KPI Types and KPI Examples You Will Find Usefulposted on 20-3-16-Mon 19:04
KPIs allow you to know the performance of your department or organization. Getting the best results from your KPI dashboard requires you to choose excellent KPIs. These indicators come in multiple types, and getting it wrong could render your assessment meaningless. However, today we bring to you key KPI types and KPI examples you may consider.
What Are The Different Types Of KPI?
KPIs come in multiple broad categories. Most categories relate to a particular objective; therefore, choose the one that fits your description.
- Leading and lagging indicators: these are time-based indicators. Leading indicators forecast the outcome of business activity. Lagging indicators, on the other side, focus on the past; it could be a success or a failure.
- Quantitative and qualitative indicators. Quantitative presents data in figures or numerical form. Qualitative presents data in a non-numerical form, mainly in the form of words.
- Input indicators show time, effort, and resources used in by a business to generate a particular outcome.
- Process indicators give a deep dive into the performance of the internal processes of a company.
- Output indicators reflect the outcome or results of the process activities
- Practical indicators demonstrate a connection between the different activities within a company.
- Directional indicators will tell the stakeholders of a company, whether the business is moving in the right direction.
- Actionable indicators show tell the organization whether it can do something to effect its change.
- Financial indicators are the most common and will usually tell the organization whether it is doing well financially.
The above are just but the broad categories of performance indicators that exist in the market. Now that you know them, a few examples can make your selection of indicators easy.
Examples of KPIs
There are many indicators to choose from when assessing the performance of your company. These are common examples of key performance indicators that exist. The indicators come in the form of metrics, namely financial, process, customer, and people metrics.
Your financial position comes first in your assessment. Financial metrics point you directly into the money matters of your company. Here are KPI examples you may find useful:
- Profit: Even as you pay attention, you can never overlook this metric because you manage to calculate it after every sale of the fiscal year. There are underlying calculations you need to do, such as net and gross margins of profit. The idea of this metric is to figure out the returns of your business after taking the necessary steps to improve your enterprise.
- Cost: A business only gets more profitable when it manages costs. This metric tells you whether the company is cost-effective. Moreover, you can find out the best ways to manage costs.
- Revenue against Target: In your line of business, you have a particular target set. The revenue versus target metric allows you to compare your achieved revenue against your targeted revenue. Laying these performances on a visual enables you to know the performance of your business or department.
- Sold Goods Cost: Every product costs a particular amount to develop. Pulling together these costs allows you to understand the markup of your product. A product markup is a percentage value gotten from the difference in the selling price of a product and the cost of production of the product. This KPI example allows you to calculate the profit margin of the product. Moreover, you understand what you can do to outshine your competition.
- Overall Day Sales: This KPI example shows you how efficient your business is in its accounts receivables. On the dashboard, divide the accounts receivable with overall credit sales. Multiply this result with preferred time frame of focus. These calculations give you the overall day sales number. A rise in this figure shows that your organization is not doing well. If the number reduces, then the organization is doing correctly sales wise.
- Purchases by Marketplace: An analysis of your territories, you can know whether you met sales objectives or not. The feedback for highly performing regions can help you make improvements to the lowly performing regions.
- Expenses in Line of Business (LOB) against set budget. This KPI example allows you to compare what you spent on business against what you planned to spend. The result allows you to understand where slips were allowing you to create better future budgets.
The financial aspect of your business relies highly on your internal processes. Process metrics will tell you whether your production process is excellent. These KPI examples should help:
- Defective Products Percentage: Not every product produced will reach the market in its state of production. This KPI example allows you to know the defective products and figure out a way to reduce the losses related to their damage. On your dashboard, this percentage includes the defective products divided by goods produced by a hundred percent. The result needs to lower every time you do calculate this metric.
- Customer Support Tickets: You can retain your old customers and retain new customers by improving customer service. This KPI example allows you to assess incoming tickets, handled tickets, and time spent on resolving customer issues.
- Efficiency Measure: In the nature of your business, there is an admired efficiency measure. If you are in the processing business, your KPI needs to tell you the hourly units produced. Moreover, the percentage of time the plant remained up and running.
It is important your customers. Several metrics can help with that by allowing you to pay attention underlying parameters in acquiring and retaining customers.
- Churn Rate of Customers: Tracking the volume of your customers allows you to know the success of your business. This KPI example allows you to know the percentages of return customers. Moreover, the percentage of customers that discontinued their service. On your KPI display, you can arrive at this value by dividing lost customers at a given time with customers available at the start.
