Do You Know Your Key Performance Indicators (KPIs)?

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Key performance indicators, also known as KPIs, gauge whether or not your business is on track. Operating a business without KPIs is like driving a car without a steering wheel. KPIs focus on performance and reveal which areas in your business need attention.Question
There are scores of KPIs, and not all, or even most of them, will be relevant for your business. The key is to learn which ones will give you a snapshot of your company’s health and understand the best way to use them. These are a few important examples.
Key Financial Metrics

  • Revenue growth rate tells you the rate at which you are increasing your company’s income.
  • Net profit is income minus expenses.
  • Net profit margin is the percentage of your revenue that is net profit.
  • Gross profit margin is the percentage of your revenue that is gross profit. This is profit generated for each sales dollar.

Understanding Your Customers

  • Customer profitability score gives you a window into how much profit individual customers bring to your business after deducting the costs of attracting and retaining them through advertising and customer services.
  • Conversion rate indicates your ability to translate inquiries, sales calls, and Web page views into paying customers.
  • Relative market share shows the amount of a slice of the pie you have compared with competitors in the same market.

Understanding Your Employees

  • Staff advocacy score indicates whether your employees consider your company a good one to work for.
  • Employee engagement level looks at whether your employees’ behavior contributes to the business’ overall goals.

To get a better handle on your business, you need to ensure that you are going in the right direction. We can review which metrics are the most important for your business and provide guidance how to best use them to create profitable company.

Need Guidance and Help?
If you need advice, give us a call and we will be happy to discuss your situation.