Have you checked your KPIs today?

 key performance indicators

What are KPIs? No, it’s not the latest fitness fad, but they can help you maintain the fitness of your business.


Key Performance Indicators (KPIs) are metrics that provide a quantitative measurement of your company’s performance over time. They should act as a report, giving you a quick understanding of how your business is doing.

The main idea is to have a few key measurements that help you track critical aspects of your business.  KPIs should be “big picture,” taking into consideration your Personal Vision and the company’s goals.

There are no “standard” KPIs. Every company has a different driving force, so KPIs will vary from one to another.  A KPI should also be measured against something, such as Monthly Sales vs. the same month last year, and against budget.  

Your metrics should illustrate how you are doing, not how your industry is doing. For example, here is some “KPI Logic” from members of one of our Boards:

l  If we have more than an “X” weeks backlog, we begin to miss deadlines due to over commitment. But less than “Y” weeks backlog results in under utilized personnel and resources. My KPI is the number of weeks of backlog against the Over/Under optimum range.

l  We are growing rapidly, and it is difficult to track the productivity of new hires.  My KPI is dollars of revenue per field technician.

In additions to keeping an eye on Prospects, Efficiency, Pipeline and Quality, KPIs are also helpful to keep an eye on your Industry and Economic Trends. For example the CEO of a Carpet manufacturer may want to watch the health of the Housing industry.

 Setting and Using KPIs

The best KPIs provide a high-level snapshot of success for the business, and are rooted in the vision of the organization. They are well defined and measurable, and are tied to key business processes and activity that supports the company’s overall goals.

A good example of a KPI for increasing revenue might look like this:

  • Annual Sales Goal:   $2,000,000
  • Average sale / number of sales:   $4000/500 sales per week/day: 10/2
  • Close rate:  50%
  • Appointments per day:  4
  • Calls required per appointment:  5
  • KPI =  20 Calls per day

The important thing is to be as specific as possible and to make realistic goals.   For instance, you wouldn’t want to design a KPI for increasing customer satisfaction unless you had a way to measure and track customer satisfaction, such as a validated survey system.

Once you determine your KPIs, it’s important to communicate them consistently and continually. One way to do this is to visibly chart their progress in break rooms or in periodic updates to your employees.  KPIs should also be incorporated into your performance management system, and/or tied to incentives, raises or profit distributions.

In addition to providing a snapshot of how the business is doing, KPIs also help you improve your business processes.  It’s true – we manage what we measure!

For additional information, or an in-depth look at your KPIs, contact us at www.TABCentralAlabama.com