The best way for successful businesses to stay at the top of their industries is to define and track their Key Performance Indicators (KPIs). Growing businesses can also use KPIs to understand how they can improve their operations and procedures, thus allowing them to grow even more.
In short, understanding how KPIs affect your company really is a key to business success. Even if you have an amazing product or service, a stellar business plan and a whole lot of talented individuals who can help you reach the top, it will all be for naught if you don’t define what success means to you, track your progress and learn how to improve from certain key metrics.
But which metrics are worth tracking?
The answer is hard to pin down to an exact science, and it relies heavily upon your understanding of your business and its goals. There is no one-size-fits-all list of metrics to track, but the following guide can help you narrow the list down to a manageable number of key metrics to follow.
Know Your KPIs
There certainly are a whole lot of metrics out there, and capturing them is the easy part. The hard part is knowing which metrics can help your business improve and which of them are just a bunch of meaningless data. The trick is to understand which metrics are important to you, and which should be ignored altogether.
Start with the end in mind. What is your vision? What are your business goals and objectives? Do you want more traffic going to your website? Do you want to generate more leads? Maybe your goal is to decrease the time it takes to accomplish certain tasks or to increase customer engagement.
Whatever you determine your goals to be, the metrics you track should directly relate to them. If you want more traffic coming to your website, track metrics that relate to your web analytics. If you are looking to generate leads, track the conversion rate metrics of your lead generation techniques, and if you want to save time, track the time it takes to complete tasks and see where you can optimize your processes.
Just Don’t Waste Your Own Time
We live in a world of data. Virtually everything in the world can be recorded and turned into some sort of a statistic, but that doesn’t mean you have to track and analyze every single piece of information available to you.
It might be tempting to overload your workers with any and all data that you collect, but a lot of it just won’t apply to your business goals. The metrics that you want to follow are those that will allow you to identify changes that need to made in your business. For small businesses, that’s probably just a handful.
Before bothering to record and analyze any metric, try asking yourself the following questions:
- Will knowing this information help my company make more money?
- Will analyzing this data help me to identify redundant processes and increase efficiency?
- Will understanding this metric help me make better decisions?
- Does this support my business plan, strategy and vision?
Make Smart Decisions
Whenever you make the decision to track a metric, it should be done because you have a specific goal in mind and never for the mere reason of you having the ability to track it. Key metrics exist to make your business better, not to create more work for you and your employees.