How to Pick Useful KPIs and Beat Your Competitors

2018-01-05

No you can’t simply follow the crowd. Not even the professionals you admire so much.

Even in a competitive service providing environment each company is unique. What sets you apart?

Being unique means you can’t measure your success in the same manner competitors do. While you all vie for the same customers you’re not identical.

Why Are KPIs Important?

KPIs aren’t business fads with no real purpose. You need them to measure your unique definition of success.

What must the Future look like?
You don’t start a business for the fun of it. The time and effort you put in must help you reach a few goals:

• Business goals: Perhaps you’re motivated to transform a certain sphere of business. Alternatively you saw a gap in the market you know you can fill. You have an end result in mind which can be seen as the company’s vision.
• Personal goals: Your business may be funding other dreams such as funding your personal goals. Do you want to travel or purchase your dream car?

Key Performance Indicators help you see if you’re being successful in areas that matter to you. What in your business needs improvement? Making these adjustments will help you reach goals faster.

Keeping to the Plan
It’s easy to get side tracked. A lucrative business option may come along and you pursue it for profit reasons.
But is this really what you want to do? Is it beneficial for your personal and business goals?
A KPI can help you make decisions so all your actions align with your plans.

Becoming the Best

• If you want to become an expert you must measure yourself:
• Are you a good employer?
• Is your business growing?
• What do customers think of you?

KPI’s that help you measure these aspects empower you. Never see it as criticism. It’s about finding pitfalls so you—and your business—can improve and become the best.

Picking Your KPIs
But you can’t simply pick random KPIs.
So let’s see how you can find relevant KPIs.

1. Think About Goals

As stated above you must always keep your goals in mind:

• What must the business achieve?
• Where do you want the business to have influence?
• What must the business be for its clients AND employees?
• Which target audience do you want to engage with?

Each KPI you pick must align with an aspect of your mission statement.
It’s easy to pick an easily measurable KPI and even feel good about your business. In the modern business world everyone seems to measure success by the number of likes they get on Facebook.
But does this relate to any part of your business goals? What if your target audience are elderly people who don’t use modern technology? You’ll rarely get a social media like. But this will be a good thing. It means you’re engaging with them elsewhere. But then Facebook likes can’t be a Key Performance Indicator.
What type of results are relevant to your company? Only focus on these KPIs if you want to improve.

2. Think About Customers

Most businesses are dependent on customer satisfaction.
You must measure your relations with customers. This empowers you to improve on:

• Customer service
• Product development
• Marketing campaigns

In picking KPIs you can’t simply think of how amazing your product line is. You’ll only reach your goals if clients love the items—and your company—too.
Can you see how a KPI must be traced back to original company goals? Here it’s all about making profit by enlarging your customer base.

You can measure:

• Whether customers promote you elsewhere
• Whether customers return for more service
• Whether customers are happy with your service

Using these types of KPIs show you where improvement is necessary.

3. Think About Competitors

You want to be better than competitors right?
When do you know you’ve reached this goal?
KPIs relating to your competitors show you how you compare with them:

• Is your packaging attracting more clients than theirs?
• Do people find your rate of feedback better than other service providers?
• Are your workers more skilled than other field workers?

Questionnaires can supply you with information to show you your rating in the market:

• In which areas are you an expert?
• What are your competitors doing better than you?

Measure your impact, find problems and adjust.
Once again this kind of KPI helps you determine how your company must improve to reach your goals. Your rating won’t improve simply because you work hard. You must make changes and improvements to get ahead.

4. Think About Marketing

Marketing is useless if you don’t have feedback.
Your feedback channels are excellent sources of information. The result can become KPIs:

• Are ads drawing the right people’s attention?
• What is your return on investment?
• Are you performing well enough so you’ll reach your target profit margins?

It’s essential you put methods in place to measure your marketing’s impact. If you don’t have data to work with you can’t determine the facts about your influence.

5. Think About Employees

How important are your employees?
Without indicators telling you how happy they are you’ll probably lose them. For service providers this can be detrimental to a company’s success:

• You don’t want employees talking negatively about you on site since it may influence clients.
• You don’t want unnecessary expenses of training new employees.
• You don’t want unhappy employees delivering sub standard work.

You won’t know about their problems if you don’t measure your impact on employees.
If your employee KPIs—such as Employee Turnover Rate—show you there’s a challenge you can take action before the problem escalates.
KPIs regarding employees are directly related to reaching your goals as a service provider. Why? Because you can’t deliver services without your workers.
Can you see how important it is to pick relevant KPIs?

