Key Performance Indicators, or KPIs, are measurable values that can demonstrate the effectiveness of your business in achieving your company’s objectives. These values can be quantified and measured to track and determine the status of a specific business process and is designed to trace where you started, where you are now, and where you want to go. Essentially, KPI’s are an essential part of the health of your business, helping you find, diagnose, and fix problems before they become out of control.
There are many moving parts you should be tracking as a business owner. Revenue is one of the most important KPIs for a business to keep track of. Wouldn’t it be nice to see when and if you will hit your revenue goal? Without KPIs in place, how do you currently accomplish this?
In order to measure your progress, there must be a process in place that allows you to identify the metrics you’ll need to trace to achieve your objectives and provide predictability. At the same time, it’s important to know how you are currently doing and if there are additional steps needed in order to reach your goals.
Just like in the previous example, there are important metrics that provide insight into the health of your business. This information helps you to collaborate and make intelligent decisions that can affect your business positively. KPI’s can help your business measure productivity, progress effectiveness, predictability, and identify issues that ultimately could become potential problems.
KPIs to consider for measuring your business effectiveness include:
Is there a revenue goal that your business needs to reach? Quantify what that goal is in order to track it. This will help you see when you will reach your goal and what actions must be taken in order to get there.
What is the number of qualified leads that turn into clients? Tracking the number of qualified leads can provide you with a potential outlook of what needs to happen or how to improve your process to better qualify a lead.
How many quotes turn into real sales? It’s important to understand if the processes in place are good or in need of improvement and helps in identifying the bottlenecks.
You need to understand who your best closers are and understand what they are doing in order to close sales that the rest of the team are not. Perhaps have them train the rest of your team, collaborate, and provide guidance to ultimately change your strategy.
You also need to understand what your clients like about you, what keeps them working with you, or vice versa. Understanding areas of improvement can only benefit your business, giving you insight on what you can refine and giving you the ability to create deeper strategic partnerships with your clients.
Survey your clients constantly and ask all the hard questions about the services and products you provide for them. Good questions to ask are, “Are you getting value,” “What don’t you like about our products and services?”, or “Do you have any annoyances or pet peeves when interacting with us that we could address?”
Your business should observe and measure all of the above metrics, allowing you to keep moving forward and providing value to your clients.