Tracking KPIs (key performance indicators) is critical for any process driven business. If you are business like ours that offers fixed-fee support – tracking your numbers becomes even more critical so a small hole in the bucket doesn’t end up tanking your month (or year).
When deriving KPIs there is a ton of noise in every industry about what to track. Quickbooks has an article that highlights their ‘7 Most Important KPIs to track as Small Business‘ that include;
- Cash flow forecast
- Gross Profit Margin as a Percentage of Sales
- Funnel Drop-Off Rate
- Revenue Growth Rate
- Inventory Turnover
- Accounts Payable Turnover
- Relative Market Share
I would first argue that Relative Market Share is darn near impossible for a small business to truly get a handle on and should probably be lopped off the list – making 6!
Aside from that – all these KPIs share one thing in common – they are all inwardly focused, in my words – they are selfish! They all focus on the internal workings of the company and pay no mind to the mission/vision the company has, ex: why they exists aside from making money.
While the typical inwardly focused KPIs are indeed important (I’m not suggesting you should abandon these tried and true measures of business success) there must be a few KPIs that give you some indication of how you are delivering on your mission and how you are impacting your clients.
Here is an example – in our business (we do IT support / Managed Services) one component of our mission statement is to increase productivity for our customers. On the surface, this would seem like an impossible metric to track – how can we possibly measure how productive a customer’s business is?
Simple – we focus on the things where we interact with a customers business that detract from productivity – in our industry that is reactive support; the “it used to work and now it doesn’t” type of tickets that suck time away from more important tasks.
By normalizing the number of reactive issues we received across our customer base (we normalize by employee count) you can get a metric that demonstrates how ‘un-productive’ our clients are due to IT issues then work to drive this number down through our process.
So – add a few ‘customer facing’ KPIs to your dashboard so you can move the needle on your customer’s experience. Here are few ideas;
- Customer satisfaction (through surveys and feedback)
- Repeat customers as a percentage of total customers