Choosing your business’s Key Performance Indicators (KPIs)? It can be tough, can’t it? You might be looking at an empty dashboard right now, thinking ‘where should I start’? Don’t fear, here are some starter tips to get you over the first few hurdles in the CAC LTV and other KPI selection process.
Your AdScience KPI dashboard is a live tool. It can be changed at any point. So don’t get caught up on getting it right first time. Your processes and priorities will change as you grow anyway, so relax and just get started with something! You will learn by using, so if you don’t use your CAC and LTV KPI data you will never learn how to make it better. If you start using data and KPIs, you will quickly learn what works for you and also what doesn’t.
At AdScience we always aim to break the KPI challenge into two questions. Firstly, what should we be measuring and why? Secondly, how are we going to measure it?
By breaking it into two main questions, you will make getting started a lot easier. Concentrate on the first question to begin with. Free your mind from specific metrics and create a list of what would be meaningful for you to measure based on your business objectives.
Our starting point here is always to ask why do we exist? Think of your main stakeholders, typically your clients and your shareholders. Then ask what are the one or two things that they expect from you? For example, your shareholders might expect you to grow sales and margin, whilst your clients expect you to solve their questions quickly and to a satisfactory level or build a product which makes their life easier.
After that, you need to consider the key things you must do in order to achieve those main goals. For example, to grow sales you probably need to have more meetings and calls per day, week or month. You are not measuring the end result, but you know that if you have more meetings and calls then you’re a hell of a lot more likely to achieve one of your main goals of growing sales.
You can add multiple leading indicators to your list at this stage, however, ensure everything has an obvious connection back to your main goal. We always prefer to keep this list small and focused on the most important things we are responsible for delivering. Having too many KPIs will dilute your team’s focus, which defeats the point of KPIs.
Having built your list, you need to think about how you are going to measure things. Our best advice here is keep it simple! A lot of people love complicated metrics that might be great for planning or benchmarking, but hopeless for your day-to-day management.
The metrics you choose have to be simple so your team understand and connect them back to the action they just took or are planning on taking. The clearer the connection is, the better. Your measure will be more engaging and more meaningful to you and your team, which is what matters the most.
So there it is, the key steps to get moving with business KPIs. Ultimately, you need to avoid getting stuck into specific metrics too early in the process and start by really understanding your business or team goals, then looking at what activities will help drive you towards that goal. Then you can start really thinking about how to measure those activities. However, avoid being a perfectionist as getting started with something is always better than nothing, and you can always iterate as you grow and prioritize change.
We’d love to hear how you find getting started with these tips and also, if you have any other techniques that work. We’ll be following-up shortly with a post on how to evolve your KPIs from this starting point.