KPI’s or Key Performance Indicators allow you to focus your business development team on the specific elements of your business that drive growth.
The biggest time waster in any company: busy work! Most people focus on busy work because it’s easier than tackling the issues that will grow your company. KPI’s give your team a very specific set of tactics that drive growth for your business. Sitting down on a regular basis with your direct reports and reviewing their progress, usually weekly, helps them leave the busy work behind.
KPIs can cover revenue, profit margins, customer acquisitions, client retention, ROI and relationship strength, as well as brand recognition.
Three things to keep in mind when developing your KPIs:
1. Your KPI’s must align with your business strategy
2. They should drive your current marketing plan
3. Be clearly measurable
How do you develop your KPIs?
1. Make a list of what key factors drive business growth for your company. Each company will have a unique set of KPIs.
For your sales staff your KPIs may look like this:
a. Prospect calls made each day
b. Appointments made each week
c. Value of deals closed per quarter
d. Increase over previous year in new customers per quarter in a specific demographic region.
For your marketing staff your KPI’s may be:
1. x number of “value driven” contacts per prospect per quarter
2. increases in website traffic
3. x number of “value driven” contact per client per year
4. leads from the website
5. x number of blog entries posted each month
Steps in developing your KPI’s:
1. Determine the specific actions from above that result in business growth for you company.
2. Define the data required for measurement in very specific terms.
3. Determine how the data will be captured and develop measurement and reporting tools to match each KPI.
4. Schedule regular meetings, usually weekly, to assess progress and keep the team/individuals motivated and making progress.
5 . Meet at least once per year to review KPI’s, and their effect on business goals and objectives.
Potential stumbling blocks:
1. Measurements misaligned with your business strategy.
2. Too many metrics, so that the process is confusing or too time consuming to be effective.
3. Metrics without supporting human capital to maintain or monitor effectively.
4. Using KPI’s for blame or finger pointing. KPI’s should be used as a starting point for effective discussions.
Finally, everyone must agree on the KPIs. If they make real world business sense this shouldn’t be a problem.
Chief Marketer Blog: How to Use Key Performance Indicators Jun 28, 2006 3:22 PM, By Ray Schultz