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Satya, the proprietor of a restaurant chain, made a product advertisement to improve its reach on social media platforms. He used two different KPIs to track the number of people the ad was visible to and the number of clicks it generated daily. The KPIs allowed him to track progress of his advertisement and improve the reach of the product to meet his objectives.
KPIs are Key Performance Indicators. They’re tools to measure performance that show whether an organization is meeting its goals. Key Performance Indicators examples can be used to define KPI as a quantifiable measurement. These show how effectively an organization or individual is achieving key performance objectives. KPIs are used at multiple levels in an organization to evaluate their strategic, operational and financial targets. (https://www.biolighttechnologies.com/) Business KPIs are used to evaluate effectiveness, track progress and improve decision making to help compete with other organizations of the same sector.
What Is A KPI?
KPIs should deal with a specific outcome and measure performance related to that outcome. Business KPI examples show that core business objectives are the key factor. Several KPI examples show that defining KPIs can be based on these questions:
- What is the desired business outcome?
- Who is responsible for this outcome?
- Why is this outcome important?
- How to know if you’ve achieved this outcome?
- How to influence the business outcome?
- How to measure progress?
- How often will progress be reviewed?
We can see from KPI examples that they help define critical business goals.
What Is A SMART KPI?
SMART stands for Specific, Measurable, Attainable, Relevant and Time-Bound. As we can see in SMART KPI examples, they all answer the following questions:
- Is the business objective specific?
- Is progress measurable?
- Is the target attainable?
- What is the relevance of the target for the organization?
- What is the timeframe to achieve the target?
The addition of Evaluate and Reevaluate came as an expansion. SMARTER KPIs are continually assessed. SMART KPI examples are a leap ahead as they keep assessing the KPI’s relevance to the business.
Writing A KPI
It’s important to understand how a KPI relates to a specific objective. As per Key Performance Indicators examples customized KPIs are better equipped to help an organization achieve its goals. Here are the steps to write a KPI:
- The most important part of developing KPIs is writing an objective in clear, concise language. SMART KPI examples have proven over time that effectiveness of a KPI depends on a clearly defined objective
- A KPI must be actionable for long- and short-term objectives
- It’s important to review the KPI frequently and periodically. Evaluation is a fundamental process behind a successful KPI
- KPIs must be communicated and shared with employees and shareholders. It gives a clear picture of the objective and its progress
- A KPI must have attainable targets. It’s essential to evaluate current performances to set realistic, achievable goals
It’s clear from KPI examples that even the most successful KPI has a shelf life. A KPI should be changed whenever it stops aligning with the organization’s business objectives.
Examples of KPIs
KPI can be used as an effective tool for success. A manager can learn about defining KPIs from business KPI examples to track and measure performance in key sectors.
1. Social Media KPI
It’s essential that social media managers track reach, engagement and conversion to revenue. A social media KPI evaluates an organization’s presence on a platform and how effective the market strategies are. Here are a few KPI examples for social media platforms:
- Reach
- Conversion rate from social
- Fans, subscribers or followers
- Response rate
- Impressions
- Clicks
- Share rate
- Revenue from social
2. Sales KPI
Sales teams and their leaders are concerned with closing the maximum number of orders. Sales KPIs track the performances of every sales activity of an organization. Here are a few KPI examples for sales:
- Sales target
- Average sales cycle time
- Lead-to-opportunity %
- Opportunity-to-order %
- Lead response time
- Lead conversion %
- Upsell %
- Cross-sell %
3. Project Management KPI
Project management KPIs focus on budget, quality and timeline. They allow project managers to meet deadlines and maintain quality without overspending. Here are a few business KPI examples for project managers:
- Planned value
- Budget iterations
- Customer complaints
- Number of errors
- Adjustments to schedule
- On-time completion %
A good KPI provides clear information and objectives towards a target. It’s effective in tracking and measuring an organization’s performance on various metrics. KPIs are great tools to optimize businesses for long-term success.
Discover Harappa’s First Time Manager Program. It’s designed to train managers to understand KPIs and implement them effectively. Develop project management skills, track progress and implement solutions. Learn how to write and use KPIs and become a high-potential asset for your organization. Schedule a demo today!
Explore Harappa Diaries to learn more about topics such as What Is A Business Strategy, various Business-Level Strategies , How to make a Business Plan and what are the steps involved in Business Planning Process that will help organizations tap into employee potential.
