KPI Examples: You cannot run a business based on your gut feeling. To run a successful business you need to thoroughly analyze your financial aspect, sales, and workflow of the business. Businesses use KPIs (Key Performance Indicators) to measure business progress. The KPIs indicate whether the business is able to meet its goals on a regular basis. KPIs are business metrics that tell whether the company has achieved its goal within a specific time frame. Here, we are going to look at some KPI examples:
Sales Revenue
Sales revenue is a sales KPI that can tell a lot of things about your company. The sales revenue result of every month shows whether people are interested to buy your product or service. It shows whether your marketing efforts are working or not. You can improve your sales revenue by hiring new salespeople and improving your marketing efforts.
Net Profit Margin
This KPI indicates how efficient your company is in generating profits. You can predict long-term business growth using this KPI. You can find out whether the income is more than the cost of running the business. If you can increase your revenue then your net profit margin will increase. You can increase the price of your product and try to sell more. You can also lower your production and sales cost.
Gross Margin
If the business gross margin is high that your company will earn more. This will give you the scope to invest in other endeavors. Using this KPI you can know whether to improve your process and production. You should make your production and sales processes more efficient to improve the gross margin.
Sales Growth Year-to-Date
Sales often depend on the season. The sales to growth year-to-date metric, a marketing KPI, tells about the pace at which the sales revenue is increasing or decreasing. If you monitor the sales growth over a certain period it will show where your company is heading. You should invest more resources in sales and marketing activities.
Cost of Customer Acquisition
This customer KPI is calculated by dividing the total cost spent on acquiring new customers by the number of new customers acquired during a particular time frame. You should calculate the customer lifetime value of different client segments and find out which customers are giving you more profits. You should invest more in those customers.
Customer Loyalty and Retention
Loyal customers will increase your sales and help to spread information about the business. The retention rate is the number of customers to use your product on a regular basis. You must deliver high-quality products and provide outstanding customer service to increase this KPI.
Net Promoter Score
This KPI shows the product quality and the level of customer satisfaction. It shows the number of people who will be promoting the product to friends and others. You can improve this KPI by providing the best customer service and high-quality products.
Quality Leads per Month
When your company grows you invest more in the marketing and sales sectors. As a result, you will have more leads. However, all leads won’t turn out to be customers. So, you should measure the qualified leads every month. This KPI will tell you whether you are targeting the right market or not.
Lead-to-Client Conversion Rate
Leads don’t turn automatically into a customer. The sales team must convince the leads to buy. This KPI reflects the performance of your sales team. It will also tell you about the quality of the product you are offering.
Monthly Website Traffic
The monthly website traffic indicates whether your company is becoming reputed or not. Tools like Google Analytics can track the monthly website traffic. You can improve the traffic by increasing your advertising budget.
Time on Site
This KPI tells how long a visitor spends time on your site. If they spent less time that means your products or services are not meeting their requirements. It also indicates that the website is not impressive. So, you should improve the website to attract more visitors.
Milestones
Businesses have specific goals and milestones. This KPI will show the milestones you have achieved and those that you couldn’t. This will give you an idea about your team’s capacity.
Employee Satisfaction
When employees are happy they can work more effectively. This KPI will tell whether your employees are satisfied or not. You must reward them to make them happy.
Abandon Rate
Sometimes the customers are contacting your customer support team but later not buying anything. If the abandon rate is too high then you need to invest in your customer services resources.
Training Cost
A high training cost indicates that the employees are being continuously trained. This is a good thing as you will get better performance from them. However, you should also make sure that you don’t spend unnecessarily.
Cash Flow Rate
The cash flow is a financial KPI that indicates the financial condition of the company. There must be enough cash flow to run the business.
Inventory Turnover
This is the number of units sold in a particular period. This KPI indicates how efficient the company is in moving the goods. Businesses should achieve a high inventory turnover rate.
Accounts Payable Turnover
If the company doesn’t pay the suppliers on time then the business won’t run. Accounts payable turnover, financial KPI, is the rate at which the company is paying for the goods and services over a specific time.
Relative market share
This indicates the portion of the market your company controls. This is an indicator of how your company is performing in relation to the competitors.
Funnel Drop-off Rate
This is the number of visitors who abandon the cart without completing the buying process. This KPI will help the company to understand the underlying problem and fix it to boost sales.
Lastly, You should track relevant KPIs for your business that will correctly measure your business goals. Tracking irrelevant KPIs is a waste of time and it will distract you from your actual goal. You must remember that the KPIs should be measurable; have a clear goal and source of data based on which important decisions can be made.
