Holy moly, what a blustery day! But it does serve a purpose by being the perfect kind of weather to curl up and do this week’s blog installment. Plus I’m sure you have been on the edge of your seats for a week now anticipating what I have to say about KPIs so I’d better get on with it…
It seems that throughout my blogs there is a recurring theme…acronyms! And not wishing to break tradition, this one will be the same as it centres around Key Performance Indicators, a.k.a. KPIs. Now that your memory bank has found space for some more ‘jargon’ it’s best to establish exactly what KPIs are.
Simply – they are units of measurement, the great great aunts and uncles of the bar graphs and pie charts.
More complex – they are used to define and measure progress towards a specific agreed gaol.
Still with me? Good, moving swiftly on…
Not every business will be able to use the same type of key performance indicator . But one thing that must be consistent is the ability to define and measure your KPI. For example, if your goal is to generate more customers, you need to be able to differentiate between new and returning customers…
Some common examples of KPIs used in the marketing industry are:
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New customers acquired
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How many become returning customers
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Profitability of individual customer segments
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Customer departure due to dissatisfaction
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Customer attrition
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Testing of segments
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Testing of activities
By breaking things down you can start to build a bigger picture which will also give you better insight into devising company specific KPIs. Choosing the right KPIs is reliant upon having a good understanding of what is important to your company. It may be that this has been predetermined by budget in which case you would focus on profitability KPIs, but it is more likely that it has been determined by an agreed goal or goals which will be specific to departments within the company.
And by evaluating the success of a company or, more specifically, the success of a particular activity it has been engaged in, you get a better idea of whether or not what you are doing is bringing you closer to achieving your goal.
I promise to keep away from acronyms next week so how about something a little more lighthearted? As Christmas is not too far away maybe we should talk about tailoring your newsletters and promotions so they land with the force of a tightly compacted snowball and get you results. Until then, farewell blog buddies.