Do you want to improve the way your business operates? Are you looking to pinpoint the areas of challenge and opportunity for your business?
If you answered yes to these questions, the first step to getting there is to learn all about KPIs.
KPIs, or key performance indicators, are among the most critical measurements to help you understand how your business is doing. However, it can be hard to pick out the KPIs that align with your business goals.
So, if you’ve been wondering what are KPIs and which you can use to take your business to the next level, you’ve come to the right place. Keep reading for everything you need to know about using KPIs.
What are KPIs?
A key performance indicator is meant to set targets for an individual or team to follow. KPIs are crucial because they let team members know exactly what they have to do to reach a specific goal while simultaneously allowing the company to understand where they need to improve.
To choose the right KPIs for your team, you must establish your goals and determine which metrics vs. analytics you should strive for (read here to learn the difference between the two).
For your KPIs to be efficient, you must first ensure that your business goals are SMART (specific, measurable, attainable, relevant, and time-bound). Here’s an example:
Instead of saying, “I want to increase my company’s social media followers,” say, “I want to gain 10,000 followers on my business’ Instagram account by the end of the first quarter.” This will make it easier for you and your team to understand exactly what you are trying to achieve.
5 KPI Examples
To use KPIs effectively, you should implement them for every area of your business, including every project, campaign, individual, and team performance. Let’s go over some examples of KPIs that you can start using for your business today:
1. Social Media KPIs
Nowadays, many businesses use social media to take their brand to the next level. If you are one of them, these are a few social media KPIs that you should be using:
Write SMART goals for each, and you’ll start noticing great results!
2. Marketing KPIs
For general marketing campaigns, here are some KPIs that can help bring every campaign to the next level:
- Cost per lead
- Customer lifetime value
- Organic traffic
- Conversion rates
Remember that you might have different KPIs depending on the goals of each of your campaigns.
3. Sales KPIs
If your business model relies heavily on sales, your teams might have KPIs such as:
- Average order value
- Total sales
- Lead conversion rate
Exact goals and numbers will always depend on your business needs.
4. Financial KPIs
To track the performance of your business’ finances, use KPIs such as:
- Return on assets
- Debt-to-equity ratio
- Gross profit margin
- Net profit margin
Pro tip: for finances, remember to draft your KPIs based on margin, revenue, profit, and expenses.
5. Project Management KPIs
If you are managing many projects within your company, you can track their performance by using these KPIs:
- Planned value
- Number of errors
- Budget variance
- Return on investment
For successful project management, always focus on KPIs that will help your team finish high-quality projects on time and on budget.
This guide answered the question “what are KPIs” and gave you some practical examples that you can start using in your business today. Whether you need to measure your team’s performance on a social media strategy or on project management, now you have all the tools to draft successful key performance indicators.
Are you looking for more tips and tricks to improve your business? Check out the rest of our blog!
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