Key Performance Indicators or KPI's should be selected by a business owner to measure performance, but getting the most benefit depends on aligning the indicators with the business objectives and goals.
There is a wealth of information available to help owners pick and choose the right indicators for their KPI dashboard. Website articles or postings such as this, as well as the tips and tricks published within industry leading magazines can offer solutions. Business coaches can be hired to help with this task, as examples of effective performance dashboards are offered everywhere. There is no shortage of places where business owners can look to purchase a suitable software program. This of course, is part of the problem.
We believe that understanding key business information is a driver for business grow, and that is why all TMD Clients are set up with their own KPI dashboard.
The first step to selecting the right indicators is to start with the ones that will measure the core components, the things that keep the business going.
Every business must monitor its revenue closely. Revenue is the first basic indicator to choose for determining ways to track improving business performance.
If attracting new customers is a goal for the business website, the conversion rate is another helpful indicator. It is just as important to understand what proportion of business is being secured, proportionately against total enquiries, as it is to singularly know that the right amount of business has occurred.
It is easy to start by selecting everything, resulting in too many indicators and an impractical level of information to process. The idea is to use only those metrics that will provide information of real value. It may be interesting to learn how many visitors came to a website or spent at least five minutes or more browsing the pages, but that will not be of any benefit if there is no correlation between time spent browsing and people who make a purchase.
KPI's should prompt you to interrogate the data, to ask questions and drive your understanding deeper - whilst presenting opportunities to make changes.
Once the core business KPIs have been set, you may wish to set KPIs that relate to other areas of your business, including:
An even mix of indicators will provide a well-rounded understanding of how the business is performing and where changes need to be implemented.
The quantitative indicators include hard facts, such as numbers of customers, which product was a best seller and what amount is representative of the average transaction value.
The qualitative indicators are directly related to customer feedback, comments regarding products, testimonials and the nature of any complaints. These are more subjective in nature, but they can be hugely informative and powerful if the insights are acted upon promptly.
Finding a partner that provides an easy-to-use platform with multiple indicators - customisable and suitable - for your type of business, is one thing that can help a business to develop an edge.
This can enable you to select the right indicators and get the greatest benefit from your dashboards. Compare companies to determine which will best allow you to measure the performance of your business, according to specific goals and objectives.