A Quick Guide to 11 Types of KPIs

This month, we're stepping away from our regular dashboard of the month to share this awesome Engineer Audit Monthly Report. Luckily, your BrightGauge is flexible in that any of the gauges you see here can also be added to a dashboard, or converted to a number gauge and used to track your goals.    All KPIs displayed: Hours Billable vs Total Member Scorecard - Last 6 Months Hours by Work Type Time Rounding CSAT 6 Months   What is in the report On a recent account review call with our partners Cygnus Systems, I was amazed by some of the time tracking gauges their CEO Craig Isaacs shared.    For this monthly report, we're given a summary of the team's performance over the last 6 months, and whether each metric is trending upwards or downwards.   We especially love this Time Rounding gauge that highlights when team members might be over- or under-rounding for their timesheets, a common hallmark of those who don't enter their hours in a timely manner. This translates to keeping an eye on upping your Billable % for each team member.    While it's a simple amount of gauges, this report gets the job done. When it comes to putting the numbers in front of your team, less (and what's actionable), is always more!   How to recreate in your BrightGauge First, view the report here. Follow these modules here to recreate this report, or build any of the gauges found here, back in your BrightGauge account: Report Buildout Key     For more examples of how BrightGauge works, check out our Templates as well as our Monthly User Showcase Webinars.

*This post was originally published on June 1, 2017 and has been updated.    How do you analyze the health and success of your business? Choosing the right key performance indicators (KPIs) is critical for measuring effectiveness financially and operationally. However, while most business owners know the importance of proper KPI selections, they don’t often know the difference between the various types of KPIs. Having a solid understanding of the different KPI types helps to ensure that you have your bases covered. It provides a well-rounded approach that allows you to evaluate the past, present, and future of all areas of your business. Knowing how to classify your KPIs can help you to expand upon the tracking of specific metrics and give you a deeper, more thorough look into your business and its performance. Let’s break down the 11 most-used types of KPIs: 1. Quantitative Indicators Quantitative indicators are the most straight-forward of KPIs. In short, they are measured solely by a number. There are two types of quantitative indicators - continuous and discrete. Continuous quantitative indicators can take any value (including decimals) over a range. Discrete quantitative measures include things like complaints, accidents, and rating scales. Examples of quantitative measurements include measurements of time, dollars and cents, and weight. 2. Qualitative Indicators Qualitative indicators are not measured by numbers. Typically, a qualitative KPI is a characteristic of a process or business decision. Examples of qualitative KPIs include opinions, properties, and traits. A common qualitative indicator that organizations regularly use would be an employee satisfaction survey. While some of the survey data would be considered quantitative, the measures themselves are based on the opinion of a person. Qualitative focuses more on the “why” as opposed to the “how.” 3. Leading Indicators Leading indicators are used to predict the outcome of a change in a process and confirm long-term trends in data. In a survey of several fortune 500 companies around the metrics that they use as leading indicators, 3M Corp, a mining and manufacturing company, supplied these answers: Number of new patents Number of new innovations Customer service perception These are great examples of leading indicators. While in and of themselves they are not standalone indicators of success, they are indicative of success in other metrics and serve as an excellent indicator of success in their initiatives. 4. Lagging Indicators Lagging indicators are used to measure results at the end of a time period to reflect upon the success or failure of an initiative. Often, they are used to gauge historical performance. Some examples of lagging indicators include total customer contacts or total incidents. Lagging indicators give businesses the ability to evaluate the effectiveness of their business decisions and determine whether their business decisions facilitated the desired outcome. 5. Input Indicators Input indicators are used to measure resources used during a business process. Some examples of input indicators include staff time, cash on hand, or equipment. Input indicators are necessary for tracking resource efficiency in large projects with a lot of moving parts, but are also useful in projects of all sizes. 6. Process Indicators Process indicators are used specifically to gauge the efficiency of a process and facilitate helpful changes. A very common process indicator for support teams are KPIs focused around customer support tickets. Tickets resolved, tickets opened, and average resolution times are all process indicators that shed light on the customer support process. In this example, that data can be used to influence changes in the support process to improve performance. 7. Output Indicators Output indicators measure the success or failure of a process or business activity. Output indicators are one of the most used KPI-types. Examples of output KPIs include revenues, profits, or new customers acquired. 8. Practical Indicators Practical indicators take into account existing company processes and explore the effects of those processes on the company. For this reason, many practical indicators may be unique to your company or work processes. 9. Directional Indicators Directional indicators evaluate specific trends within a company. Where are the metrics moving? Are they improving, declining, or maintaining? An example of a directional metric used by many service providers would be Time on Site. This metric is used to measure the time that techs spend on-site fixing issues and troubleshooting problems. Ideally, most companies would like to lower their average Time on Site, as it is indicative of a faster, more effective service. Broad directional indicators can be used to evaluate your company’s position within your industry relative to competitors. 10. Actionable Indicators Actionable indicators measure and reflect a company’s commitment and effectiveness in implementing business changes. Those changes could be within business processes, company culture, or political action. These metrics are used to determine how well a company is able to enact their desired changes within specified time-frames. 11. Financial Indicators Financial indicators are the measurement of economic stability, growth, and business viability. Some of the most common financial KPIs include gross profit margin, net profit, aging accounts receivable and asset ratios. Financial indicators provide straight-forward insight into the financial health of a company but must be paired with the other KPI-types mentioned in this article to provide a complete picture. Conclusion Here at BrightGauge, we work closely with our clients to drive business growth by using KPIs and advanced metrics. Understanding the different types of KPIs can help teams to design a well-rounded evaluation system that boosts profits and improves business processes. Want to learn more about growing your business by tracking effective KPIs? Click Here to download our free Whitepaper, “How to Improve Your Business with KPIs.” *Amanda McCluney was a BrightGauge employee through 2017. 

