Ignore the Advice of Articles that Suggest Certain KPIs, as every Organisation’s most Important Metrics will be Different
In the absence of Key Performance Indicators (KPIs), how do you know if your business is on the right track for success? Some organisations will simply look at bottom-line sales for proof of profitability, but conversions alone won’t provide insight into which areas are working well or require improvement.
This is where KPIs come into play. Essentially, they are the most important quantifiable metrics that show you whether the business is achieving its financial goals and long-term objectives according to current performance.
It sounds rather obvious, but the words ‘key’ and ‘performance’ are critical here, as not all the metrics you measure will be important. In fact, if you look online for recommendations of KPIs, you will probably be given a lot of false information, as the majority are useless to your cause.
For this reason, you need to take a step back and ask yourself “What KPIs will actually boost business growth?”
How to Choose the Right KPIs for your Business
Seeing as every business is unique, you can’t rely on a guide to tell you what you should or shouldn’t be measuring. However, there are things you can take into consideration when attempting to choose the right KPIs for your business.
Less is more
With Ruler Analytics or any other analytics software, you can measure an abundance of different, yet equally detailed metrics such as hits, clicks, and conversions. But in spite of this profusion of choice, think about how many you definitely need.
Less is more when it comes to KPIs. If you try to track too many KPIs all at once, you can end up counteracting your performance efforts. Therefore, you should avoid tracking more than 10 KPIs at a time.
Take into Account the Size of your Company
Regardless of whether you are an established business with countless clients or a new start-up trying to attract consumer interest, it is essential that you make allowances for the size of your business when deciding what metrics to track.
If your product or service isn’t market fit, then it would be fairly useless measuring cost per acquisition, as there wouldn’t be much to quantify. On the other hand, it would make sense to monitor your awareness, such as how visitors are finding your business.
Here are two examples based on SAAS (Software as a service), both of which are at different stages in terms of size.
Early stage start-ups:
- Amount of unique visitors
- Customer feedback
Established businesses looking to scale and expand:
- Lifetime value
- Cost per acquisition
- Monthly revenue
Every Business is Different
Whereas a product fit Saas company will want to measure the amount of sign-ups or retention of users, a professional law firm is bound to be more interested in monthly recurring revenue and referrals.
Don’t forget that your KPIs need to be relevant to your business and its own unique goals. Think carefully about what metrics are most important for sustainable success and choose your KPIs accordingly.
Remember, Ruler Analytics can help you track anything from conversions and phone calls to individual customers. To find out how your business can track KPIs with the help of Ruler Analytics, take advantage of our free 30-day trial.
What have we learnt?
KPIs are essential in order to understand whether you are on track to meet your objectives. However, this doesn’t mean to say the metrics you decide to monitor should be the same as other businesses.
Pick KPIs that are relevant to you and the size of your business. Also, less is more when it comes to choosing KPIs, as certain metrics will be inconsequential to prolonged prosperity.