- Channel Contact Volume: You need to know the most preferred means of contact used by your customer. Moreover, the overall number of monthly support requests made by customers.
- Customer Satisfaction: This KPI example enables you to understand the things that make your customers satisfied. Be consistent in your questions because you need to use the same metrics under this indicator to know what has improved and what needs to be worked on. On your dashboard, find the percentage of "delighted customers" over all the respondents in your customer survey.
- Repeat versus New Visits: Companies can use this KPI example to know whether there is an improvement in the number of people that visit the company website. On the dashboard, the percentage will be new visitors over the total web visits.
As you assess the performance of the company, another aspect that cannot be left out is the employees. KPI examples under this category include:
- Employee Satisfaction: You need to know whether your employees are job satisfied. You will collect data using surveys and do a data analysis. Employee satisfaction can reflect the performance of a company in a significant way.
- Employee Turnover Rates (ETR): Employees can leave the business for multiple reasons. ETR, as a KPI example, allows you to identify the number of people that have left the company. You will start with the employees that depart the company and divide it with the number of people in the company. Further, you can find a percentage. A decrease in ETR every time you do the calculation is a good sign.
- Response to Open Positions: A higher percentage in people responding to your job adverts shows that you have good exposure of job maximizations to prospective employees.
The list of examples of KPIs does not end here. Remember that KPIs are designed for multiple purposes considering different stakeholders within the company. KPIs can boost the performance of your quality assurance department, your top management, your marketing department, and sales departments. Below are more demonstrations:
KPIs for Quality Assurance
Under process indicators, there are quality indicators responsible for showing the quality of products and services in a company. Quality indicators will allow your business to improve the quality of services, make better and quicker decisions, carry out planning, and use resources wisely. Examples of quality assurance KPIs you may find useful include:
- Efficiency Indicators: This indicator allows you to define the quantity of resources required for production. Moreover, the efficient indicator allows you to find out your rate of wastage of resources. Watching your wastage rates and making amends can turbocharge your productivity. Amends, in this case, could be items such as budget reviews and scheduling of deliveries. You can arrive at your quality by subscribing to production management software. Parameters of this software include items such as the delivery time, modules for the purchase of raw material, and expenses.
- Impact Indicators: The best person to tell you whether you offer quality is your customer. An impact indicator should tell you whether product and service quality levels gratify the customer. To arrive at the results, you need to go back to your customers and know what they feel about your product. For instance, if you are in a fruit drink business and focusing on single or a handful type of fruits, the customer may suggest other variants. From customers, you get both qualitative and quantitative data you may find easy to implement.
- Customer Service Indicators: This KPI example points you directly to what your customers feel about your product. The primary item, your business needs to pay attention to are the customer complaints. To arrive at this KPI, watch out for after-sales service. This means that you need to worry about the client even when they have acquired service or a product from you. You can follow up with an email or a call to know what they feel about a product. Your idea is to make sure that even when the product is good, that you offer quality after-service experience to your customers.
- Safety Indicator: This KPI example allow you to know the influence your product poses on the wellbeing of your clients. You need to watch for this aspect before you release the product to the market. Have a safety checklist and counter-check whether your product or service adheres to industry safety standards and certification requirements.
KPIs for Top Management
Even as we focus on the multiple things that can make your business succeed, it is always wise to consider the leadership of your organization. To keep track of leadership in your organization, some leadership KPIs can help with that.
- Accountability Reflection Weekly: As a leader, do not overlook the importance of self-evaluation. Just as you assess other items in your organization, pay attention to your performance as well more frequently. The best way is to journal what you do every day and evaluate it at the end of the week. As a business leader, you may make impulsive throughout the week and may not have the time to make amends. A weekly assessment allows you to avoid repeating the same mistakes. Besides, you avoid piling up the misdoings for a month, a quarterly or more.
- Keep Smart, Think Time Weekly: The above metric allows you to learn for your team and improve leadership so that it benefits your organization. However, the learning does not stop there, and you need to learn for yourself as well. Things you need to learn for yourself include being a strategic thinker and visionary leader. Achieving smart thinking and idea generation is gradual. Taking time to learn new things each week can quicken things for you.
- Particular Performance Metrics: As you learn on becoming a better leader, you need to keep track of whether you are growing. You can arrive at the result of this KPI example using a Personal Path of Progress tool. This tool will have the leadership capabilities you wish to improve moreover job performance capabilities you need to improve. You could turn the skills you wish to develop into KPIs and work on building them.
