What is KPI?
Key Performance Indicators (KPI) are a measure in business studies that help the owner or the chief executive to monitor their business. Each field of business has its own KPI. In the field of Marketing or customer service, the indicators are as follows:
- Average Wait Time: it is the mean time taken by the front line to respond to a query.
- Average Resolution Times: the time taken for the team to resolve the customer’s issue.
- Customer Churn: when the customers stop dealing with a company.
- Customer Satisfaction Score: measures the happiness of your clients over a short period of time.
Understanding the essence of KPIs
Uncover the essential qualities of a good KPI, including its ability to provide objective evidence, inform decision-making, and track meaningful changes over time. Learn the key questions to ask when defining your KPIs, ensuring they are aligned with desired outcomes and supported by a robust review cycle. Whether you’re new to KPIs or seeking to enhance your understanding, this video is an invaluable resource.
Topics
- Key performance indicators
- Creating good KPIs
- Measuring progress
Video summary
This video discusses key performance indicators (KPIs) and how they are used to measure progress towards intended outcomes in business, portfolio, program, or projects. KPIs are a way to focus work on delivering operational or strategic requirements. Good KPIs should be objective, measure the right things to inform decision-making, link directly to the organization's strategic imperatives, track performance changes over time, track things that matter to the business, and be SMART (significant, measurable, achievable, relevant, trackable, ethical, supported, and time-bound). To create good KPIs, organizations should ask the right questions about desired outcomes, measures of progress, responsible parties, review processes, and relevant stakeholders. While some companies have one metric that matters to them, in complex organizations KPIs are important to measure and track progress and highlight issues. Project managers can adopt the KPI process not only to drive projects but also to drive and improve performance.
Frequently asked questions
What does KPI stand for?
KPI, or key performance indicator, is a value that shows us how effectively the company achieves key business goals. Organizations use KPIs to evaluate their success in achieving their goals. Thanks to tracking this data, they know whether their actions are effective or not.
What are the examples of KPI?
KPIs depend on what your company wants to monitor. For example, in the marketing department, these may be: brand awareness, customer engagement, Marketing Qualified Leads (MQL) and Customer Acquisition Cost (CAC), in the sales department it will be: monthly sales increase, average profit margin, or product performance. In SaaS, on the other hand, these may be: liquidity index, KPI Net Promoter Score (NPS) and KPI of customer acquisition cost (CAC).
When to use KPI?
We use KPI when we want to track the progress towards achieving a specific goal over time. Goals can change, and so do results and progress towards them. It's extremely important to keep track of them and determine if they are satisfactory or not.
Expert note
<p>As a call center and help desk specialist, I can confidently say that tracking KPIs is essential for measuring and improving customer satisfaction.</p>