As many managed service providers (MSPs) are placing a heavy emphasis on customer retention in addition to customer acquisition, it’s becoming increasingly important to understand how to track and manage sales activities, opportunities, revenue, and more.    Having a solid grasp on these activities can make a real difference in how efficiently your business is run because if these critical metrics fall through the cracks, it can have a negative impact on the business decisions you make, thus causing a ripple effect.   The key is to hone in on a specific set of metrics and track them in real-time.    Just ahead, we cover 7 key performance indicators (KPIs) you should be tracking and how you can automate the monitoring process.   7 Sales Activity KPIs to Track   Net New MRR - the reigning champ of all sales metrics. This is one that every sales manager is sure to prioritize, as it is a valid indicator of how well (or not) your company is growing. Essentially, Net New MRR is the amount of monthly revenue generated by new customers and comparing this metric over time is essential in understanding your typical periods of high-profits versus churn, how your growth is trending, and how to plan and forecast your financial performance. Quotes Won - quite simply, this is a number that tells you how many quotes have been closed in any given time period (likely per month). It serves as a quick check-in to make sure sales performance is at an acceptable level. A number that is below your specific threshold can indicate that it’s time to dig deeper and find underlying causes for that level of performance. Percent Gross Margin - this may be the oldest KPI on the block, but it’ll never not be important, as it is another solid indicator of a company’s financial performance. It basically is a calculation of your total revenue minus your cost of goods sold (aka, Revenue - Expenses). The higher this number the better, as that shows you’re bringing in more than you’re spending - in other words, you’re making a higher profit on each dollar being spent to run your business. Top 10 Accounts by Revenue - which of your clients can you credit with bringing in your largest chunk of revenue? And why is it important to know this? Well, it is known that it is more economical to retain existing clients than to attract new ones. So, if you know who your top performers are, you’re going to want to focus on nurturing those accounts and making sure those clients have what they need to stick around for the long-term. Quotes Leaderboard - in this time of global unrest, remote work, and many “unknowns” it’s increasingly challenging and important to motivate and incentivize your team members. Leaderboards are an effective way to do this from afar because they rank performance for all to see. Creating a sales leaderboard based on who has closed the most quotes can inspire a little healthy and friendly competition between team members and can effectively keep motivation up. Reward your winner with an Amazon gift card or something simple. Profitability - the best way to track profitability is to understand how it fluctuates over time. What are the trends associated with this number? Are you generally becoming more profitable over time (awesome!) or are you wavering back and forth? When calculating this metric, you’re likely taking revenue, costs, and gross margin into account and comparing what they do over time. Understanding this will help you plan for the future. Count of Quotes Won - yes, we already covered this one, but here’s a different way to analyze this metric. Take a look at this number over time - for example, for each of the last 6 months - to understand when you’ve got momentum and what you can attribute to that momentum. You may notice trend lines that can drive your sales processes in the future.    Automating KPI Tracking   It’s easy to understand the need for and importance of tracking data, but doing so can be a full-time job in and of itself. This is why it pays to invest in a tech stack that works for you. Have reliable tools that support your business and can automate time-consuming, yet critical tasks for you.    Any sales manager should be using a sales tool, like ConnectWise Sell, to manage quotes, proposals, contacts, opportunities won, and more. This is just an absolute must if you want to keep your sales processes and communications with prospects or partners organized.    Because you’re likely be using several tools across your company (your accounting team may use Quickbooks, service team may use ConnectWise Automate, marketing might use SmileBack, etc), it also makes sense to bring in a tool that can consolidate all your data into one place, like BrightGauge.    Adding business intelligence like BrightGauge to your stack can give you that real-time, high-level visualization of your KPIs at any given moment in time. Having the ability to glance over at a dashboard and see your important metrics can be a game-changer for stronger and faster business decisions.    Plus, it makes it easier to share KPIs with internal team members, key stakeholders, or your clients, which gets everyone on the same page and working together to meet goals.    No matter the datasource you’re integrating with BrightGauge, you’ll have access to pre-built dashboard and report templates, meaning you’ll get right to that data you need from day one.   As an example, if you integrate ConnectWise Sell with BrightGauge, you’ll automatically have access to a Monthly Performance Report that pulls in all the KPIs we listed above.    Month-to-month you can review this data with your team, dig into why the numbers are where they are, and make a plan for the coming month. Doing this ensures everyone is optimizing productivity, efficiency, and accountability and it fosters relationships built on trust and transparency.    To learn more about this ConnectWise Sell Monthly Performance Report or to ask a question about BrightGauge, contact us today.    For more KPIs that MSPs should track, plus their accompanying formulas, see 70+ Metrics for MSPs.