KPI = What is this, anyway?
KPI is the short form for Key Performance Indicator. This numerical value shows you whether your team/company is achieving the set goals.
For assessing the measurable performance of an individual or entire business processes KPIs have proven to be the most effective method. But what can be done with the captured KPIs?
The answer is quite simple by monitoring metrics, companies can evaluate business performance and make data-driven decisions to grow faster, as well as implement optimizations.
If you want to find out what KPIs are and how to best use them, read this blog post to learn more.
What does KPI mean?
KPIs are also referred to as key performance indicators, performance metrics or business indicators.
- Net profit margin – This is used to calculate the percentage of profit that a company earns on its total sales.
- Monthly recurring revenue rate – One of the most important metrics of any subscription business, measuring predictable and recurring revenue components.
- Sales growth rate – Used to measure the ability of your sales team to increase revenue over a period of time.
Types of KPIs
Depending on your company’s goals, you can track different Key Performance Indicators. Since each department in the company has different tasks and goals, they logically measure different KPIs.
To get actionable and helpful information about your company’s performance, choosing the right KPIs right at the start is critical.
You that there are 5 types of KPIs: bitte umschreiben, sich andere Einleitung überlegen, statt “here”
- Business KPIs
- Financial KPIs
- Sales KPIs
- Marketing KPIs
- Project Management KPIs
Now that the terms are clear, it’s time to get down to the nitty-gritty. In the following, we will show you what can be measured with these different KPIs.
If you want to measure your achievement of long-term business goals, then Business KPIs are the best way to do so. Tracking these Business KPIs enables companies to navigate between important business processes and identify areas with the best growth.
Examples of popular business KPIs include:
Sales growth rate
Return on equity
As a matter of general practice, financial KPIs are used by the company management and the finance department. Financial KPIs indicate how well a company is doing in terms of generating sales and profits.
Examples of financial KPIs are:
Monthly recurring revenue
Net profit margin
This type of KPIs allows sales teams to measure goals and target achievement within that department in the company. Sales KPIs can help you keep track of results on a monthly basis and drive sustainable revenue growth.
Popular sales KPIs are:
Monthly new leads/sales
Lead-to-customer conversion rate
Cost per acquisition
To help monitor the success of marketing efforts such as campaigns across all marketing channels, marketing KPIs are the numeric numbers to go with. A quick overview of marketing KPIs can show you how well the marketing team is doing in attracting new leads.
Examples of marketing KPIs:
Cost per acquisition (CPA)
Marketing Qualified Leads (MQL)
Project management KPIs
If you’re in project management, you probably also use project management KPIs to monitor project progress and goal achievement. This will also help you identify successful projects and meet important deadlines.
Popular Project Management KPIs:
We have only given you a few examples here, as otherwise, it would go beyond the scope of this blog post. For the basic understanding, the listed KPI examples are sufficient.
KPI – Dashboard
To get a quick overview of every important goal in the company, you can add the key performance indicators and metrics to a KPI dashboard.
Namely, the KPI Dashboard is a real-time reporting tool that collects, groups, organizes, and visualizes the most relevant metrics.
A comprehensive, real-time business dashboard helps you identify problem areas immediately and find solutions to important issues. You can rely on actual data and not “just” on your gut feeling.
KPI : How do you choose the right Key Performance Indicators?
To choose the right KPIs, you need to define your business goals. Every KPI you track should always be measurable and linked to the achievement of specific goals.
Our tip: It is better to focus on a few key performance indicators than on many irrelevant ones. Above all, you should only track key performance indicators that are relevant for your company.
You should make sure that your KPIs are “SMART.”
In general, you should be aware that Key Performance Indicators vary for each industry, growth stage and project phase.
Last but not least, remember that the KPIs you are measuring now are constantly changing and evolving.
KPI – Our Conclusion
It is easier to optimise yourself as an employee or your company or project if you use KPIs that give you a graphical overview of what your starting point is.
KPI’s give you insight into the past, your current progress, and problem areas and you can use this information to take or implement sustainable steps. Success is guaranteed!
You don’t want to miss anything more from us?
And visit our News page for more blogposts.