KPIs (Key Performance Indicators)

These are measurable quantities that businesses use to assess how successfully they are achieving their main business goals.

You can think of them as the dashboard of a car or the instrument panels in an airplane. They show you the most important information about the performance and condition of the "vehicle" (your business) in real time.

Main Characteristics of Good KPIs:

• Measurable: They are always presented with numbers or percentages (e.g., 3000 new customers, 15% sales growth).
• Specific: They measure something very concrete, not a vague whole.
• Achievable: The goals associated with them are realistic.
• Relevant: Directly related to business success.
• Time-bound: They have a specific time period for achievement (e.g., month, quarter, year).

Why are KPIs Important?

• Provide Clarity: Help understand whether the business is on the right track.
• Motivate the Team: Specific goals expressed in numbers motivate more than vague instructions.
• Informed Decision Making: Instead of acting on "gut feeling," you make decisions based on data.
• Identify Problems Early: Show you where there are difficulties, before they become a crisis.

Examples of Popular KPIs in Different Areas:

For Marketing:

• Organic (Free) Search Traffic: Number of people who came to the site from Google.
• Customer Acquisition Cost (CAC): How much it costs the company to win one new customer.
• Lead Conversion Rate: What percentage of potential customers become real ones.

For Sales:

• Monthly Recurring Revenue (MRR): Stable revenue that comes from subscriptions every month.
• Lifetime Value (LTV): How much profit one customer brings for the entire period they are a customer.
• Churn Rate: What percentage of customers unsubscribe or stop buying over a given period.

For Customer Service:

• Customer Satisfaction Score (CSAT): Rating from customers after interaction (e.g., 1-5).
• Average Time to Resolve Issues: How long it takes the team to resolve a given inquiry.

For Finance:

• Net Profit: Money that remains after all expenses.
• Operating Expenses: Costs for the daily functioning of the business.
• Liquidity: The company's ability to pay its short-term obligations.

Very Important Tip:

Not all metrics are KPIs. A business can track hundreds of numbers, but KPIs are only the most important 5-10 that truly determine success. If everything is "key," then nothing is.

Example:

For a startup online store:

• KPI: Monthly sales growth of 10%.
• Simple Metric: Number of likes on social media (this is nice to know, but doesn't directly measure success).

Conclusion:

KPIs are the navigation system of your business. They show you whether you're reaching your desired destination (your goals) or moving in the wrong direction, and give you the opportunity to correct course in time.