KPIs

KPIs (Key Performance Indicator)

KPIs are typically at top of mind for most business managers. You may think of these measurements by a different name (e.g. goals, targets) but KPI is a common term used. KPIs drive decision making, provide targets, and facilitate faster conversations regarding if you are or not going to make your goals.

Most companies have a vision, mission, and a tactical plan that supports attaining - and hopefully exceeding - annual objectives. KPIs are the measurable elements of the plan that defines in a measurable way what the company wants to achieve by when.

When defining a KPI, ask yourself the following

  • What is your desired business outcome?

  • How will you know you have achieved your outcome?

  • What is the timeframe?

  • How often to you want to assess/measure the KPI?

  • What means are you going to use to get the data that drives the KPI measurement?

KPI examples

Sales

Increase new product bookings 20% YOY

  • What is your desire outcome? Increase sales by 20% YOY of the online course CosmosDB Basics

  • How will you know you have achieved your outcome? By analyzing Sales information found in our CRM product

  • What is the timeframe? 12 month duration ending at the last day of 2022

  • How often to you want to assess/measure the KPI? Will report on results monthly including comparing performance against previous year's month

  • What means are you going to use to get the data that drives the KPI measurement? Will export all opportunities/booking of type "Product" with a status of CLOSED WON and compare to same information from previous year.

Customer Retention

Customer renewals of 96%

  • What is your desire outcome? 96% of existing customers renew their annual contract during 2022

  • How will you know you have achieved your outcome? By analyzing renewal information found in our CRM product

  • What is the timeframe? 12 month duration ending at the last day of 2022

  • How often to you want to assess/measure the KPI? Will report on results Quarterly including comparing performance against previous year's quarter

  • What means are you going to use to get the data that drives the KPI measurement? Will export all opportunities of type "Annual Contract" with a status of CLOSED WON and then compare that total value to to the total value of all active renewals as of the end of the previous year.

Additional categories for KPIs include Operations (e.g. order fulfillment time), Marketing (e.g. number of qualified leads) and other key business organizations. You and your organization/department owners should work together to review, define, and reach agreement on your KPIs and refer to them often during the course of operating your business.