Key performance indicators (KPIs) are a valuable way to create a culture of accountability in your workplace. These valuable tools can measure success or push an underperforming department to excel. They can provide a framework for goals, whether it’s an individual or a business. Here is how you should set, track, and achieve KPIs for the New Year.
No matter the size, your entire organization should be goal-driven, from the frontline staff to your CEO. There is simply no better way to keep a company moving forward. But how do you set and measure these goals?
First, the organization should review last year’s metrics in light of market trends. What are realistic, achievable goals for 2021? How do they impact your overall strategy? These high-level KPIs should be part of the organizational mission and something that every employee embraces as their goal. They inform departmental goals, which is the next step in setting KPIs. Finally, each employee should have their own KPIs to work toward.
How to Use KPIs to Increase Revenue
Companies use KPIs to focus on a set volume of goals. KPIs should be reviewed quarterly and allowed to shift based on market performance or other factors affecting these goals. The ongoing effort to reach KPIs along with the reality-check of revisiting them regularly helps organizations strive toward a bottom-line impact for the company.
KPIs affect everyone in the business, from onboarding and hiring to sales and marketing revenue. The goal is to hit these numbers, but also to shift them to take advantage of what’s happening all around you. It’s in this way that your company can stay ahead of the competition.
Typical Types of KPIs
KPIs depend on your industry, the size of your business, your strategic goals, and where you are in the company lifecycle. However, no matter the type of company, your KPIs should be both measurable and attainable. Whether you’re in customer service or marketing, finance, or HR, KPIs should guide your work and be the finish line. Some examples of the types of KPIs you may select by the department include:
- EBITDA, or earnings before interest, tax, depreciation, and amortization.
- Net profit, or how much revenue a company can retain after expenses, payroll, taxes, etc.
- Gross profit, or how much income a company keeps after deducting the cost of producing goods and services.
- Projected versus actual revenues.
- Debt versus equity ratio.
- New customer sales versus upselling existing customers.
- Regional and national sales.
- Proposals written, won, and lost.
- Number of prospecting meetings set.
- Volume of online versus in-store sales.
- Length of sales cycle.
Customer Service KPIs
- Length of customer retention, usually measured by repeat sales.
- In-store repeat foot traffic.
- Customer satisfaction scores.
- Customer issue resolution metrics, such as the number of support tickets and the speed of response.
- Call center time-to-answer on a call queue or by email.
- The number of customer complaints.
HR and Recruiting KPIs
- Hiring metrics such as time to hire and the cost per hire.
- Number of employee referrals.
- Employee absenteeism ratio.
- Employee retention and satisfaction.
- The number of interviews per time period.
Establishing and tracking KPIs is much easier when you have an applicant tracking system (ATS) that can help you track and measure activities. It can eliminate the manual spreadsheets so common in performance-based environments. Talk with Exelare about how a KPI-driven ATS platform can help your entire team improve.