A key performance indicator or KPI is a way of tracking business data more effectively. It helps you to identify what works and what doesn’t so you can improve your business. This applies to all aspects of the business, including marketing, sales, customer service, finance and accounting.
Business performance measurement has become increasingly important over the past decades. Today, companies are tracking even the tiniest statistics, which used to be completely unthinkable. This huge flood of data requires that businesses learn how to manage it. And that’s where these KPIs come in handy. They help management teams to understand what’s really happening under their watch. It’s important for all business owners to take part in this process, but there are ways to make it easier. Identifying the KPIs that matter most is one way to streamline your efforts and focus on what’s really important seeing your company achieve its goals.
There are many ways to measure a company’s overall performance. These can be classified under three different types of business metrics, which are financial, operational, and strategic.
Some of the most common business metrics include sales revenue, profit margin, growth year-over-year, customer acquisition costs and retention rate, net promoter score and Employee Happiness.
Business leaders must understand better than ever before that their customer experience can drive or diminish profits, and they must have the tools to create a cohesive web of data points across the enterprise — from marketing to IT to business development — that keeps everyone’s finger on the pulse of the customer, no matter where they are in their journey.
Business performance metrics can provide insights into the health and status of a company. They can also show you the current and potential future state of your business and give you a guide to help steer your company into a position that will generate the most profit and longevity. Using metrics to measure business performance should be an essential tool for any enterprise.