What The Key Performance Indicators (KPI) We Should Rely on to Measure The Success?

What Is KPI?

It is the Key Performance Indicator. In brief, it is a measurable value that shows how effectively a company is achieving its business objectives, the overall performance, or just in particular departments such as sales, marketing, HR, support. In other words, KPIs specifically help determine a company's strategic, financial, and operational achievements. But keep in mind, not all KPI is good. KPI is only great if it inspires action, so will you actually measure and influence these actions. And, make sure to pick the appropriate time frame since the different industry has its own cycle.

A Business Which Is Local to Me

I would use my father's food processing company as my example. My father owns a pork processing company in Taiwan that manufactures pork processing products. In the recent 3 years, he decided to sell his products online. So, he cooperates with a local e-commerce company and signed an agreement to built a long-term relationship with the business.

What The Key Performance Indicators (KPI) He Would Rely on to Measure The Success of Its Internet Presence?

Plan, The Raw 

Start with the measure, he sets targets such as new customers, return customers, and reviews. Then, he sets the numbers of these targets, 1,000 new customers, 3,000 return customers, and 500 reviews are over 5-star.

The sources of these measurable targets are from the platform provider, it collects the customer behaviors data in real-time for the users on the platform. Then, my father has to choose the time frames such as a week, a month, or a year to do his analysis. To choose the right frequency, he must be careful about the key characters of the industry he is in.

In Progress, Control and Monitoring

Not just plan to achieve the goal, he still has to truly understand how many targets are gets, how many are not, and why. Therefore, he measures the number of new customers, the return customers, and how many reviews are excellent. So, the number will be the percentage of 1,000 new customers are get, the percentage of 3,000 return customers are getting, and the percentage of the excellent reviews.

However, to get these percentage numbers, he still needs to set the time frame. How many reviews are 5-star this year, how many customers are new this month, or how many customers are returned for his products last month?

Actions and Changes

We are not always perfect, we need to do some changes and adjustments. For example, if the weather is not so nice or due to the pandemic of COVID-19, some fulfillments may not be doing as well as they normally did. Therefore, the plan and the progress must be considered to change quickly to meet the real-world situation. The new customers and the return customers may be changed lower than 30% of their original numbers.

Reference

Twin, A. (2020, August 28). Understanding Key Performance Indicators (KPIs). Retrieved December 04, 2020, from https://www.investopedia.com/terms/k/kpi.asp

What is a KPI? Definition, Best-Practices, and Examples. (n.d.). Retrieved December 04, 2020, from https://www.klipfolio.com/resources/articles/what-is-a-key-performance-indicator