Key performance indicators (KPIs) are the things that are vital for a business to get right day to day. KPIs usually fall into three main categories:
- Velocity – For a financial services firm and example of a velocity KPI would be turnaround time. The amount of time it takes a firm to complete a project from when the work comes in the door to when the work goes out the door. Dell uses turnaround time to measure the amount of time it takes once a customer places an order to when the order leaves Dell’s manufacturing facility.
- Financial – Innovative sales is an example of a financial KPI. For a service company it could be the amount of sales from services introduced within the last three years. For a product company like 3M it could be the amount of sales from products developed during the last three years.
- Customer – Customer loyalty and customer referrals are examples for customer based KPIs. Since it takes on average 4 to 11 times more to acquire a customer than it takes to keep a customer tracking customer retention is vital. Because word of mount is the most effective way to acquire the right kind of customers, referrals from existing customer are a leading indicator that the company’s current customers are delighted.
If you would like more information on how many and which KPIs you should develop for your business give us a call at our office at 405-759-2796.