You’ll want to be as specific as possible when determining what business metric to measure. And you’ll want to make sure it’s the most useful measure when it comes to determining whether or not you’ve achieved your goal.
For instance, if you want to measure Facebook engagement, you might decide to focus on how many people liked, commented and shared your posts, over say the number of impressions you’ve made.
You shall also decide on what form this measure will take—will it be a number (say, the number of new customers) a percentage (the percentage of new customer growth) or something else entirely?
Just as important as what you’ll measure is how often you’ll measure it. You can’t have a plan to increase gross profit without knowing when you’ll start and finish measuring your gross profitability—the point you’ll start measuring from and when your KPI will be met.
You’ll need to determine the duration you’ll have to meet your KPIs to give yourself a chance to meet your target.
Also, once you set a duration, establish how often you’ll sit down and check in on your KPIs (most likely as a team). If you have a quarterly KPI, you might decide to do this monthly, or even weekly.
Speaking of which, your target is the value you want to achieve—100 online sales in a week, 20% monthly newsletter open rate, 100% project completion by the end of the year.
Your target should be set with frequency in mind, so you can base your numbers on how long you have to achieve them. You might also base them on creating steady improvement from previous periods—more sales this quarter than last. To make this easier and more accurate, make sure you have apples-to-apples comparisons (it may be unrealistic to compare a short month like February with a long month like March without averaging out the days, for instance).
Like all goals, your KPI target gives you something to aim for, so try and find the fine line between realistic and ambitious.
Source of data
What are your means for collecting and reviewing data on your KPIs? Make sure this is determined from the outset so you and any other stakeholder know which hymn sheet to sing from.
You might decide to rely on your CRM to collect new customer data, your POS platform to secure your sales numbers, or your project management software to track completion rates. Ideally using a digital source of data, you’ll find it simpler and quicker to pull together information, so you can even catch up on your KPI progress more regularly without too much hassle.
To track KPIs easier, also consider a data dashboard—although we’ll talk more about the benefits of those shortly.