KPI - What is it?
KPI (Key Performance Indicator) is a way of assessing whether a given action meets the objectives set by the company. Key Performance Indicators (as they are called in Portuguese) allow the company's performance to twitter database quantified and areas of success to be identified. These indicators can also be used as a means of communication between managers and employees of the company, valuing everyone's work.
Primary - strategic indicators used by company managers to quickly check whether objectives are being achieved. For example, whether the company achieved the desired profit during the first quarter of the year;
Secondary - tactical indicators, usually managed by department heads. They allow, for example, to identify the origin of the company's profit: 25% online sales, 75% local sales.
Tips for Choosing Good KPIs
The first step in choosing relevant KPIs is to identify what the company wants to achieve and what goals are necessary to achieve these objectives. Defining these objectives becomes simpler with the use of the SMART method. Learn how to create essential objectives for your business.
Therefore, and according to the SMART method, KPIs should be:
Specific, easily understood by all employees;
Possible to measure clearly and objectively;
Achievable, within reality;
Relevant to the company's objectives;
Be framed within a specific period of time.
Examples of KPIs
Each company needs to create its own KPIs, adjusted to its reality and business area. These are some examples of general KPIs that can be used:
Profit : Important indicator to understand the company's success;
Cost : relevant for managing expenses and finding ways to reduce costs;
Number of Customers : analysis of new customers or lost customers to find out if the company is meeting customer needs;
Customer Acquisition Cost : assessment of the amount you have to invest to acquire a new customer.
