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Company performance - what is KPI?


KPIs (Key Performance Indicators) are measurable values that show how effectively a company achieves its business goals. They are like signposts on a map that help the company track progress and make the right decisions.




Why are KPIs important?


  • Progress monitoring: KPIs allow you to keep track of whether your company is getting closer to achieving its goals.


  • Identifying Areas for Improvement: With KPIs, you can easily identify areas where your company is not performing well and needs attention.


  • Data-driven decision making: KPIs provide specific data that helps make business decisions.


  • Employee motivation: KPIs can be used to motivate employees by setting clear goals and rewarding them for achieving them.


What are some examples of KPIs?


KPIs may vary depending on the industry, company size and specific goals. Here are some examples:


  • Sale :

  • Revenue

  • Number of new customers

  • Value of the shopping cart

  • Conversion rate


  • Marketing:

  • Website traffic

  • Engagement on social media

  • Email open rate

  • Customer acquisition cost


  • Customer service :

  • Response time to customer inquiries

  • Customer satisfaction level

  • Number of complaints


  • Finance :

  • Net profit

  • Gross margin

  • Return on investment (ROI)

  • Financial Liquidity


How to choose the right KPIs?


For KPIs to be effective, they must be:


  • SMART: Specific, Measurable, Achievable, Relevant, Time-bound

  • Aligned with company goals: KPIs should reflect the company's most important business goals.

  • Regularly monitored: KPIs should be tracked on an ongoing basis so that you can respond quickly to changes.


I hope this explanation has helped you understand what KPIs are and why they are important to business performance.


Remember:


  • There is no one universal set of KPIs for all companies. Each company should choose KPIs that best reflect its specificity and goals.


  • KPIs should be regularly monitored and analyzed. This allows you to quickly identify problems and make necessary changes.


  • KPIs should be used to make business decisions. This will ensure that decisions are based on data, not hunches.


Of course, you can always consult specialists on these issues; sometimes one session is enough to show the method and then use it yourself in other cases.


Regards

Małgosia from Milimetriks Graphic Studio

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