What metrics are you tracking to determine your business’s level of success? There are so many more indicators than just your revenue! Key Performance Indicators (KPIs) help you identify where you’re progressing and where you may be encountering some challenges. KPI tracking is an essential tool for growing your business.
In today’s blog post, we’ll go over what key performance indicators are and how to choose which KPIs to track. Then, you’ll learn how to get started with KPI tracking! Let’s get started.
What Are Key Performance Indicators?
Key Performance Indicators are measurable values that show us how well our business is achieving its key business objectives. You can use KPIs in different settings and different levels depending on what information you need to track.
At a high level, KPIs give us an idea of the overall performance of the business. At lower levels, they can give us an in-depth look at specific processes.
When you decide to integrate KPI tracking into your business, it’s important to choose indicators that relate to your goals. What are your organizational objectives? How do you want to achieve them? What will you do with the information you find?
Developing your KPIs is a process. But it will help you get to know your business better.
You’ll figure out where (and how!) to devote your organizational energy. Identifying your KPIs means clarifying your core business objectives and tracking your progress.
Choosing KPIs to Track
You don’t need to track everything all at once! Some metrics simply won’t be valuable for your work. Others will be critical.
KPI tracking allows you to identify the metrics that relate to your strategic objectives.
Are you trying to create a better customer experience? What metrics allow you to measure that? Maybe you’ll want to track customer retention or survey results.
Do you want to focus on team development as you scale? How can you measure the ROI of your employees?
The key here is specific and measurable metrics that relate to your goals!
Each KPI needs to be related to one of your clear business objectives with measurable performance outcomes.
When you’re coming up with KPIs to track, ask yourself these questions:
- What is the desired outcome?
- Why is this outcome important?
- How will you measure progress?
- In what ways can you influence the outcome?
- How will you know when the outcome has been achieved?
Ways to Get Started With KPI Tracking
Once you’ve identified your KPIs, it’s time to figure out how best to track them. While your KPI tracking needs may vary, there are steps you can take to streamline the process.
Use Google Analytics to Start Tracking Data
Web analytics are the most commonly used tool for KPI tracking. Among those tools, Google Analytics is king!
It can track all kinds of different metrics, from sales to website performance. It gives you a lot of hard data to process. This can be super useful when you’ve established clear KPIs.
Especially if your metrics are less tangible to track, Google Analytics can help you zero in on measurement methods to narrow its scope.
Where Google Data Studio shines is in its presentation of data! It connects seamlessly and it takes complex data and provides visualizations that will make it easier to recognize important insights. Instead of dense, raw data, you can create easy and interactive presentations.
Write Really Clear Objectives for your KPIs
Establishing really clear objectives for your KPIs is essential.
Each of your business objectives is critical to your organization’s success. That’s why each KPI you track should be tied to one of your key business objectives.
Stepping back to look at your finished KPIs should tell you a lot about your company’s business model. They should demonstrate a clear goal and strategic approach.
Tying your KPIs to business outcomes ensures that you’re working towards goals that will have a real impact on your organization. If your target KPI doesn’t address a business outcome, you will waste tracking resources that could have better directed.
Consistently Review Your KPIs
Set aside time regularly to review your KPIs. We’re talking monthly or even weekly here!
Tracking your progress against your KPI is important so you can identify how well you’re working towards your targets. It’s also important because it allows you to assess how effective a marker your KPI is in terms of your goals.
Sometimes the KPIs you develop aren’t successful. Sometimes, that’s because your objectives are unachievable. Other times, your KPIs don’t accurately reflect the goal they’re meant to measure progress on.
Regular check-ins allow you to assess your progress towards your goals and the quality of your KPIs!
Make Sure to Set Actionable KPI Tracking Goals
Having actionable KPI tracking goals allows you to more accurately measure your progress.
You want to develop clear short-term and long-term targets.
When you know what your long term timeline is, work backwards to identify milestones you need to hit. Those milestones become your short term targets!
When you are creating actionable KPIs, you need to go through these steps to set your business up for success:
- Review your business objectives
- Set KPI targets for both the short and long term
- Review your targets with your team
- Analyze your progress and make adjustments
This process will look unique for every business because your KPIs are tailored to your specific needs and goals.
The most important takeaway here is that you need to identify short-term steps. Those will help you achieve your long-term KPI targets!
Adjust and Evolve KPIs to Fit Your Business Needs
In order to keep your KPIs effective, you’re going to need to update them at some point.
Your business changes in a lot of ways over time.
For example, maybe you’ve launched a new product or service. If your KPIs are outdated, you’ll be working towards a target that isn’t reflective of your current strategic direction.
Reviewing your KPIs lets you fine-tune your process and ensure your indicators are showing you the correct information. They can also help you recognize when you need to change course.
KPI tracking allows you to measure your business’s success and make adjustments to stay on top. Remember that each of your Key Performance Indicators should be closely tied to your business objectives. Once you’re clear on what you’re measuring and why, you can use the data to continuously improve!
Do you want a system that helps you truly understand where to spend your time and money, marketing? You don’t have to worry about defining and tracking KPIs on your own. We’d love to help you work on your metrics and grow your business through data! Here’s how you can work with us.