As many businesses are now starting to plan for the new budget and year 2022, the first focus falls on to the analysis of the year we leave behind.
Was it as successful as planned out? Did the strategies deliver the desired ROI? What changed and which new opportunities arose along the way? As we have worked hand in hand with our entrusted businesses in the past year, one question has been raised rather more often than not:
Are the key performance indicators used, to measure and track results, actually still valid and valuable for the performance evaluation of the business?
Choose the KPIs that are most relevant to your industry and business goals
We all are acquainted to standard KPIs such as
– MQL-to-Customer Conversion Rate
– Cost per Acquisition
– Customer Retention Rate
– Average Length of Customer Lifecycle
– Customer Lifetime Value
– Percentage of Leads in Each Lifecycle Stage
– Volume of New Opportunities
– and nowadays as well the Net Promoter Score.
For the sales staff on the grounds this may focus more on
– Sales Volume by Location
– Existing Client Engagement
– Upsell and Cross-Sell Rates
– Sales Cycle Length
– Customer satisfaction
– Average Response Time
– Number of Proposals sent
– or the Deal Win-Loss Ratio.
Whilst a standard list is valuable to set up and start out, your business needs to carefully evaluate which indicators are crucial to success or failure, and how much these impact your bottom line at the end of the year.
Measuring employee satisfaction may have a greater impact on your bottom line than you are anticipating. Whilst choosing the ‘right’ KPI is of the essence, an abundance of KPIs may simply be overwhelming, non-digestive and not helpful for your stakeholders. Many successful businesses have adapted the approach towards a stage associated KPI set up which facilitates spotting a crack in the customer life cycle and reacting swiftly upon it.
Stage vs Measure Example:
1. Awareness Stage – sentiment, top of mind brand recall, share of voice, social mentions
2. Consideration stage – purchase intent, bounce rate
3. Decision stage – conversion, cost per acquisition
4. Retention stage – customer engagement, loyalty, churn rate, average resolution time
5. Advocacy stage – Referral rate, top reviews
Track what matters
Once you have decided and consolidated which KPIs your business wishes to measure and data has been collected, it is crucial to make it a point to frequently analyse the information to understand why you got those results. Then, determine how you can improve your performance and follow through with action.
Attention, all your KPIs must be always tied to an overarching goal.
Listen to evolve into a customer-centric business
Let’s take a step aside from the clearly measurable KPIs and take a look at complementing insights and metrics not to underestimate.
Whilst successful sales professionals are great storytellers, they are even better listeners. Do use this to your advantage. Your team has the ability to share information and ask the ‘right’ questions that the specific buyer can relate to and feels comfortable with to open up and share insights that are worth gold to your business development.
What are their real problems? What are the competitors not delivering to them right now? What level of service are they expecting and ready to pay for ?
Now this is how your business can not only evolve and become a leading force, but tell value-based stories that will have a measurable impact on your bottom line.
In review, the ‘right’ KPIs are as important to you as they are to your potential clients and open great paths to genuine conversation which will be of mutual benefit. If we have left any questions unanswered or you feel that you need a fresh pair of eyes when getting started with your KPIs for 2022, feel free to reach out to our team.
