Crucial Business KPIs to Track to Achieve Your 2021 Goals
It’s traditional to set resolutions at the beginning of a new year. These are simply goals we’d like to see ourselves achieve over the next 12 months. Any life or business coach will tell you, setting goals without any mechanism in place to track them is a recipe for failure. It’s why the gyms clear out by March and savings accounts fail to grow.
Not only do most folks struggle with setting specific goals, but they fail to establish a method for measuring them. Without metrics, there’s no way to celebrate success and keep you motivated and no way to realign and adapt when falling short.
- How Can KPI Tracking Help Your Business Achieve its Goals?
- Key Performance Indicators Your Business Should be Tracking to Meet its 2021 Goals
- Set Your Business Up for Success in 2021 with BrightGauge!
How can KPI tracking help your business achieve its goals?
For many, goal setting is a struggle in itself. Arguably, one of the reasons it’s a struggle for individuals and businesses alike is because no one has identified the metrics associated with the goals they’ve set. Without understanding the best way to measure success, it’s hard to analyze the landscape; it’s difficult to figure out where to set your sights; it’s a struggle to determine what’s attainable and relevant. You have to understand where you’ve been, where you are, and where you’d like to head in order to set appropriate goals.
The only real way to understand all of those elements is to determine what key performance indicators (KPIs) are the best measurements for your goal. These help you collect the right data, monitor it, and analyze it over time. The first real step is to determine the business objective, break it down into specific and time related goals, and then determine which KPIs will best help you measure your success on that path.
Key performance indicators your business should be tracking to meet its 2021 goals
The KPIs you choose to monitor will, of course, depend on the goals you set. That said, it’s important to identify and segment the key business areas where goal setting can help determine your path, grow your business, build your teams as units and as individuals, and increase customer satisfaction and loyalty. Some of these KPIs will obviously overlap as integral business systems interact with and depend on one another.
For example, employee satisfaction will likely have a direct impact on customer satisfaction and retention. When analyzing the metrics over the year, it’s important to keep that in mind as you adapt strategies to meet your goals.
When we discuss employee KPIs, business minds naturally turn to employee productivity and performance. But before getting into those metrics, there’s one that’s more important as it is costly to your business in time, money, and productivity loss.
Perhaps one of the most important indicators is churn rate. While that rate is typically customer turnover, it can, equally, be applied to employee turnover. As noted, the two may be related so it’s a good idea to keep track of both.
When factoring in the amount of time it takes to find a suitable candidate and get them trained and up to speed on business needs, your business has likely lost time, money, and work. If you’ve lost a lot of employees over the past year, it’s a good time to make some changes and track the success of those efforts.
Revenue or profit per employee
Depending on the structure of your workforce, both of these provide valuable information regarding just how much each employee is bringing in and ensures your company’s profitability. Your workforce should never be the reason you’re not making money. For businesses that rely on contractors or freelance workers, profit is a better indicator as it excludes expenses, something you likely have less of for those employees.
Average task completion rate
How long does it take your team to perform tasks they do often? Not only does this help you measure their efficiency and perhaps determine areas for improvement, but it is also incredibly helpful for project management by helping them determine how long tasks will take.
By examining an employee’s weekly capacity and subtracting the hours they’ve logged, you can determine what an employee’s capacity is to better manage your team. Not only that, but by measuring this KPI, you can also see who on your team can handle more and who cannot.
When employees are consistently overwhelmed and overburdened, satisfaction goes down. When satisfaction goes down, productivity is impacted as well. Keep your team running smoothly, efficiently, and happily by monitoring their capacity.
Additional KPIs for this group might include sales quotas, production goals, and customer retention. Again, KPIs will largely be dependent on your organization’s business goals.
Business growth KPIs
For many organizations, growth is the goal, but what that growth looks like depends on where a business is in its own lifecycle, what goals are attainable in the market, and what strategies will be employed to hit those goals for the upcoming year. Still, there are a few very important metrics that may help an organization align those strategies.
Cost of customer acquisition (COCA)
How much does it cost your business to acquire new customers? How much is being invested in marketing efforts? This business KPI, to be a useful, must be compared with lifetime customer value to help your team determine if you’re over spending.
If you realize this cost is too high, one strategic goal may be to focus efforts on your customer service team and support them in hopes that improved customer satisfaction and retention can increase referrals from existing customers. This word of mouth can actually drive the COCA down. Simply put, this is a good metric for any business to analyze to determine marketing strategies.
Lifetime customer value (LCV)
How much will a single customer spend at your business over their lifetime? Ideally, you can keep this number growing through more product or service offerings, but at a minimum, organizations should be tracking this to ensure that customers come back. If they’re not returning customers, why not? It may be time to look at customer service metrics.
