You’ve heard it all before: establishing KPIs is a critical step in growing your business, but if you’re measuring the strength of your company based on how many leads your human resources department brings in and the budgeting power of your sales team, you won’t get much accomplished.
The point is, KPIs are important, but only if you know when, where, and how to apply them. These measurements should look very different at the individual level than they do by team, department, and the organization as a whole.
We all have goals that we’d like to hit at work, and then we have points we know we should be focused on but push aside in favor of more enjoyable or more easily measureable tasks. It’s critical to leave space for employees to establish their own set of KPIs, but it’s equally important to make sure they are held accountable for hitting them.
When setting personal KPIs it’s a good idea to think critically and sustainably. If your goal is to close five deals by the end of the month, you can’t expect to close those five deals on the last day of the month. Think about what smaller actions you can take now in order to build up this number over time, like increasing your amount of viable leads.
Team and Department KPIs
If your business is large enough to be broken out into teams and departments, each team should be responsible for carrying a specific amount of weight in order to achieve larger goals. You need every piece of the puzzle to complete the picture, and that means that individual departments should have their own set of KPIs.
For example, a solid set of KPIs for a sales department might look something like: closing ratio, customer acquisition costs as a percentage of sales value, and number of deals per salesperson. While KPIs like number of leads generated, brand credibility, website click-throughs, and cost per converted lead are better suited for a marketing department.
A business is only as strong as the sum of its parts, so as essential as individual and team KPIs are, you should also be measuring your success big-picture. As a company, your KPIs should not only reflect customer satisfaction but also employee satisfaction. They should be realistic goals that, with every department giving its all, can hit.
There are thousands of different KPIs you could potentially measure, but only a fraction of these will give you a clear picture of the performance of your employees and the satisfaction of your clients. Feedback from customers is a great place to start in formulating KPIs for retention and brand outreach. An employee survey can help determine areas within the company culture that need developing. Analyzing company performance over the last few quarters can easily reveal points in need of improvement across the board.
Focus your attention to the most meaningful KPIs for your industry in relation to your goals, and make sure that every person in your organization, from a sales trainee to the vice president of marketing, knows the importance of these measurements.