How do you know if your company is successful? You set goals and make plans, but it doesn’t stop there. KPIs, or key performance indicators, are what your organization measures to see if it is on track to meeting its goals. They are all about helping you understand where you are right now so that you can get to where you want to be.
Why Are They Important?
Measuring the right key performance indicator will help your company determine specifically what is working, and where changes need to be made. Company objectives translate into campaigns or initiatives, which can then be assessed. They are important for any type of organization to have, and provide information that can be turned into actionable steps. Analyzing them allows you to see very clearly if you’ve met your goals, and keep your company moving towards its desired outcome.
Research from Advanced Performance Institute found that “less than 10% of all the metrics that are collected, analyzed and reported in businesses are ever used to inform decision-making.” Yikes.
If your business decisions aren’t based off of data, then what are they based on? KPIs give you a measurable reason for the decisions you are making. The assertions that are made about your business should be backed up with evidence and facts, and that is where these indicators comes in.
Measuring KPIs can lead to the following benefits for your company:
- Everyone Is On The Same Page: Key Performance Indicators help get everyone in the company working towards the same objectives. They help to keep people motivated because they break goals down into something concrete with targets to reach at multiple points throughout the year.
- Make Management More Efficient: Having clear tasks and metrics that will contribute to KPIs ensures that someone is monitoring if those things are getting done, and can help departments to prioritize.
- Accountability: Knowing that the KPIs will be reviewed helps people to take responsibility for their part of the measurement. It also helps managers to see how individuals are contributing and to review their performance. KPIs enable people to see how their work impacts company goals, and provide an opportunity for growth by understanding what you are doing well, or where there is room for improvement.
- Consistency In Results: If you are doing something well, wouldn’t you want to know so that you could continue to do it? They help you to see where you should be focusing resources.
The performance indicators your company chooses to measure will vary depending on your industry and company-specific objectives. A challenge for many companies is deciding which key performance indicators, out of thousands of possibilities, are most important. Data is all well and good, but it shouldn’t be collected arbitrarily. You need to know how to build strategies from it in order to continue moving forward. These indicators help your company to see if you should continue doing something or do more of it, stop doing something entirely, or make changes to what you’re doing.
What’s The Difference Between A KPI And A Metric?
These are more than just data or metrics. A metric is just a number of something, but not all metrics are a KPI; they need to be measured against your company goals and objectives. When you begin to sort through a sea of numbers and reports, and make comparisons or draw conclusions, that is where they arise.
What Ones Should You Be Measuring?
The KPIs your company should measure will be based off of overall organizational objectives, with each team or department having the potential to measure their own individual indicators. Objectives translate into campaigns or initiatives, which can then be assessed.
Every company is different, but with your marketing strategy, here are a few that are always a good idea to measure:
- Sales Revenue
- Unique Website Visitors
- Traffic-to-Lead Ratio
- Customer Retention
- Marketing Qualified Leads and Sales Qualified Leads
- Return on Investment
- Landing Page Conversion Rate
Make better-informed and strategic decisions for your company by taking time to not only establish goals, but determine which key performance indicators will help you measure success.