6. Think About the Past and Future

You won’t get all your answers from looking at the past. A successful business uses current data too.
You work with:

• Lagging indicators: They measure the outcome of your company’s actions. Your financial statements serve as a KPI of your financial success in the past month or year.
• Leading indicators: They show details about activities you can change now. You can measure how fast your field workers handle a job. You can show them how to do certain jobs faster so this timeline shrinks.

This is how you become pro-active.

7. It’s About Focus and Specifics

Focus
You can’t transform your entire business overnight. If you try doing too much you may:

• Get frustrated at all you see is wrong. Where do you start?
• Burn out your employees because you ask too much of them.

Prioritise the KPIs you find relevant but most important too.
When you can focus on specific areas you’ll implement results fast. When you’ve reached a goal you can move onto another aspect.

Specifics
When you pick KPIs try to keep to specifics. Guessing an indicator’s results is subjective and even frustrating. You don’t know if you’re moving in the right direction. Here’s an example. Don’t simply ask if customers are happy with the services you provide. Break it down into qualitative aspects that will give you specific goals to work towards:/

• Do you respond fast enough?
• Are they happy with the quality of parts?
• Do employees greet them friendly?

These answers can all be answered with ratings or a clear Yes/No answer. These definite answers can be quantified so you determine what customers have a problem with most.
Now you know what to do to improve their experiences too. KPIs must lead to action.

8. Does it Drive Action?

If it doesn’t tell you what to do don’t measure it.
KPI results must show you what actions you can take to improve your business. It’s not about knowing more about your business. It’s about knowing what ACTIONS to take.

9. Think About the Industry

An excellent guideline to search for KPIs is to look at what’s important in your industry. In service providing measure what you have in common:

• Number of workers
• Number of calls you can attend to daily
• What your turnaround time on each job is

This is quite different from managing a store. These are relevant to the field management industry and is probably what customers will use to rate your service.

How to Measure KPIs

Your methods are as important as the topics you decide to measure. How do you measure KPIs correctly?

1. Use Them From the Start

Starting up a business is already overwhelming. Do you have the courage to continually face facts? But you must now how well you’re providing services to clients.
Make KPIs part of your original business plan. It’s the best way to stay in control.
Measuring and using KPIs to make decisions will:

• Keep decisions in line with your original goal
• Show you what to do when you realize your business needs improvement

It’s not simply a smart business tool. It’s how you protect your business from going under.
If you already have a business gather data. Invest in financial advisors, customer questionnaires and business analysts to determine how you’re currently faring.
This is your first batch of data. Now keep on looking at the indicators and build your business faster than before.

2. Invest in Software

The good news is you don’t have to do much of the work yourself. The business world is flooded with software and apps that make work easier and faster.
Measuring KPIs is no different.
This calls for an initial capital expense. How it empowers you is already a return on investment.
The benefits are vast:

• Software tracks and processes data so you don’t have to waste time doing it manually.
• If the results can be viewed by all employees it can serve to motivate them to improve.

In a modern world you must apply technology to get ahead in your field.

3. Quantitative vs Qualitative Measures

Can you accurately measure all the KPIs you’ve picked?
Your most accurate feedback will come from quantitative KPIs where data shows you what to do.
But in the service providing field especially qualitative measures must also be considered:

• You can’t measure your employees’ level of communication with customers but it determines clients’ experiences.
• You can’t measure how well a team works together but it determines their timelines.
• You can’t put a number to someone’s leadership skills but you must know someone will take charge on site.

Interpersonal and other soft skills are essential to the company’s success. Both field managers and workers should improve these skills.
This makes it an important KPI.
Don’t be alarmed if what you find important can’t be translated into numbers. As a business leader your instinct plays an important role. You’re allowed to trust it.
Here’s what you do:

• Create clear guidelines about your expectations.
• Communicate guidelines so employees are aware and don’t feel victimized when it’s discussed later on.
• Observe employees in their tasks and make deductions about their competence. This is only a subjective opinion but is a KPI you can use.
• Discuss the matter with the employee to garner his or her subjective opinion too.
• Plan together how the qualitative measure can be improved such as doing training.

Regular discussions and feedback are essentials when it comes to qualitative measures. Since you’re not working with facts you must prevent any misunderstandings.

I hope you’re ready to be challenged. KPIs mean you can no longer hide from the truth about your business. But don’t waste time on the wrong facts. Using the correct information will help you rise to the top. And that should be your motivation to face the hard truth. Prepare to evolve because the end result is worth it.