How Does Your Business Measure Up?
“If you can’t measure it, you can’t improve it” – Peter Drucker
One of the most effective ways to become a more successful business is measurement. Measuring progress towards your goals provides fact-based, visible evidence that shows very clearly what works and what doesn’t. Data helps inform strategic decisions about whether to continue doing the same activities or to make changes to keep the business on track to achieve goals.
What Is a KPI?
KPI stands for key performance indicator. It is a measurement of progress in an area that is critical to a business. If a business, or an employee, doesn’t perform well in this activity, the business will eventually suffer significantly. Performing the activity well, on the other hand, leads to better overall results for the business.
KPIs can be quantitative or qualitative. Quantitative KPIs are just numbers; for example, if you use email marketing on a regular basis, you can track the number of subscribers or how many people click on the contact button. Qualitative KPIs describe the qualities of something: experiences, feedback, comments and feelings. To stay with the email example, a survey that asks email subscribers what topics are most useful to them provides qualitative data.
While qualitative KPIs may provide deeper insights and take into consideration context, gathering qualitative data is more time consuming that tracking numbers. To return the email example, a rising number of subscribers indicates the email campaigns are hitting the right targets, but qualitative results will show what types of content are driving the rising number of subscribers.
Choosing the Right KPIs Is Critical
One size doesn’t fit all when it comes to KPIs. You’ll want to measure activities that matter to your business, not just for the sake of measurement. And be sure to consider the implications improving those numbers might have on the big picture. For example, it might seem like an improvement to challenge employees to prepare beverages faster, but if errors increase as employees rush through the process, service will decline and customers won’t return.
Here are some of the general categories of KPIs:
- Financial
- Customers
- Process
- Employees
Here are a couple of guidelines that apply to all businesses:
- Avoid setting too many KPIs
- Select KPIs that are realistic and attainable
If you’re not currently capturing metrics about your business, I can help you determine the correct KPIs that will inform strategic decisions and accelerate progress towards your goals.
If you would like to learn more about how this might apply to your business, let’s talk: