Performance indicators have been a talked-about component of every business since time began, but they’ve become a hot topic again recently. Here are some tips that cut through the noise and can help you develop, use, and maintain relevant KPIs.
1. Make sure the KPI is tied to the organizational value it’s trying to measure and define.
Many times, KPIs are not connected to core values, and when it’s implementation time, they can actually reinforce the opposite of what your core values are. Take the case of reduced returns: if your KPI is to reduce returned merchandise or refunds, and you make it more difficult for customers to do so, this could lead to a difficult and unpleasant return experience for your customer. Which in turn, would negatively impact your KPI of improved customer satisfaction.
2. Focus on leading indicators (proactive), not lagging ones (reactive).
Making sure you develop indicators that show you where you’re going, not just where you have been, is the toughest of all KPI work. Make sure you devote time to identifying relevant indicators that have a predictive nature to them so that you have KPIs that act as steering wheels rather than rearview mirrors. An example of a predictive indicator would be the current sales opportunity and qualified pipeline your sales teams have in place as an indicator of potential and realistic closings for business growth.
3. Make them relevant to those responsible for meeting or implementing them.
As a manager, you can’t meet all of the KPIs yourself – you need your team. Making sure they see and experience the relevance of what the KPIs are and how to use them will ensure full buy-in to the process.
4. Measure customer experience specifically.
It’s important to have KPIs measure customer experience specifically so that the company can predict, prevent and manage the potential negative customer experience(s). These KPIs would be like some of the ones below:
Can our customers easily connect with service/support?
Is it easy for our customers to do business with us?
Is the customer interaction simple and relevant?
KPIs are excellent tools by which you can focus your business to achieve better than average results, so take the time and energy to do them well.