or lack of it. Being able to graphically represent them is also helpful since the results can be displayed for colleagues and staff to see at a glance. KPIs need to be directly linked to your goals and objectives. You will have to determine the ones most suitable to your business. Types of KPI's Suitable KPI’s may be: Total number of customers Total number of customers per department or market segment Average dollar spent Total revenue per capita Sales per product group Average sales per day’s trading Average total revenue per client Marketing expense per customer Marketing expense and sales revenue per customer from a specific campaign Total revenue / full time employee Gross profit margin. To be effective, KPI’s should flow directly from your business systems and be comparable to those used by others in your industry. Information on what is being measured by others in your industry should be available from your Industry Association. You may need to reciprocate, by supplying your own figures into the association. Often industry statistics are collected by an independent third party and used to produce averages and a range of performance, while protecting the identity of individual respondents. The information gained from these comparisons can identify any problems, shortfalls or other anomalies within your business. Appropriate control procedures and systems need to be in in your business so that you can rely on the results. Simple computer programs can speedily analyse and generate business indicators automatically. Involving staff in the review process assists in their perceived ownership of the business’ performance and financial results. It can also be a forum for generating solutions for dealing with areas where the KPI’s indicate under performance. Need for specific KPI's A KPI must be specific for it to be a useful management tool. Examples of useful and effective KPIs include reference to:
or lack of it. Being able to graphically represent them is also helpful since the results can be displayed for colleagues and staff to see at a glance. KPIs need to be directly linked to your goals and objectives. You will have to determine the ones most suitable to your business. Types of KPI's Suitable KPI’s may be: Total number of customers Total number of customers per department or market segment Average dollar spent Total revenue per capita Sales per product group Average sales per day’s trading Average total revenue per client Marketing expense per customer Marketing expense and sales revenue per customer from a specific campaign Total revenue / full time employee Gross profit margin. To be effective, KPI’s should flow directly from your business systems and be comparable to those used by others in your industry. Information on what is being measured by others in your industry should be available from your Industry Association. You may need to reciprocate, by supplying your own figures into the association. Often industry statistics are collected by an independent third party and used to produce averages and a range of performance, while protecting the identity of individual respondents. The information gained from these comparisons can identify any problems, shortfalls or other anomalies within your business. Appropriate control procedures and systems need to be in in your business so that you can rely on the results. Simple computer programs can speedily analyse and generate business indicators automatically. Involving staff in the review process assists in their perceived ownership of the business’ performance and financial results. It can also be a forum for generating solutions for dealing with areas where the KPI’s indicate under performance. Need for specific KPI's A KPI must be specific for it to be a useful management tool. Examples of useful and effective KPIs include reference to: