Key Performance Indicators In Business!
I mean how do you know whether someone is doing a good job or not?
How do you know what marketing channels are working?
How do you know if your product/service is getting better or worse?
Today I want to talk to you about KPIs, or Key Performance Indicators.
KPIs are the lifeblood to any sort of tracking in your business.
The most powerful CEOs in the world admit to having what’s known as a scorecard of KPIs they can look at (10-12) every day and know what is going right and wrong in their business.
So with that being said let’s talk about what makes a great KPI and what are some we use inside our multi-7-figure company.
First and foremost is, what are you going to do with this key performance indicator?
Too many times people get carried away with data and creat 150 KPIs, which is the exact opposite of “key”.
In my opinion KPIs are only as good as the changes or decisions you make from it, so don’t have overwhelm yourself or your staff.
Second characteristic of a great key performance indicator is easily measurable.
A great example of this could be number of new customers or number of booked appointments that month.
You can easily pull up your calendar or merchant processor in order to see that.
A bad example would be the average retention of customers who got this specific email after seeing this specific ad and spoke to this specific person.
Very large companies like Facebook do this, but you don’t have the money or human capital that Facebook does.
The third characteristic of a great key performance indicator is having a target or a goal.
As I said in the beginning, numbers for numbers sake are useless.
How many of this number do you want to have by what time?
Another characteristic of a great KPI is frequency.
How often should you be reporting on this KPI and when should changes be made.
We like to report KPIs on a daily or weekly basis and make changes on a quarterly or yearly basis.
Finally, you want to measure the numbers against eachother, or as a percentage of change.
If someone says “I had 10 sales calls last week”, that can either be great (if the week before they had 0) or terrible (if the week before they had 50).
Whenever someone is reporting a key performance indicator make sure they compare it to the last frequency we defined above.
I’ll list off some of my scorecard KPIs I have my team report to me on a daily or weekly basis:
Number of new leads generated this week, last week. Number of appointments booked. Number of appointments taken. Number of deals closed. Total cash collected. Number of support tickets. Number of complaints. Number of new virtual assistants being trained. Number of fully-trained virtual assistants.
I challenge you to write down some of your companies KPIs right now, making sure they have the characteristics above, and start using them and making decisions for your business based on them.
Become The Entrepreneur You Always Wanted To Be
[00:00:00] What’s going on, everyone? I’m Ravi Abuvala, founder of Scaling with Systems. And in this video, I’m gonna be talking to you about what key performance indicators are, how to track them and measure them inside of your business, and why they are of the utmost importance in order for you to scale. So keep your eyes or key performance indicators are the lifeblood of any sort of tracking you’re going to do inside of your business. The very most powerful CEOs in the world admit to having what’s known as a scorecard, like a baseball scorecard of 10 to 12 KPI so they can check on a daily, weekly or monthly basis and they will know the exact health of their company and if they’re moving up or falling down. So that being said, let’s talk about what is a KPI? What makes a KPI Great. And then some specific examples of KPI is that I personally keep on my scorecard for my seven figure businesses. So what is a KPI? A KPI is the key performance indicator. And the idea behind it is just that it is the key. So one of the main things you need to look at to understand how the performance of something is going. So you should look at this number and understand whether something is working or not working or understand if you should be spending more time in this area or leaving this area alone.
[00:01:09] Some really popular examples of KPI can be number of cashed collected this month, first number of cash collected last month or number of refunds we had this month versus number of refunds we had last month. So what are some characteristics of some really great KPI inside of your company? So first and foremost, you need to figure out what exactly are you planning on doing with this KPI? A lot of people love to just use data for data sake or create key performance indicators for keep hormone’s indicators sake. And they end up having 30, 40, 50 key performance indicators when in reality none of them are now key anymore because there’s 30 or 50 of them. Data is really only as good as the decisions as you make from it. So make sure you don’t overwhelm yourself in this exercise by creating 50 different numbers that you look at, because it’s not going to really let you know what’s working. It’s what’s not working, and it’s going to let you create decisions or make decisions in your company based on this data. The second characteristic of a great key performance indicator is it’s easily measurable.
[00:02:06] Some examples of easily measurable key performance indicators could be number of booked appointments that we have this week or a number of new customers that we sold this month. You can easily look in your calendar or your merchant processor and figure out what that number is. On the flip side, a more difficult key performance indicator that’s not that measurable could be what is the average retention of a customer who sees this sort of email after landing on this sort of page and talking to this person. Now, while some of the largest companies in the world, like Facebook, actually do two split tests and figure out keep a woman’s indicators based on that granular level of insights, I don’t recommend you do it because you don’t have the assets or the human capital that Facebook does. And so we want to make sure the numbers that we’re using are just really easy to calculate or find. The third characteristic of a great KPI is making sure that is tied to some sort of target or goal. As I said at the beginning, just having data or numbers for data or numbers sake is useless.
[00:03:00] You should be leveraging KPI to say, hey, we have three new clients this month and I want 10 by the end of the month. Or how many of this number do you one. And by what time do you want it? Another key characteristic of a great KPI is frequency. How often should you or your employees be reporting on this KPI and how frequent should changes be made on it inside of our company? And what we teach our clients is getting with systems is we should really be looking at KPI eyes on a daily or weekly basis and we’re making decisions based on those KPI eyes on a monthly or quarterly basis. So, for example, if we’re trying a new lead generation channel out, let’s say email and we’re figuring out that in the first few days or first week, it’s not really fruitful. There’s not too many booked appointments from it or I’m not going to end it at the end of that first week because I am, although I’m reporting on it, understanding it on a daily or weekly basis. I’m really only making decisions on a monthly or quarterly basis. So I make sure there’s enough data in there for me to make an accurate judgment. The final characteristic of a really great CPI is making sure that you’re measuring them against something else as a percentage of change, using the characteristics above. Let’s say that we’re just trying to figure out how many sales calls our sales reps are taking on a daily basis. It’s definitely a key number we do know inside of our company. It’s easily measurable.
[00:04:17] My sales guys do have goals of hitting a certain amount of sales calls on a daily basis. And we’re going to know it or learn it or check on it every single week to see where they’re at. Now, if my sales rep came to me and said, hey, on average, I had two sales calls a day this week. Well, if I just looked at that number of loan, I could be like, oh, great, that’s awesome. Or I could be like, oh, no, that’s terrible. And the reason is I don’t have anything to compare it to. If last week the rep only had one sales call per day and this week he has two sales calls per day, that is an improvement and that actually is good. If, however, last week the rep on average had eight sales calls a day and now he has two sales calls a day, that’s a lot worse and that’s bad. So make sure for your key performance indicators. Whenever you’re reviewing them, you make sure you’re. Team or you puts them next to the last previous week, the previous month or the previous period. So, you know, are you improving or are you going down in your performance? Not really quick.
[00:05:10] They’re going to list off some of the KP eyes that I track on my scorecard as a CEO of both my companies, some of the ones we look at, our number of new generated this week versus last week, number of appointments booked this week versus last week, number of appointments taken this week versus last week. Number of deals closed this week versus last week. Number of cat or total cash collected this week versus last week. Number of support tickets that we had sent to our support ticket CRM this week versus last week. Number of complaints from those support tickets. We had sense this week versus last week. For us specifically, we care about number of new virtual assistants being trained every single week versus number of new verticals isn’t being trained last week.
[00:05:51] And then finally, number of fully trained, available virtual citizens that have gone through our training and are ready to work with our clients versus that same number. Last week, I shall challenge everyone watching this video to write down three or four KPI that you can look at inside of your business and then go back two to three months in the past and figure out are you improving from those numbers or actually are you going down in those numbers? This will help you make accurate decisions on what you should do for a new lead generation channel’s new product for services or maybe even hiring or firing employees. If you guys want some more training around scaling your company to seven figures, what kind of lead generation channels you should be using? How to craft your messaging? What kind of assets you should have? Your pricing or your product and market fit. I want to invite you to click the link in the description below and you’ll get access to my free three. Such a scale course. That’s about six and a half hours worth of content, totally free that you can use and consume in order to take action on some of these things today. Finally, have you guys got some value out of this video? I always invite you to give it a thumbs up, makes you hit the subscribe button below and turn on the notification bell and maybe share it with somebody else that, you know, needs to have some key performance indicators inside their company. Finally, be sure to check out some of the additional videos that I have on the screen in front of you here, as they will help you better understand the steps you need to take in order to grow your company. I’ll talk to guys very soon.