KPI stands for Key Performance Indicator.
These are numbers that show how close you are to your goals.
KPIs should be tracked on a daily and weekly basis.
The characteristics of a KPI are:
- Measurability: It must be a number that is easy to retrieve and record in the report. It cannot be a data chaser or a martyrdom every time it needs to be recorded.
- Relevance: It must have an impact on the business.
- Affinity: It must be related to management and, to some extent, result from it. What is measured must be the result of planned actions.
- Evolution: Must evolve or involute on the timeline, in accordance with the management strategy, and therefore be measured on the timeline.
The KPI needs to be measured constantly. This monitoring is what allows you to understand what works and what doesn't to bring management closer to its proposed goals.
Let's go to the Operational KPIs:
- Unique visitors to your product/service page
- Calls made and completed
- Qualification calls* (there was a conversation of business possibilities)
- Face-to-Face Meetings
- Proposals issued
- Won bids (deals made)
(*) Call: Telephone call, Skype Call, Video-conference etc
Financial KPIs:
- Cost per unique visitor
- Cost per connection made
- Cost per qualified call
- Cost per face-to-face meeting held
- Cost per proposal issued
- Cost per customer won
Example:
Monthly prospecting cost: R$ 6,000.00 (employees, telephony, lists, CRM etc)
Prospecting in a given month generated:
- Calls made and completed: 1,000
- Qualification calls: 50
- Face-to-face meetings: 15
- Proposals issued: 20
- Winning bids: 2
So the financial KPIs look like this:
- Cost per call made: R$ 60.00 (6,000/1,000)
- Cost per qualified call made: R$ 120.00 (6,000/50)
- Cost per face-to-face meeting held: R$400.00 (6,000/15)
- Cost per proposal issued: R$ 300.00 (6,000/20)
- Cost per customer gained: R$3,000.00 (6,000/2)
Another example, now for a campaign with ads:
Monthly campaign cost: R$5,000.00 (ads on Facebook and Adwords etc)
This campaign, in one month, generated:
- Unique visitors to the product/service page: 2,500
- Leads generated - Opt-ins (people who asked to be contacted): 100
- Qualification calls: 50
- Proposals issued: 20
- Winning bids: 1
So the financial KPIs look like this:
- Cost per visitor: R$ 2.00 (5,000/2,500)
- Cost per Opt-ins (leads): R$ 50,00 (5,000/100)
- Cost per call made: R$ 100.00 (5,000/50)
- Cost per proposal issued: R$250.00 (5,000/20)
- Cost per customer gained: R$ 5,000.00 (5,000/1)
Ideally, these numbers should be tracked at least weekly. The best closing day is Thursday evening. Friday morning, the commercial area checks the results and has Friday and the weekend for any operational tidying up.
Now for the most important part of this article:
For each KPI, operational and financial, you need to have a goal.
Example of a month and its operational goals for prospecting:
- Calls made and completed: 2,000 (team)
- Qualification calls: 100
- Face-to-face meetings: 30
- Proposals issued: 40
- Winning bids: 4
When you work in management, thinking about planning, obviously the indicator "Bids won" is the most important, because it is the only one that generates revenue.
Now, to increase that number, it is a matter of the performance of the predecessor or causative indicators. Notice that one indicator is influenced too much by its predecessor.
This is where the concept of funnel is born. The entry funnel is the volume of the top indicators and the exit funnel indicators are the conversion indicators, that is, customer generation.
KPIs are your measure of success in your business operation. We will measure and manage to correct the numbers that don't respond, and always against your goals.
