Do you know what they are and the importance of performance indicators in the business management process?
Key Performance Indicator (KPI), or Key Performance Indicator, are quantitative parameters that serve as a thermometer to measure and manage the performance of the company’s internal actions. They allow evaluating the effectiveness of the strategies adopted and the individual and collective performance of the team.
With KPIs, managers can understand how each of the numbers is doing and set plausible and achievable goals to achieve the company’s operational and strategic objectives, promoting continuous improvement. It is through them that the company is able to identify opportunities to become more efficient.
In addition, organizations that strategically monitor and analyze KPIs are able to strengthen themselves in the market in which they operate, becoming more competitive. Research shows that
companies from different segments are increasingly dedicated to data management.
How are the Performance Indicators divided?
The possibilities for analyzing KPIs are numerous. Therefore, it is essential that the company has in mind which are the most important indicators for its business. Below are some of the main categories:
- Productivity indicators
They evaluate the performance and efficiency of processes in companies, that is, they act to measure the amount of resources that a company uses to generate a certain product and/or service.
- Quality Indicators
They follow along with the productivity indicators, as they help in the analysis of any unforeseen or error that occurred during a production process. A well-known example of quality indicators is the customer satisfaction index.
- Capacity indicators
They analyze the responsiveness of a process through the relationship between the outputs produced per unit of time.
Total calls per day;
Total meetings per salesperson;
Total submission of proposals;
Number of visits per seller.
- Strategic indicators
Strategic KPIs provide information on how the enterprise is doing in relation to the goals set for a given period of time. They provide a comparison between the current scenario of the company and the expected.
Average sales cycle
How to define my company’s KPIs?
The choice of the most important metrics will depend on the market in which the company is inserted, the moment of the business, and the way in which it decides to position itself. It is also interesting to carry out a benchmark to understand what businesses with the same characteristics (size, area of activity, profile, etc.) have analyzed and optimized within these key metrics.
5 performance indicators that every company should monitor
There are some KPIs that are often relevant for all types of business. You can start with them and then define others that make more sense for your company to achieve an increasingly satisfactory performance. Here are five examples of them:
- Conversion rate
It is a metric used to measure how many people have moved from one stage of the sales funnel to another, whether visitors who turn into leads or leads who become customers. To calculate, just divide, for example, the amount of sales by the amount of leads and multiply the result by 100. The percentage obtained will represent your conversion rate.
It is the sum of all the money that enters the company’s cash from its activity during a specific period, and is used to measure the financial health of your business and the performance of the commercial area.
Return on Investment shows how profitable was the application of financial resources in an investment. This is one of the most important financial indicators. Its objective is to direct resources towards actions or strategies that generate more results.
- Number of complaints
This quality indicator serves to measure the level of consumer dissatisfaction with your brand, product or service. It shows how many complaints your company has received in a given period of time. If you want to achieve excellence in your service, this indicator should be as low as possible.
- NPS customer satisfaction rate
Also among the main performance indicators of a company, we cannot fail to mention the satisfaction of NPS customers. The Net Promoter Score index shows how recommendable your company is.
To calculate NPS, you need to survey customers and segment them into Promoters, Detractors, and Neutrals according to how likely they are to recommend your business to a friend or family member.
What is the best way to visualize a performance indicator?
“Loose numbers can lead to empty conclusions. For your team to be able to really monitor the quality of internal processes, it is interesting to work with strategic performance dashboards. This is the basis of business intelligence (or Business Intelligence)”, says the managing partner of T4i Solutions, Thiago Fragoso.
To learn how to start measuring your indicators with assertiveness, read the 5 steps to implement the Data Driven Culture in your company.
Phone: (81) 3267-3199
Address: Rua São Vicente, 150 Tamarineira, Recife/PE