Key Results Indicators are valuable for businesses when tracking the performance of certain areas in the company which are considered important for success. For many businesses, these KRIs are common but there are others which are specific to your own industry and business.
As a leader in your company, it is necessary to scan all of your data on results indicators to determine which are the most critical in making important strategic decisions for your business.
Some of the most common Business KRIs include
- year-to-year growth
- profit margins
- market share,
- revenue per employee
- working capital ratio
- labor as a percentage of revenue
Industry Specific KRIs
There are also KRIs that are industry-specific. For example:
- Retail companies may use sales per square foot as a key results indicator.
- A technology company might focus on the percentage of revenue invested in research and development.
- Other sales-driven companies may concentrate on the measure of marketing costs to the percentage of revenue or sales cycle times.
Each industry will have key results indicators that are necessary to measure in order to develop the right strategic plan and set goals for success. You cannot ignore KRIs or else you will not know what actions to take in order to reach your goals for your company. It’s a bit like going on a road trip but failing to plan your route or even bring a map.
Departmental KRIs
Each department within the company may have its own set of KRIs that need to be measured. Break these down as needed to help measure results and stay on track. Some examples include:
Marketing:
- Number of prospects in the pipeline
- Conversion rate
- Cost per prospect
Sales:
- Total scheduled meetings
- Average meetings to close sales
- Cost to acquire customer
Customer service:
- Number of customer complaints
- Complaints per product
- Complaints per customer
Creating and Tracking KRIs
Take the time to sit down with your leadership team and create a list of your business result indicators in each area of the company. From that list, choose three to five results indicators that are the most important for success. These are your key results indicators for your company.
Once you have determined your KRIs, set up a system for tracking them. You can do this with a simple Excel spreadsheet. Allow each person responsible for those KRIs to track them. They are responsible for making decisions that drive those results for success and they need to be able to keep track of those results.
Call this your company dashboard, giving all those who need to know quick access to the information that helps them make the right decisions to achieve the best results.