KPIs – key performance indicators – are the standards that companies use to evaluate performance against established goals and objectives. They also can be applied when judging how well a prospective employee will do in a job.
In a recruitment scenario, candidates are typically asked what KPIs they have worked toward and how well they have succeeded. For instance, the manager of an e-commerce business may have KPIs that include increasing website traffic by 20 percent over 12 months, building conversion rates by 5 percent, or decreasing customer service calls by 30 percent over six months. A marketing executive may be judged on ROI, which measures how much revenue a campaign generates compared to related costs.
The Value of KPIs
KPIs change with business needs, but the key principles behind them remain the same. By measuring something, it is possible to establish whether or not you are on target to meet a goal.
- Financial KPIs tend to be easier to measure because they are numeric. They also may be less quantitative; for instance, a key indicator may be employee satisfaction. A defined method for measurement, especially regarding qualitative KPIs, needs to be established up front in order for the process to be effective.
Whether you are a business leader or a professional seeking new career opportunities, here are some examples of KPIs to monitor on a regular basis:
Sales revenue: No company wants to spend money on something that is not generating income. You need to demonstrate a strong understanding of both inbound and outbound marketing strategy. Calculate sales revenue by starting with total annual sales and then subtracting total revenue from customers acquired via inbound marketing.
Cost per lead: Calculate how much it has cost you to acquire a customer through inbound versus outbound marketing. Integrate your CRM platforms as well as accounting for all costs associated with ERP.
Customer value: Have you reached out to your current customers to measure business value? This can help you keep in touch with leads, as well as reduce churn and keep customer satisfaction levels high.
Inbound marketing ROI: Assessing your inbound marketing ROI helps gauge performance on a regular basis. It enables you to accurately develop planning strategies and budgets going forward.
Traffic-to-lead ratio: Understand your website traffic and whether it is organic, direct or referral driven. If your traffic is steady or increasing, but your traffic-to-lead ratio is declining, this is a sign that something is missing on page. Track this number to determine what changes in text or design may be warranted.
Lead-to-customer ratio: It is critical to know how many leads your sales team is able to close. Calculate both qualified and accepted lead conversion rates. Qualified leads are those considered to be sales-ready based on their lead scores or other specific activities they have completed. Accepted leads are simply leads that are considered opportunities by your sales team. Team members may have contacted these leads directly or have scheduled a call.
Landing page conversion rates: A landing page that fails to generate leads is useless, no matter how much traffic it generates. Monitor your conversion rate. Like your traffic-to-lead ratio, if your landing page is getting a lot of traffic, but has a low conversion rate, this is a red flag to change something on the page.
Social media traffic: Metrics you can apply to show the impact of social media include number of lead conversions, number of customer conversions, and percentage of traffic generated through each channel.
Mobile traffic, leads and conversion rates: Measure mobile traffic, number of lead conversions from mobile devices and bounce rates.
Do you need to learn more about key performance indicators and how to best apply them in your business or job search strategy? Partner with the executive recruitment and talent development experts at BrainWorks for optimal results. Read our related posts or contact us today to learn more.