As a business owner, you likely have heard of key performance indicators (KPIs). But what are they exactly? KPIs are quantifiable measures that evaluate the success of your business relative to specific objectives. In other words, KPIs tell you whether you’re on track to reach your goals.
You could track countless KPIs, but not all of them will be relevant to your business or helpful in achieving your objectives. That’s why it’s important to choose KPIs wisely. The best KPIs are specific, measurable, attainable, relevant, and time-bound—in other words, they meet the criteria of the SMART goal-setting framework.
Not sure which KPIs to track? Here are a few examples:
* Sales targets: This could be the number of new customers acquired, total revenue generated, or total number of sales made.
* Website traffic: Track the number of unique visitors to your website or blog each month. You can also measure how much time visitors spend on each page and what percentage of them leave your site after viewing only one page (known as your “bounce rate”).
* Social media engagement: If social media is a key component of your marketing strategy, track metrics such as the number of likes, shares, and comments your posts receive.
* Email open and click-through rates: If you send out regular newsletters or promotional emails, pay attention to how many people open them and click on the links within them.
Once you’ve identified which KPIs you want to track, it’s time to put them into action so you can start achieving results. Here’s how:
How to Use KPIs to Achieve Your Business Goals
Once you’ve identified which KPIs you want to track, it’s time to put them into action so you can start achieving results. Here’s how:
- Set realistic targets. Trying to achieve an unrealistic KPI is not only discouraging—it’s also a waste of time and resources. When setting targets, be sure to consider your company’s size, industry, location, and other factors that could impact your results.
- Track progress over time. You can’t improve what you don’t measure. By tracking your KPIs on a regular basis—weekly, monthly, quarterly, etc.—you’ll be able to identify patterns and trends that can help you make better strategic decisions for your business.
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Take action based on your findings. Once you have a good understanding of how well (or poorly) your business is performing against specific KPIs, it’s time to take actionable steps to improve results. This could involve anything from reallocating resources to making changes to your products or services. - Rinse and repeat. The most successful businesses are always looking for ways to improve—and that means continuously tracking KPIs and making adjustments as needed.
