KPI Guide: Measure Business Success with Key Performance Indicators
1. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Key Performance
Indicators
Definition, Purpose, & Considerations
2. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
What are Key Performance Indicators
(KPIs)?
KPIs are a set of calculated values used to measure success. The data
gathered from those measurements helps give managers insight into
business performance and progress.
3. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
What’s the benefit to a business?
• KPIs offer an objective view of
business performance for
managers to review (instead of
relying on subjective reports or
perceptions of success).
• Measure success of programs
• Quickly link financial investment with
strategy
• Conduct performance reviews
• Monitor effects of operational
workflow adjustments
• Translate business goals into visible &
actionable metrics
Daily
Operations
Management
Strategic
Planning
Business Goal Business Goal
Executives,
owners, board
members
Managers
External
Operations
(customer
service, sales)
Internal
Operations
(manufacturing,
supply-chain)
Company
Operations
(accounting, HR)
4. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
How are they obtained/triggered?
• Relevant KPIs can be discovered
by observing any occurrence
where an action between a
responsible party and a
dependency intersects with a
company’s strategic goal
Goal
Dependency
Responsible
Party
5. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Example
• Company Goal: Measure
frequency of orders in excess of
$700 in Orange County each
month
• Responsible Party: Sales rep
• Dependency: Customer
• Action: Sales rep makes a sale
that totals $833 to a customer
located in Costa Mesa.
Company Metric
Order >$700 in
Orange County
CustomerSales Rep
Dateofsale
KPI
6. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Considerations for developing KPIs
Data Capital
What data is required to
make measurements?
Does the data and data
structure exist in a way that
supports measurement?
How will new data be
acquired and documented?
Technology Capital
What applications and tools
are in place (CRM, CMS, BI
Tools, etc…)
Is the current technology
sufficient to store and
manipulate data?
Is new development required
to enable measurement or
progress? If so, does the ROI
make sense?
Intellectual Capital
How can the skills of business
employees affect the
outcome of the results?
Should the actions of
customers or third parties be
considered?
How much additional time, if
any, should be spent
developing new processes,
training, reporting, etc…?
Defined Business Goal
7. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Considerations for developing KPIs
Defined Business Goal
What’s measured? How is it measured? Who’s responsible?
8. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
KPI Analysis in the Business Process
Define Business
Goal
Strategy Planning
& KPI Selection
Strategy
Implementation
Measurement,
Evaluation, and
Strategy
Adjustment
9. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Best practice for defining relevant KPIs
• Suitable for the business
• Allows for chronological comparison (measure of progress over time)
• Must have responsible party
• S.M.A.R.T.
• Specific
• Measureable
• Attainable
• Relevant
• Time-bound
10. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Three steps to measure
Once a relevant goal and KPI have been selected,
1. Develop a baseline
2. Record statistically adequate amount of relevant data
3. Compare results with baseline
11. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Common KPIs for eCommerce
• Weekly, monthly, quarterly,
annual sales
• Conversion rate
• Shopping cart abandonment
rate
• New vs. returning customers
• Number and average rating of
product reviews
• Product affinity (what’s
purchased together)
• Average margin
• Average order value
• Customer acquisition cost
12. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Common KPIs for Web Marketing
• Site traffic
• Unique vs. returning visitors
• Time spent on site
• Page views per visit
• Traffic source
• Geographic location
• Bounce rates
• Newsletter subscribers
• Social metrics
• New followers, fans, shares, likes
• Paid search traffic volume
• Caller source & volume (paid vs.
organic)
13. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Common KPIs for LeadGen Sites
• ROI
• (Attributable Revenue – Campaign
Investment) / (Campaign Investment)
• % Revenue from SEM
• Revenue from SEM campaigns /
overall revenue
• Email engagement score
• # of new leads / # of emails
• Social interactions
• # of social interactions / period of
time
• Traffic source volume
• # of visitors for each source
• Cost per lead
• Total cost of campaign / # of leads
generated
• Conversion ratio
• # of leads per channel / # of wins
• Actions / Goals
• # of users that perform a desired
activity when landing on the site (per
channel) / # of users who land on the
site (per channel)
14. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627
Questions?