

a KPI is not what it means

26

for your position, but what it

means for the company as a
whole.

Yes, there are KPIs specific to

marketing, development and
support, to name a few, but
pick KPIs that are aligned with
your strategic business
objectives. Because everything
you do has these targets and
goals in mind, adding them to
your dashboard only makes
decision making, reporting and
effi- ciency, that much easier.
KPI 101 |
27

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.

When monitoring this KPI, it’s important to consider the

spe- cific contexts surrounding each product. For
instance, is a certain product receiving a boost due to a
viral marketing campaign? Or, are you experiencing a
slump because your competition is offering a similar
product at a lower price?
KPI 101 |
30

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

Goal Completion Rate

The Goal Completion Rate (GCR) metric measures the number of
people that complete a specific marketing goal, such as signing
up for a trial or subscribing to a mailing list. GCR should be
paired with sales KPIs such as your lead to win rate to provide
an indicator as to the quality of leads your marketing efforts are
attracting.
KPI 101 |
33

Average Lead Score

Lead Scoring is the process of measuring the quality of mar-
keting and sales leads based on predetermined criteria and
targets. These criteria and targets can range from
demographics to buyer behaviour and user activity, and they
are typically determined by evaluating the characteris- tics of a
current customer base.
 So now what?
Once you have established
benchmarks and targets for
measuring KPIs, you’ll want to
establish processes for mon- itoring
KPI 101 |

this and other KPIs. Dashboards can

34

be critical in this regard. KPI tracking

can be done using dashboard soft-
ware, giving your entire organization
insights into your cur- rent
performance.

KPI software enables businesses to

create, manage and analyze data
from KPIs. The software allows
organisations to enter their data into
one specially designed system, or
connect external services for faster
and more accurate data collection.
This type of software allows
businesses to visualize and
comprehend data from a number of
KPIs that represent different areas of
a business, all in one place.
 KPI reports and dashboards
To be useful, KPIs need to be
monitored and reported on; if they
change in real-time, they should be
KPI 101 |

monitored in real-time. Dashboards

35

are the perfect tool for your KPI

reports as they can be used to
visually depict the perfor- mance of
an enterprise, a specific department,
or a key business operation.

Have a look at some of our live

dashboards to demon- strate how
you can present key performance
indicators to your team:
Digital Marketing Dashboard

Monthly Sales

Performance Davshboard

Executive Reporting

Dashboard
Support Tickets
Dashboard
 KPI 101 |
36

Thank You