What gets measured gets managed (and improved).
KPI stands for Key Performance Indicator. You’ll hear this term a lot in the startup ecosystem. It refers to a quantifiable metric you track over time in order to make smarter business decisions. By that I mean, these are metrics you are looking at week over week (or monthly, quarterly) in order to gauge whether you are making meaningful progress in your business.
What should you measure
What you measure will vary by business. Most companies will track revenue, profit, and loss while others may track the number of times they received a testimonial from a customer.
I would start with your high-level business goals. For example, if you want to boost your revenue – something you may want to measure are # of leads in your sales pipeline.
What’s key to note here is that you are tracking a number. And the improvement of this number will get support your progress towards achieving the higher-level business goal.
By tracking metrics with a long-term view of how they trend and change over time, you’re able to really hone in on those activities that consistently deliver results.
Now, you can see how your numbers fluctuate based on the new initiatives that you’re trying out. As an example, I’ve been trying to determine whether or not to use an automated sales CRM. To determine whether or not the tool is worth its salt, I’m now tracking the number of discovery calls booked proposals sent, and closed deals. If these numbers trend upwards over time, then I’ll keep the service.
How to track your KPIs
You want to set up an excel sheet to track your KPIs. if you’d like a template – I’m happy to share one with you. Just send me an email at email@example.com.
In my business, I keep a log of these metrics. I track these weekly. Each week, along with logging these numbers, I’l also conduct an analysis of each number and why/how they changed. Based on the analysis, and overall business goals, I set my priorities at the top of each week.
It’s also important to include your team in this process.
If you haven’t already, I highly recommend the book Traction. Within Traction, the author outlines EOS system, within which, are the Level 10 meetings.
During Level 10 meetings, there’s an IDS section: Identify Discuss Solve. I love to use this time to call out low-trending numbers. during this time, we’ll Identify the issue, discuss ways to solve it, and then settle on a solution – to be completed in one-weeks time.
With this system, you are consistently tracking your numbers, improving your numbers, and running fast toward your biz goals.
Was this helpful? I go into this and more during the Live Q&A sessions within my Professionalize Your Biz Course. You can check it out here.