The first step to being more successful is making sure you’re setting the right Key Performance Indicators (KPIs) for your business. In reality, that’s often easier said than done. Depending on the industry and stage your company is in (whether you’re in sales, marketing, or managing web development, design, or consulting projects), your KPIs may differ, but certain ones always hold value.
If you’re unsure which KPIs are right for your company, start with the basics. To help you out, here’s a list of some fundamental KPIs to help guide your business decisions and keep you on track:
Here are three examples of KPIs consultants often look to when it comes to their business:
Annual Revenue Growth
How much money are you bringing into your business? This is a critical KPI since it lets you know how quickly you’re growing (and let’s you anticipate future growth based on how you’re able to cover your costs).
Billable Utilization (or annual revenue per employee)
This isn’t always an obvious metric, but knowing how many hours consultants at your company are able to bill for lets you to know how productive your team is (and where certain changes might need to happen). What’s important to note here is this: it may not be about consultants on your team taking on more work, but rather, streamlining their workflows and processes to create more opportunities in which they can focus on client work (and generate more billable hours) - in effect, being more efficient.
This puts how much you budgeted for a project against how much you actually spent (in terms of time and company resources) to complete a project. This is important because anything that runs over budget eats away at your profit margin.
Being more efficient in your workflows and processes is an effective and relatively simple (with the right tools) way to nick this in the butt.
If you work in marketing, these three KPIs are usually important when it comes to measuring success:
What are you doing to generate leads every month? Lead generation is an integral part of business growth, but with every year that passes the marketing space becomes more saturated (making it harder to reach people effectively). That’s why email continues to be a channel that yields good results as it enables you to connect with people directly.
Having a platform that can easily send email campaigns to folks designated as “leads” in your system is ideal. Then you’d be able to create target lists, pull basic stats on who opened an email, who clicked, the amount that bounced, and so on - all from one place.
How many leads are converted into sales every month? In order to see the quality of the leads you’re passing off, it’s really helpful to be able to see and track the conversations account executives are having with these folks before they turn them into a sale opportunity. That way, you can get a better idea of who to target and how to target them (i.e. industries, company size, etc)
Customer relationships are at the heart of what you do. Increasing customer loyalty for your company or brand increases your customer lifetime value and gives you more room to experiment with acquisition (so that you can grow your business).
In order to increase customer loyalty, you need to build trust and communicate openly. Hopefully you’re already using a sales that lets you know who your best clients are (in terms of satisfaction, monthly recurring revenue, etc) so you can stay on top of those relationships.
Anyone who manages projects will tell you that these KPIs are critical when measuring success:
Projects that finish on time
Are your projects running longer than anticipated? How much have you deviated from the time schedule in your project plan? If you’re looking for something that can let you know when your projects are exceeding their scope in time, investing in a smart technology platform may be a good option.
Projects that finish on budget
When your projects finish on the budget you planned for, you don’t have to worry about additional expenses eating away at your margins. When projects do exceed their scope in money, measuring why and by how much they deviated from the original budget is extremely valuable in figuring out how to streamline your processes.
How much time are you investing in your projects and at what expense? How does this weigh against the revenue you’re bringing in? If your projects continue to exceed their scope, that’s bad for business. This KPI is especially important because the less profit you turn, the less you have to reinvest in growth. That’s why using a smart technology platform that can tell you when your projects are veering off course (and in time to do something about it) is so important.
Hopefully these KPIs make things a little easier for you. If you're interested in how other companies like yours successfully grew their business with the right KPIs and tools, check this out.