When it comes to business, tracking your progress is a must. This is where Key Performance Indicators (KPIs) come into play. A KPI is a measurable value that demonstrates how effectively a company is achieving key business objections. A few of the most common ones used in small businesses include: net profit margin, sales revenue, customer engagement, lead-to-costumer conversion rate, and company goals met. While defining your measurable is crucial, ensuring that you’re avoiding these common KPI mistakes is just as important.
Below are four common errors that can occur when tracking KPIs.
You have too many KPIs.
Many assume that the more numbers they measure, the better. However, too many KPIs can actually deter you from keeping an eye on the numbers that matter the most. The magic number is ten. Aim to select ten KPIs that you believe your business can benefit from keeping an eye on.
Your KPIs aren’t specific to your business.
Sure, brainstorming measurable KPIs with your team is a great start, but more thought should go into the process. Your KPIs should be hyper focused and specific to your industry. Meaning, if you’re a real estate agent, you’ll have different points to measure than a restaurant owner. Avoid generic KPIs that don’t relate back to your business.
Your team isn’t owning the KPIs.
We all know how important motivation is in the workplace. If you’re not making it your priority to place emphasis on your KPIs, then there’s a good chance that your employees won’t as well. Stress the importance of hitting every KPI and make sure that you celebrate every victory. This will help your team stay focused and motivated.
You’re not challenging and updating your KPIs.
Once you’ve identified the proper KPIs for your business, they are often never challenged. But a KPI that works one year might not work in a couple of years. As time goes on and your business evolves, you must make sure that you’re revisiting your KPIs and determine if there are ones more suitable for your goals.
Avoiding these common KPI mistakes can help you not only ensure that your business is on the right track but can also help you hone in on your focuses.