Kpi’s – what you can measure you can manage
How often have you heard Peter Drucker’s quote “what you can measure you can manage”?
As companies experience rapid growth, a common question is “What should we measure?”
Here are some:-
• do you know the number of new website visitors you received in the last 30 days? (Leads)
• do you know what percentage of them turned into new paying customers? (Conversions)
• do you know how the level of satisfaction among your customers has fluctuated over time? (Retention)
• do you know the precise average lifetime value of your customers? (The long tail)
• do you know the average price per transaction ?
• do you know the number of times your customer will tans act with you during theyear?
• do you know how much it can Syd you to run your business each month
• do you know your margins
There are many questions such as these that measure each aspect of your business.
And if you don’t know the answers, if you can’t measure them, then you can’t possibly manage or improve them.
Many leaders are finding that they have more information than ever at their fingertips—but this can create confusion, too. What good is having access to data that you can’t use.
The best practice is to identify a handful of key metrics—or KPIs—that will help you measure the health of your business.
We’ve found that measuring a handful of KPIs in each of these four categories can help you keep a pulse on the overall health of your enterprise: Employees, Customers, Revenue and Process.
Here’s a list of examples of the types of KPIs you might measure in each category if you are in the service industry:
1 Utilization rate
3 Employee satisfaction score
4 Employee engagement score
6 Performance (specific desired result by role)
7 Number of open positions
8 Time to fill positions
9 Number of managers on virtual bench
10 Training hours
2 Profit margin
3 Year-over-year revenue growth
4 Cash conversion cycle
5 Cost of acquiring a customer
6 Cost of service delivery
9 Revenue/product line or service delivered
10 Actual v. budget
1 NPS or satisfaction score
3 Amount ($) of up-sell opportunities
4 Service renewal rate
6 Number of customer complaints
7 Number of open support tickets
8 Percentage of customer requests
9 completed in X time
10 Number of customer testimonials
11 Number of referrals
1 Project profitability
2 On time product/service delivery
3 Scheduled downtime
4 Unscheduled downtime
5 Number of defects
6 Percentage of bugs detected in-house
7 Safety incidents
8 Idle time
9 Time to product launch
10 Length of sales cycle
This list is by no means comprehensive, and if you measured everything on this list, you’d be measuring too many things. The trick to setting a valuable KPI for your company is to focus on your specific business model and what you need to know in each category.
Narrow your list to the top 8-12 KPIs during your team’s quarterly planning session.
Not sure which KPIs to focus on?
Looking for more KPI Examples to help get you started? Check out our additional resources: