Key Performance Indicators Business
Although industries have commonalities every business is unique and so with every business, organization and venture comes the question what are the key business activities that drive success?
The business model, the way the venture is designed to make money informs the key business activities. The key business activities along with the goals of the business inform the key performance indicators.
For example if you are running a food bank the key business activities are both receiving food donations and donating food.
The food bank will determine it’s own success markers and goals. For our purposes let’s say the food bank founders define success as the number of families served, the number of food recipients, $ of food donated, # of people donating food monthly. These are not metrics . They are the very specific key performance indicators that will illustrate the success of the food bank and are the benchmarks that should be the focus of the business and marketing strategy.
Don’t get your undies in a wad. And don’t let this acronym confuse you. Keep clear.
We don’t want to measure everything. Now let’s take another example. Let’s say your business is an online conversion website and the key business activities are driving people to the website and getting them to sign up for the newsletter, writing effective auto sender emails and developing high profit affiliate partnerships. The key performance indicators that we might choose to evaluate and monitor would be CR; close rate on the auto sender campaign, CR; conversion rate; the % of people who come to the site and join the email newsletter.
If you are a salon your key business activities will be to attract new clients, retain existing clients ( provide high quality hair cut, color and stying services), retain high quality staff, provide convenient services and do it all in a manner that is profitable! In monitoring the key business activities the salon has a host of possible key performance indicators to choose from but let me say one more time the key performance indicators are driven by the very specific goals of the business- NOW!
Some potential key performance indicators for salons; salon gross profit %, average ticket per stylist, number of clients served per stylist, salon clients per hour, salon sales per hour and many more…
The key is to ask; “What are the key business activities that drive success?”
Now. “How do we best monitor our performance on these activities?”
Don’t get your underwear in a wad over KPI’s. Businesses have been identifying the ways they make money and monitoring their results since the beginning of business time.
Now, we just have another fancy acronym. What is the goal? What defines success? And what is the best performance indicator we can use to monitor success along the journey?
pam @ pam hoelzle.com