KPI’s or Key Performance Indicators, may sound like big-business jargon, but in reality they provide a handy tool for tracking the success of all businesses – including yours.
Key Performance Indicators are quantifiable measurements used to focus attention on the metrics most important to meet business goals. They are also useful in helping to understand how progress will be tracked and measured.
As a golden rule, KPI’s should always be:
- Measurable – make sure there’s a number or quantity in there!
- Achievable – don’t set yourself up for a failure, make sure what you’re aiming for is realistic
- Practical & Provides Direction – KPI’s should always reflect overall business goals.
Now that you understand what KPI’s should be, you’re ready to set them! In order to make sure they are of use to your business though, use the SMART framework to set them up. For exmaple, imagine your overall goal is to “Increase Sales”. When setting this as a KPI, consider
- Specific Enough? (e.g. “Increase sales on the website”)
- Measurable? (e.g. “Increase sales on the website, by 1800%”)
- Attainable? (e.g. “Increase sales on the website, by 40%)
- Relevant? (e.g. you’ve already got a website, right?)
- Timed? (e.g. “Increase sales on the website, by 40%, over the next 12 months”)
So there you have it! The abstract goal of “Increase Sales” has become a far more details KPI: “Increase Sales on the Website, by 40%, over the next 12 months”
Ensure you evaluate both KPI results and the KPI’s themselves on a regular basis, and respond to the data accordingly. Adjustements to KPI’s may be required.
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