Business Metrics Worth Measuring

Managers love to measure the KPIs of staff. Some managers use KPIs for discipline. Others use KPIs as an ongoing measurement tool to verify and validate progress. But managers would do well to measure some of the ratios on decisions they have previously made. For example:

  • Customer complaints: for every sale that is made, how many customers made a complaint about the product, service, quality, reliability, etc?
  • Employee profit: for every staff member, how much profit does your organisation generate?
  • Advertising direct revenues: for every dollar that is spent on advertising, how much revenue do you generate that can be directly attributed to that advertising?

Measuring these three KPIs can provide specific information on key indicators for success. Making sales is great. But if your ratio of complaints to sales is high, you may be perpetuating negative sentiment in the marketplace that will ultimately lead to decline. Generating organisation profit is vital. But ensuring efficiency in productivity of staff members in direct proportion to profit is a clear indicator of employee value. Many managers confuse advertising. Advertising is a follower, not a leader. Increasing investment in advertising without ascertaining the direct return on sales could see an organisation overspend on an expense item.

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