Performance indicators help reveal your company´s productivity

Performance indicators help reveal your company´s productivity
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Select the Right KPI´s to Improve Performance


Key Performance Indicators (KPI) measure the effectiveness of a company in achieving business objectives. They can be used narrowly to measure one employee’s performance, broadly to gauge an entire company’s efficiency, or any combination in between.


Building plans and strategies are good, but if you’re unsure about how to apply KPIs to plans and strategies, you could be missing out on some very useful information that could have a big effect on your revenue. Here are a few things to consider in selecting the right KPIs to optimize company profits.


What are KPIs and how are they used?

Key Performance Indicators measure performance and highlight areas of success or improvement. Aside from internal company objectives it’s also important for the organization to achieve a high degree of customer satisfaction. Examples of a KPIs are monthly sales growth, number of qualified leads, lead to sale conversion rates, etc. But how do we choose them?


Asking the right questions is the first step. What goals do I (or my company) want to achieve? Clearly defined goals help leadership identify what to measure, and give employees targets to focus on.
We will use the example of increasing conversions from prospects to sales for this discussion. In this case you and everyone on your team should know a number, percentage, or range for a conversion goal.


Domino Effect

How Key Performance Indicators affect all areas of an organization are important considerations. Conversion goals for example, should be set by the leadership and supervisors, and shared with the entire organization clearly. Imagine a company’s leadership not setting those goals and leaving them to individual teams. Lack of communication relating to goals leaves employees confused and without direction. Here is where customer satisfaction plays a big role. Unsatisfied clients share their displeasure with other and that can have long-lasting effects. Effective organizations set clear expectations for employees and move together toward a common goal.


Quality of Information

Are my indicators verifiable? How you and your employees gather information is critical. Reliable information is one of the most important aspects of the Key Performance Indicator. Demonstrating how unreliable information can affect the company stresses the importance of attention to detail.


Keys to Selecting a KPI

Can the performance indicators you select be measured accurately, and will they help measure the effectiveness of process and/or people? Your KPIs should be practical and shared with management in order to avoid overlap with other KPIs in your company. The management team must have confidence in the indicator selected for that objective. If you choose to measure conversion rates, is any other unit or department of your company doing that too? Can the KPI be verified and allow the management to be notified easily?



This is where the evidence of good information gathering, teamwork, and communication between leaders and employees are demonstrated. Reliable information helps leaders strategize more effectively for the benefit of the company. For example, if you want to compare conversion rates from this time last year, you can know if your team, the economy, your product, or a combination of any of these things is the reason why your profits increase, decrease, or remain steady. Reports can also confirm the information that customers or employees share about a product or service. Most importantly the tell a company whether or not its met their KPI targets.



KPIs should work in concert with your existing business plan. They will help manage your business in ways that are practical and allow you to adjust in a reasonable amount of time, avoiding negative effects on revenue, and confirming revenue generating strategies.


KPIs are designed as a sort of quality assurance measure. It’s what most companies want to know in order to be profitable; what are you doing that is right, and what can be improved? For more information on KPIs and company strategy to improve profitability consult with a specialist at Advertising Avenue.



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