Are you struggling to grow your business and achieve your strategic goals? It might be worthwhile for you to start optimizing some Key Performance Indicators (KPIs) to help your company grow.
In this article, find out how to identify the right performance indicators to track as well as some examples that might inspire you.
How to choose the right KPIs for your company
Each company has different performance objectives to achieve for growing their business. However, depending on their business sector, not all companies will have the same goals. KPIs should therefore be defined according to your business sector (e-commerce, human resources, management, marketing, etc.). Choosing the right KPIs to track will help you use the data collected to adapt your performance strategies and stimulate the growth of your business.
However, there are some more general KPIs that can be adapted to several business sectors. Here are a few examples.
Track customer opinions with the Net Promoter Score
The Net Promoter Score (NPS) is a score between 1 and 10 that your customers assign you to share their satisfaction and their opinion of your company. This KPI is worth tracking, since your customers don't have to invest much time to assign you the score, which increases the chances of a high participation rate. Moreover, if one of your customers gives you a score below your expectations, you can contact them to find out which points you can improve.
Measure churn to improve your services
Churn rate measures the number of customers lost (Number of customers lost / Total number of customers) during a given period. If you want to get a better understanding of why a customer abandons your products or services, you could ask them to do an exit interview. If they agree, this could help you identify areas for improving your services.
Calculate income per employee for a better view of your company's finances
This KPI, calculated by dividing the total income of the business by the number of full-time employees, is very useful for evaluating several aspects of your corporate taxation. If you find that the average income per employee is lower than the average salary of your full-time employees, you may want to determine why and adapt your business model based on your observations.
Improve sales by tracking conversion rate
Conversion rate is mainly used to analyze the marketing or sales performance of an online business. It is calculated by dividing the total number of sales by the number of leads, and then multiplying this figure by 100. If you realize that this percentage is below industry standards, you can make changes to your processes to achieve your sales targets.
Track customer lifetime value to adjust your pricing strategy
Customer lifetime value is a performance indicator that illustrates the average amount of money your customers pay you during the time they do business with your company. Tracking this KPI over the long term can help you identify increasing or decreasing trends in this rate. You can then adjust your pricing to optimize your bottom line based on these trends.
T2inc provides you with business tax and accounting advice
In conclusion, tracking the right key performance indicators according to your business sector can help you stimulate the growth of your business. Use the preceding examples as a guide in the development of different business strategies.
At T2inc, our tax accountants will help you with your company's accounting. We even offer accounting courses to business owners so that you can better control your finances. We invite you to contact us to find out more about our many services!