You can’t get to the top of the sales ladder without monitoring each step towards your goal.
Performance analysis in the shape of sales metrics, customer satisfaction, revenue improvement and cost reduction, is a crucial component of business growth. By taking into account a number of measurable factors, you can calculate and observe trending numerical patterns that give insight into the health of your organization.
In doing so, you are likely to pay more attention to some variables than others—variables that have a relatively greater impact on the ebb and flow of sales. These are your Key Performance Indicators (KPIs), which, as the name suggests, are measurable values indicating your business progress. Depending on the nature of your industry, KPIs are determined by your company’s objectives and goals, shedding light on how close or far you stand from your desired outcome.
It’s an invaluable measuring tool to help you keep track of performance, be it in the context of employee evaluation or marketing tactics. At the end of the time, KPIs shine a light on all the places that need considerable attention, specifically charting out the zones that are doing well or alternatively, need improvement.
The process of generating KPIs varies from company to company, seeing as each industry comes with its own set of goals and challenges. This means that a comprehensive list of KPIs can be generated, based on the nature of your business and the scope of expansion.
In general, however, KPIs should always be:
- Crucial to achieving specific objectives.
- Easily monitored and reported.
- Attainable and actionable.
Types of KPIs
No two industries can have the same list of KPIs. This is because each business has its own philosophy and objectives that vary with its team, market, campaign and slogan.
Every successful business, however, have 3 basic domains of performance analysis that shape their KPIs. These include:
1. Financial Metrics
Taking into account sales, cost of goods sold, profit, sales by region, and revenue versus target, your financial metrics provide significant insight on the financial pulse of your business. This highlights all the areas responsible for returns and budget.
2. Customer Metrics
Everything to do with customer, from number of customers to customer acquisition rate—customer metrics offers a valuable glance at your relationship with the market.
3. Conversion Rate
This indicates the rate of conversion of traffic into sales, which generally tends to be 2.5% in the eCommerce industry. Arguably the most important KPI, it uses essential conversion tools such as a sales funnel to analyze business performance.
Too much date can be difficult to collect and process, especially if you run a big company.
This is why it pays to invest in user-friendly technology that simplifies the process of task management.
Adnia Solutions brings you simple and affordable solutions through fast and efficient ecommerce templates for KPI budgeting, finance management, timesheets and cash flow.
Buy their premium finance template and track your KPIs more efficiently!