Revenue growth rate
This is the best way to measure whether your business is growing or not. Are you bringing in more revenue now than across a previous similar time period? You’ll want to make sure you’re comparing month to month or quarter to quarter to ensure accuracy. If you’re seeing this number slip, it’s a good idea to investigate why and analyze it with other metrics.
While there are certainly other KPIs here to consider, such as conversion rates, customer attrition, cart abandonment (for online sales), average order value, number of subscriptions or subscribed users, number of active users etc., these are all largely dependent upon the type of business and industry.
Ideally, business KPIs that focus on revenue, profits, and balance against costs and expenditures are going to be the best indicators of your organization’s health.
Customer success KPIs
The health of your organization depends not just on your team, or your leadership, but it also depends on the happiness of your customers. So, keeping track of business metrics associated with your customer satisfaction is just as essential as any other data you collect and analyze.
As with many of the other metrics, there’s crossover here. Lifetime customer value is something you’ll want to keep track of in terms of customer success as well, not just for your business growth.
This metric shows up for key segments of your business. Across the board, you should be keeping track of where you’re losing leadership, team members, and, of course customers. Not only does this business metric include customers who leave, but it also includes customers who decrease their service level. It’s typically an indicator of service quality or value.
This one is simple to measure: Survey your customers. How satisfied are they overall? Surveying your customers is one of the best ways to track how your team is doing. This number will impact several others down the line.
Net promoter score
When you survey your customers (not if, but when), how likely are they to recommend your product or service to others? When we look at decreasing COCA, your current customers become a very strong asset. This score ensures you’re keeping track of how they’re marketing for you.
Monthly recurring revenue (MRR)
While churn reveals how many customers are leaving, MRR is a good indicator of the health of your existing customer base. Growth in this area is a financial indicator of customer satisfaction and success.
A direct result of customer satisfaction and a key component of LCV, this metric reveals how existing customers are purchasing additional products and services from your company. Are your customer service and sales teams working together to upsell these customers on other offerings? Further, if they’re spending more, you can be certain that customer service satisfaction and product or service values are high for your existing customers.
Much like other areas, KPIs for your customers will depend largely on your industry or business, but keeping track of these metrics will help you determine how to best address customer service needs and explore areas for business growth and improvement.
A good number of the KPIs used to measure a leader’s success will depend on the success of their team and some of the KPI examples mentioned above. How effectively your organization is meeting sales, service, support, production, and growth goals is largely an indicator of how successful your leadership team is in seeing that your team delivers on larger strategic goals.
However, there are certainly some other metrics worth investigating.
Employee engagement and satisfaction
How effectively is the leader managing their team, keeping them invested in team and business goals, and ensuring churn rate stays low? How satisfied are the employees with their jobs and understanding where they fit within an organization, and how does that translate to their job performance?
You can determine this by measuring engagement and satisfaction rates throughout your staff.
Team retention and training dollars
While two separate metrics, they can be closely related. If training spending is high, it may suggest issues with quality of hires or retention. As noted above, is a team leader retaining top talent?
That said, you’ll want to balance this number with any promotions that may suggest a leader is effectively mentoring employees and ensuring business continuity and growth. Promotions may also impact training dollars spent as training may be better preparing team members for other roles within the organization.
Of course, much of your leadership KPIs will be visible in other metrics, but perhaps it's most visible in company culture KPIs. How is your leadership team fostering a culture of growth, success, and engagement?
Company culture KPIs
Company culture KPIs are closely tied to your employee KPIs. Your organization is only as strong as your team, and your team’s satisfaction is reflected in their productivity, engagement, and happiness.
Utilizing some of the top business KPIs above to get an overview of whether your company culture is indicative of growth and team investment, you’ll want to look at both employee KPIs and leadership KPIs. These metrics will provide valuable information.
Another metric to measure your culture includes the following:
This metric, not noted above, provides information about how your team is using its time. How productive are individual employees?
Happy employees are productive employees. They're not feeling overwhelmed or underutilized, either of which can impact overall job satisfaction and performance. Ultimately, the more satisfied employees are, the more likely they are to buy in to company culture and objectives.
Set your business up for success in 2021 with BrightGauge!
For many organizations, yearly goal setting is reliant upon the data from these important business KPIs. Without this information, it’s hard to set goals that are specific, relevant, and attainable. These are, of course, the tools that make progress measurable, but they’re also how you adapt and ensure alignment across the organization throughout the year.
It’s a lot to manage, no doubt. As you probably noted as well, it requires being able to customize and segment metrics across teams or departments as well as individual employees. Further, it requires the ability to compare different KPIs to one another to get a better understanding and complete picture of your business.
BrightGauge’s customizable dashboards allow you to keep all of your KPIs in one place and visualize them as you set strategic goals for the future. No more switching applications or monitoring tools – all your data is accessible with robust reporting tools and visualizations of that data tailored to your needs. BrightGauge’s dashboard provides the ideal solution for your tracking so you can focus on growing.