Key Performance Indicators (KPIs)
Evaluate the success and effectiveness of your business and keep your team's work on schedule with convenient measurement - Key Performance Indicators.
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What is KPI
Key Performance Indicator, or KPI for short, is a quantifiable measure used by businesses to evaluate their performance over time and progress towards achieving their goals.
Every company will use a different set of KPIs, depending on its long-term objectives, business area, type of management, and numerous other factors. Whatever type of KPI your company sets, if they show positive results, your strategy is successful and you should focus on maintaining it. If the KPIs are not so great, it is a warning of some issues that you should identify and improve.
Why KPIs are Important
Track and monitor progress
Key Performance Indicators give you measurable and actionable data about the results of your business efforts. Properly set KPIs will track the most vital signs of your company, allowing you to keep a finger on the pulse of its health.
Spot problems and opportunities
KPIs allow businesses to have the most relevant data at their fingertips. This will help you identify signs of issues before they have a chance to manifest at full force or detect arising opportunities before anyone else could capitalize on them.
Stay on track and make adjustments
With those issues and opportunities in mind, proper KPIs will show you how to course-correct. You will see which efforts are working best and are worth focusing on, how to avoid pitfalls while staying on your business target, and how to shift your initiatives to reach max efficiency.
Analyze patterns over time
Measuring Key Performance Indicators Q/Q is a great way to detect long-term patterns. This can provide lots of vital information - you may unravel seasonality in your business performance, identify slower periods where you could insert training initiatives or system updates, or find habitual underperformers.
What types of KPIs you can monitor using the Goals app
- Financial. This type of KPI indicates the income that you want to gain after a particular key result achievement.
- Custom. This type of key performance indicator gives the ability to choose the proper metric and set the number of the metric that you want to achieve.
- Task Completion. This type of KPI means that its implementation fully relies on the completion of tasks that belong to the current key result.
Explore all benefits of KPIs with the Goals app
Track and monitor your progress, stay on the right track, and constantly improve your workflow to complete set KPIs.
Main benefits of KPI
Measure your key results
Usually, key results have a finish date and responsible team members. KPI isn’t related to key result implementation. It aims to measure how well a particular key result was achieved.
Track project performance
Before completing the key result, you should check if its KPI is achieved. If yes, you do a great job. If not, analyze what factors have affected this and try to prevent them in the future.
What is SMART KPI
KPI is a unit of measurement that evaluates the success of a particular key result.
SMART is a model of setting key results. SMART stands for:
- Specific (simple, sensible)
- Measurable (meaningful, motivating)
- Achievable (attainable)
- Relevant (reasonable, realistic)
- Time-bound (time-limited, time/cost limited, time-sensitive)
Combining KPIs and a SMART framework improves your business performance and brings your team to success.
How to Set Up and Measure KPIs
Many businesses, many KPIs. To define Key Performance Indicators that will work for your company, answer the following questions:
- What is your overarching business objective?
- Why does this objective matter?
- How will you know if you’re making progress towards the objective?
- How can you influence your progress?
- Who is responsible for reaching the objective?
- How often will you review your progress?
Once you know the answers, it will be easy to figure out which KPIs suit your business best.
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Examples of Key Performance Indicators
Marketing KPIs
- Marketing Qualified Leads
- Return on Marketing Investment
- Brand Awareness
- Funnel Conversion Rates
- Customer Acquisition Cost
- Customer Engagement
- Customer Retention
Sales KPIs
- Average Profit Margin
- Average Purchase Value
- Sales Target
- Monthly Sales Growth
- Product Performance
- Lead Conversion Rates
- Customer Lifetime Value
Financial KPIs
- Earnings before interest and taxes
- Liquidity ratio
- Economic value added
- Gross profit margin
- Net cash flow
- Interest cover
- Contribution margin
Customer relations KPIs
- Customer satisfaction
- The number of customer complaints
- The number of calls to customer service
- Customer support ticket response times
- Customer lifetime value
- Percentage of customers who quit your service
- Customers gained over a set period
Employee success KPIs
- Number of projects completed over a set period
- Units processed over a set period
- Sales quotas and other personal targets
- Job satisfaction
- Customer satisfaction
- Work speed
- Absenteeism
Human resources and employment KPIs
- Employee turnover
- The number of new hires
- Cost per hire
- Salary competitiveness ratio
- The number of promotions
- Retirement rate
- Employee satisfaction
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Check the KeepSolid Goals app and see how it helps set and track KPIs.
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