Ann Marie Puig explains how businesses can measure KPIs and why they’re important
Date : March 31, 2022 By
KPIs (Key Performance Indicators) are crucial indicators when evaluating the development of a sales force, content production, visits to a blog, eCommerce, feedback from our customers and even human resources. Ann Marie Puig, a business improvement specialist and entrepreneur from Costa Rica, offers insight into why they’re so important.
Metrics are the map your company requires to travel from point A in order to reach point B. It is essential to conceptualize what the key metrics are. Ideally, a few, but that gives a clear picture of the case you are trying to understand. Once you measure metrics over time, you can get the trip tape and the causes why you find yourself in today’s situation are much more understood
KPIs indicate sales growth. Knowing the evolution over time of the sales generated is a fundamental indicator that should not be overestimated. A good sale should not skew us, because large periods of low or no profits are a strong sign that the strategy used is not correct and adjustments must be made. This KPI will strengthen the efforts of the sales team and remember that many times the problem is not the work team, but how we are carrying out our process, are we focusing on our customers or simply on selling a product no matter to whom or how?
Whether thanks to sponsored campaigns or the development of an Inbound Marketing strategy, focused on the organic arrival of prospects, we must not forget that the quantity and quality of leads are one of the most important KPIs for the success of companies.
Being clear about how much is the percentage and amount of money that is obtained after discounting the entire cost of production of our products or services is vital for a company to grow and establish itself over time. Explains Puig, “It is easy to underestimate this value, because large numbers sometimes hide a great truth: profits are too few or margins are scarce. You have to know if you are valuing your products correctly or if the production process be optimized.”
If you own an eCommerce business, you shouldn’t forget the Customer Acquisition Cost (CAC). By dividing the total cost of acquisition by the number of consumers in a given period of time, you’ll get this important metric that puts us down to earth when looking at our finances. A lot of effort and little return? Of course, it will be necessary to evaluate the CAC of each action separately, to discover those that work better than others.
Many of our prospects come straight to pages specially designed to capture their data or achieve a purchase. This KPI for business success, Landing Page Conversions, aims at the analysis and optimization of the landing page, seeking to implement changes that increase their conversion.
In the case of the human resources department, KPIs are metrics that are used to see how the department is contributing to the rest of the organization and measure its success in the company’s overall strategy. Adds Puig, “Some metrics allow to ensure that the main functions of the department are covered, such as having a qualified staff, managing the administration of personnel, developing human talent, promoting good labor relations, developing new social service functions, etc.”
This indicator refers to the time spent by the same employee in the same position. There are situations in which one of the best employees of the company leaves because he feels stagnant and decides to look for new opportunities in the labor market.
If you want to know how to calculate the time it can take a worker to ascend to a position of a higher category, you have to add the number of months that each employee has been with the same position and divide the result by the total number of workers. The number we get will help us know when it’s time to promote an employee or not.