Using Key Performance Indicators In Your Business

At its very core, business is about selling a product or service for a profit and then repeating that action on a continuous basis over a period of time. There is always a challenge to drive down the cost of doing business, to drive up the profitability, to improve customer satisfaction and drive up the sales figures.

A very good way of seeing whether you are achieving results on a daily or weekly basis is with the introduction of Key Performance Indicators (KPI’s).

KPI’s are a blend of activity measurement and financials measurement. In fact, whatever you can measure in a business is potentially a KPI but generally speaking, most businesses will have about 10 KPI’s that they track each week. There can be different KPI’s for different departments within businesses.

There is an old adage – “whatever you measure, you can manage”. There is another one – “Whatever you measure and review, improves without making any change to the actual way of doing things.”

It is important that all team members understand the importance of KPI’s. They are not designed to get people to work long hours – they are designed to help understand how effective people are in the hours that they do work.

We often use Sales KPI’s as the best way of explaining KPI effectiveness. With sales KPI’s we can measure appointments, quotes issued, follow ups made, sales closed, sales lost etc. All very easy metrics to measure. What is amazing is the level of detail the collection of KPI information yields over time and makes it easier and easier to manage a team with historical sales and activity data.

If you are interested in driving up the profitability of your business and you want to apply the most cost effective and results focused strategy there is, call me today.