Thank you for subscribing!

It's great to feel loved.

KPI Tracking to Achieve More

Constant evaluation of operations is a must for growing and competitive businesses. KPI tracking is how they monitor and analyze their effectiveness and evaluate their advancement and improvement.

But, what is KPI tracking exactly, and why is it so important for companies and businesses? 

Here’s everything you need to know about it.

What Is KPI Tracking?

In order to know what KPI tracking is, you must first understand what KPIs are. This acronym stands for Key Performance Indicators that measure certain goals for businesses of all sizes and types. The information they provide is helpful for managers, employees, departments, customer support teams, and processes. 

It’s capturing data produced by a process that’s later used to produce KPIs which measure progress against certain objectives and goals that are displayed in easy-to-understand graphs and charts using KPI reports and KPI dashboards.

In other words, every business or company generates data in their daily operations, which is then used to support KPIs that measure performance against business’ strategic goals. The generated data is also used for everyday management of the company or business.

Why Is KPI Tracking Important?

KPIs provide details about different aspects of a company’s operations. Not only that KPI tracking involves collecting data, but it also includes placing these metrics in a broader context to show if they indicate a need to optimize certain areas of a company or business, or if they show a level of improvement. 

One of the KPI tracking goals is to measure the progress towards certain long-term objectives and goals with quantifiable milestones. That’s why it serves as a benchmark for improvement and evaluation.

Besides collecting and measuring data, tracking KPIs includes presenting this data in easily digestible dashboards and charts. This process helps businesses to see their progress and find out how to improve their operations.

KPI tracking provides valuable data to teams and gives them the power to constantly improve. It gives companies a clear direction and advantage over their competitors. It allows everyone involved within a business to concentrate on goals and on areas that need improvement by highlighting potential opportunities for improvement.

How to Use KPI Tracking?

KPI tracking is extremely important for any modern organization or business when it comes to properly fine-tuning and guiding it for success. The first thing to do is create a relevant KPI library that will effectively monitor the performance metrics of your organization or business. With clearly defined relevant KPIs, a few areas can be immediately improved by tracking them correctly. 

Sales is one of the most common use cases for key performance indicators. Here, progress towards goals and overall success is quantifiable. This, in turn, allows easier tracking in areas such as sales growth, sales as a function of converted leads, and monthly sales. 

Monitoring these KPI objectives ensure businesses and organizations know how their sales funnels function from lead to conversion, as well as how to improve them.

KPI monitoring is also beneficial for marketing. Key performance indicators clearly show the performance of certain strategies and campaigns. Common marketing KPIs are returning visitors, lead conversions, purchase funnels, and brand awareness.

Still, the KPIs an organization or business will track depend on the industry, business model, goals, and strategies. However, customer acquisition cost, customer lifetime value, and revenue growth rate are three baseline metrics that need to be tracked properly for the health of your company and your basic success.

Get SMART

Setting SMART goals means accomplishing a lot without much effort. It means clarifying your thought and ideas, focusing your efforts, using your resources and time productively, and raising your chances of achieving your goals.

The first time the acronym SMART was mentioned was in 1981 when the consultant George Duran published a paper with the following title: "There is a S.M.A.R.T. way to write management goals and objectives."

Here are five things to have in mind to ensure your KPIs will be successful:

  • S – Specific – have a clearly defined and identified KPI instead of a too broad one

E.g. I have a clear definition of new sales

  • M – Measurable – you should be able to easily quantify it 

E.g. This measure is easily calculated

  • A – Achievable – choose a measure that is realistic to obtain. You should be able to see changes when implementing this KPI and taking the appropriate measures.

E.g. I can easily get this from my accounting system

  • R – Realistic – choose a pragmatic and practical measure

E.g. It is pragmatic and practical to track.

  • T – Timely – see if you can get the data for this metric every week, month, or year.

E.g. I can get this every month.

Mike Bennet
Written By Mike Bennet
whatagraph
Beispiel für einen Key Performance Indicator (KPI)
KPI steht für Key Performance Indicator. Das bedeutet soviel wie die wesentlichen Leistungsanzeigen. In einem Unternehmen gibt es hunderte, ja wahrscheinlich tausende Prozesse.
whatagraph
How to Track Performance of Your Employees
Regardless of the shape and size of your business, poor management is a chronic issue that will affect you significantly. However, that doesn’t simply translate to the fact that employers do not want their jobs executed.
whatagraph
SMART Marketing Strategies - That Lead to Positive Results
As we all know marketing is an integral part of business development, which is why advertising expenses can easily spiral out of control. Unfortunately, not every marketing campaign is a success, in fact, its effectiveness can hardly be measured in many cases.
Zoom and GoToMeeting are two of the most popular and reliable video conferencing solutions today, so we’ve made Zoom vs GoToMeeting summary to compare them and see which of them fits your business needs best.
Read more...
Mike Bennet
Jun 02, 2020 6 min read
In this in-depth HubSpot vs Salesforce comparison, we’ll break down some of their key features to help you make the right decision.
Read more...
Wendy Gooseberry
Jun 01, 2020 5 min read
Both tools Monday and Asana are simple, convenient, and popular, but this comprehensive comparison can give you a better idea of which tool can bring you more value for the money.
Read more...
Wendy Gooseberry
Jun 01, 2020 7 min read