KPIs for Marketing
Part of good business is in anticipating the needs of your customers and gratifying those needs through your products. This success is achievable through excellent marketing. As you put these efforts, you need to keep track of your marketing activities. Several KPI examples can be helpful, below are a number:
- Sales Revenue: You need to understand whether your marketing efforts bore were fruitful; the first place to start is with the much it brings to your enterprise. There are two types of marketing namely inbound and outbound marketing. Your first step is to understand the difference of the two types of marketing. On your KPI dashboard, you will do a division of the overall sales in that fiscal year, and revenue of customers acquired using outbound marketing efforts.
- Costs per Lead: The KPI example focused on inbound marketing; however, it is important to focus on outbound marketing. This KPI example allows you to understand cost of acquiring a new customer using outbound marketing. To arrive at acquisition expenses, integrate platforms for Customer Relations Management. Moreover, pay attention to costs related to Enterprise Resource Planning integration. On your dashboard, to arrive at costs in acquiring leads through inbound marketing focus on creatives and technical workforce, overhead, and technology expenses. For outbound marketing, focus on sales and marketing workforce, the distribution of your marketing and advertising. All you can do is keep improving the marketing type you prefer.
- Traffic versus Lead: If your company has a website, this KPI example enables you to understand your web traffic. Moreover, you get to know the source of your traffic. Some sources you may need to pay attention to include direct visits, social media, referrals, and even organic visits. You can also know whether there is an increase in your traffic. The traffic to lead ratio needs to increase, the opposite could mean something is wrong with your website. One key improvement area might be the optimization of your conversion rates. Recommendations may include a change in items such as web form, the design, choice of multimedia, and content.
- Lead to Customer Ratio: Good marketing should generate leads, however, it is not the end, the leads generated need to convert to customers. This role is played by your sales team. This KPI allows you to arrive at the leads your sales team converts to sales. Your attention should be on the two types of conversion rates, namely sales qualified and sales accepted rates. Sales qualified leads are those where the customer intentionally want to buy a product. The customer tends to contact the salesman to inquire about the product before a purchase. Sales accepted leads refer to where the sales team considered a lead as a potential buyer and contacted them to carry out a purchase.
- Landing page conversion: Once you have put up a landing page, you need to be sure that it is converting. A landing page needs to generate leads for you no matter how good it looks to you. The landing page conversion rate KPI helps you get more conversions. Some of the key improvement recommendations you may get from your KPI dashboard may include changes to CTA color, text, the persuasiveness of text, the length of the page, or the inclusion of social proof.
KPIs for Sales
As you pay attention to quality, leadership, and marketing, the end game is sales. You may feel that sales are an apparent item and that you will have all the information you need. There are underlying items under sales that you need to keep track of, and you could use the following KPI examples to guide you through that:
- The funnel flow: This KPI pays attention to whether you a flawless sales funnel. The plan is to pay attention to items such as the leads, which is the number of people entering your sales funnel. You also need to measure response time, which is the promptness to respond to leads by the sales team. Other items include things such as content use and qualified leads (customers intentionally wanting to purchase a product)
- Closing rates: A lead is not enough for your business unless it is a converted sale. This KPI allows you to know the leads that end up in your sales funnel and even purchase a product or a service. If the numbers are not impressive, you may want to do something to lead to sales.
- Churn rate: This KPI is more important when managing your sales staff. You will find this indicator example more useful when the business is a subscription type. The plan is to get the answer to whether your business attracts more customers than it loses.
- Year to date growth sales: Sometimes the performances can be good until the business forgets to keep track of past performances. A year to date (YTD) KPI allows you to know whether your company is on the right track. Moreover, some techniques may have benefited your business in the past. You could reuse some things and make things work for you.
- Prospecting activity: It is always good to keep track of the amount of effort, resources, and time you spend generating leads. This KPI example allows you to track meetings, calls, and emails. This KPI is a host of multiple metrics related to your effort. Moreover, this KPI alone can help you improve leadership, manufacture, technology, and customer support, among other items, to match sales.
In a nutshell
Choosing the best way to analyze your company is important. A good indicator could easily point you to the solution to a particular issue that impedes the performance of your company. Above you will find some of the broad KPI categories as well as the KPI examples you may consider in your performance analysis. The list is endless, and the above examples should give you a quick start into your evaluation. Moreover, ensure that your choice of KPI aligns with your business. Surely, having KPI for your business is a surefire way to hit your targets.