When doing business, it is essential to measure your progress occasionally to know if you are growing or achieving your business goals. While there are known measures of success in every industry, you need to have metrics that define success in your company.
Defining Key Performance Indicators (KPIs) for your team will help you see if you are growing or stagnant and predict the future. Your KPIs should answer the following questions:
- What are we measuring?
- How are we going to measure it?
- Can we attain it?
- When are we going to attain it?
If you are wondering what are KPIs, then you have come to the right place. Key Performance Indicators refer to measurements that demonstrate a company’s achievements in terms of financial, operational and strategic performance against business goals.
KPIs should always align with industry benchmarks. KPIs guide processes such as lead generation, deal closing, marketing, and customer service, among others.
Every team member should work towards achieving their department-level KPIs. Without KPIs, it will be hard to gauge what your team is doing and whether it is adding value to the company.
KPIs should be SMART (Specific, Measurable, Attainable, Realistic and Time-bound) to give your company a competitive advantage. This guide will help you set SMART KPIs for your business.
Make them specific
KPIs help a company measure customer satisfaction, employee satisfaction, financial performance and internal process quality. Whatever metric you measure, you need to be as specific as possible. For instance, you can set a KPI to increase revenue and acquire new customers.
Make them measurable
To evaluate your success or growth, your KPI should be quantifiable. Ensure you have an analytics tool or system to measure results from your actions. For instance, your KPI for acquiring new customers could be measured by the number of customers you target. Say, acquire ten new customers. If your KPI is financial, you can have something like make sales worth $1000.
Make them attainable
You can only know the real position of your company if you set attainable KPIs. Your KPIs should have a roadmap on how the team will get there. For instance, you can organize advertising campaigns to support your new customer acquisition or lead generation goals. Also, highlight the resources available to help the team attain those KPIs using the set roadmap.
Make a timeline for your KPIs
Finally, it would help if you gave your team a timeline for attaining those KPIs. Setting the time ensures that you can see whether the team is making progress or not. For instance, you can set KPIs for a month, a quarter, or a year with periodic milestones. If you want to acquire 100 new customers every month, you will be able to review your daily tasks and ensure they are geared towards acquiring 100 customers by the end of the month.
In conclusion, you will always need to review and refine your KPIs until they are SMART enough for your current growth stage. Always achieving your KPIs could mean they are not as challenging as they should be, while always failing to achieve them could mean they are unrealistic.
Look at your team, current resources and where you want to go as a company, then set your KPIs based on that. Remember to share them with all stakeholders involved in their implementation and monitoring, review them periodically and make changes that align with the larger business goals. Sometimes, you may need to change your business model altogether.