You can’t go anywhere in this world without feeling like a data entry point. Every time you check-in on a flight or click on an advertisement, you are being tracked and watched. In fact, 60% of small businesses that lose their data will shut down within 6 months, according to research firm Clutch. Data is so important to businesses because it provides insight into the past which guides decisions for your future. It is no surprise then that this week we’re talking about Key Performance Indicators or KPIs – which makes sure you are compiling relevant data and tracking your progress. Think of it as tracking your own success.
What are KPIs?
Key Performance Indicators or KPIs are quantifiable measures that companies use to track performance over time. In other words, it’s a way to measure how well your company, project, department, or even people, are doing in comparison to your business goals and objectives.
Well designed KPIs can help you in two major ways. The first is using it as a navigation tool. Once it should give you a clear picture of your current levels of performance, the information will allow you to evaluate whether or not you’re in the right path to achieving your goals, and if you’re not, it gives you the tools you need to steer into a different direction. The second is to use it as a decision-making tool. Business are complex and filled with endless amounts of data and information, what a KPI does then is reduce the overwhelming numbers of organizational performance to a few manageable key indicators. With this simplified information it’s easier for a manager or CEO to make informed decisions that can help improve performance.
Make It Your Own, a.k.a. Make It Effective
If you look it up you’ll find several examples of “most used KPIs”, however to ensure success you should keep in mind that every business is different. Think about it, if you’re a company like RebelJet, a platform for flight research, it’s very clear that you’ll have different needs, projects, goals and so on, than a company like Impedio Health, which helps prevent chronic diseases. This way, even though some indicators do overlap when it comes to core business needs (financial and marketing for instance), make sure you outline what is the desired outcome, why does it matter and how you need to measure your own process in order to create effective KPI’s that’ll reflect your company’s needs and goals.
Keeping its make-or-brake nature in mind, here’s what your KPI needs to be effective:
- Is it well-defined and quantifiable
- Is it being thoroughly communicated throughout the organization/department/team?
- Is it crucial to achieving your goal?
- Is it actually applicable?
When thinking and writing them, also remember the SMART concept. Is it specific? Is it measurable? It is attainable? Is it relevant? And is it time-bound?
Why are they important?
The setting of KPIs usually happens during the planning process, for an organization, department, project or anything else that’s relevant for you and your business. One of the reasons why, is that not only do you want the process to be tracked, you want to ensure everyone in your organization is aligned towards the same goals and KPIs. And that’s what makes them so important. Just think about your favorite team of your favorite sport, unless every player in the team is aware of the strategy and goals, they’ll each do something different, that they each individually judge more important, and then what is the likelihood that they’ll achieve the desired results (if any at all)?
One single business will have a multitude of KPIs to manage and keep track of. That large amount of data can get overwhelming or out of control if you don’t develop or have a system in place to keep it all in check. That’s why you can find many software options that allow you to manage your KPIs while simplifying them and keeping them visual. A few examples of software are Klipfolio and Looker, but you can find a full list of the best of them (reviewed, with pricing and demos) right here.
Although we cannot forgo the best and free KPI software. Google Analytics allows you to track all your traffic from websites to apps. With recent changes to their software, they track user sessions instead of “hits” A user session is defined by default as a 30-minute or less interaction with your website or app. Meaning, if you
With this we close our Minimum Viable Product series. We covered what is an MVP, the customer discovery process, defining project specs and how to plan your go-to-market strategy. Sure it’s not exactly a quick read, but this is baed on years of experience. Trials and tribulations. Plenty of mistakes were made as we learned the ropes. If you need help with your marketing automation or process management, please contact us. We are happy to discuss your next project and how to make this happen for you.