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Keep Your KPIs on the Prize

July 25, 2018

Why Key Performance Indicators are important for your Business Intelligence

Businesses love their acronyms. Whether it’s in their names or their processes or their lunch orders—you are sure to find plenty of people in plenty of companies talking about their ROIs during their AGMs while munching on their BLTs.

One of the most prevalent acronyms you are likely to find in a business environment is the KPI, or ‘Key Performance Indicator.’ Now, we know what you’re thinking, that doesn’t sound like a particularly appealing menu option; well, that’s because it is actually a really useful tool for business intelligence.

Acronyms condense terminology to its core components—and that is exactly the purpose of the Key Performance Indicator: to get to the root of what is happening with your business and with your customers.

KPIs take something quantifiable and give you an actual target to aim for. They’re also then measurable—and with the aid of data visualisation—you can really see how you and your business are tracking in relation to your targets.

In the competitive online world this kind of information is pivotal. Effective and relevant KPIs can keep you ahead of the game. These are our top tips for how to best utilise Key Performance Indicators in your business.

Make sure they’re specifically defined

Plenty of business use KPIs that look flashy, but are literally meaningless. They’ll read like a politician dancing around the actual question with smoke and mirrors, and they’ll be just as useful.

If the data you’re analysing doesn’t do the basic job of ‘indicating’ anything about ‘key performance,’ then it’s a waste of time. So, focus on the stuff that’s really going to have positive outcomes for your business.

Factors like cost, profit, budget, and staff satisfaction are universal, but your business will have its own unique KPIs. It’s important to dig a little deeper and make sure you have the right ones for your needs.

It is imperative to have KPIs based around the internal workings of your business, but also to have some aimed at how your customers perceive you.

It’s not an art exhibition

It’s easy to get swept up in the world of visuals when it comes to KPIs. You start inventing things to analyse that are irrelevant just so you can do another cool graphic to wow your colleagues.

But that kind of information is just dead weight. If one picture says a thousand words, then ten pictures will say ten thousand words. This sounds great in theory—but when it comes to work data, no one wants to read (or see) ten thousand words.

If you can say what you need to say in just a few visualisations, then do it. It’ll keep everyone focused on the original KPI targets, and stop things degenerating into a ‘coolest graph’ contest.

Look outward as well as inward

While beauty is on the inside, when it comes to KPIs you do need to be a little bit vain and analyse how the rest of the world is seeing you.

It is imperative to have KPIs based around the internal workings of your business, but also to have some aimed at how your customers perceive you.

These could include data such as how long customers stay with your business, how many new customers you are converting, and the overall number of customers you have over different time frames.

After all, if your external KPIs are failing then it’s not going to matter how many goals you’re kicking within.

 

KPIs need to be specific and purposeful if they’re going to help you stand out from the crowd.

 

And don’t forget…

Rome wasn’t built in a day. KPIs will take time to show their worth, and you need to persevere with them.

Similarly, they cannot be a ‘set and forget’ part of your business. Some will work and some won’t; you need to be open to trial and error, and regularly reviewing them. You will realise that some targets aren’t realistic and need to be scaled back—and even more importantly, that some aren’t relevant and need to be cut loose.

But once you get the balance right you should see that KPIs are the key to your business … and even your heart (but mainly your business).

 


 

Does your business need assistance with goal setting and analytics?

Contact us on 1300 932 435 or helen@wearedando.com.

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