KPIs: what they are, what they are for, advantages and tips on how to apply them

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KPIs are important for a successful business. It is necessary to monitor data and make decisions based on it . To have this data, you need to know what to measure and how to measure it. For this, we can use KPIs, which are performance indicators .

These indicators can be applied in all sectors of the company, and will provide inputs for management to make adjustments at specific points that are necessary for the company to achieve its results.

For each type of indicator, you will have access to real examples of it, which translates the theory into business scenarios and makes it easier to understand. In addition, it is a way for you to apply and monitor various KPIs.

Understand what KPIs are and what they are for
KPIs (Key Performance Indicators) are key indicators that measure the performance of a business. They are essential for management and indicate the level of success of the strategies defined for each area of ​​the company. This makes it possible to better manage teams .

A KPI outside of expectations indicates what management should prioritize. A high churn rate can be generated by unsatisfactory customer service and poor user experience. Therefore, to adjust this key indicator, what can be done is to improve customer service and adjust the product to offer a better experience.

General metrics
KPI metrics can be measured quantitatively or qualitatively. These metrics are important to determine whether defined objectives are being achieved or to indicate what needs to be adjusted.

Some general metrics include churn rate, MRR (Monthly Recurring Revenue), and Cash Flow. MRR indicates the monthly revenue that the company will have, based on existing contracts. This indicator is measured in companies that offer products in the form of a recurring subscription, such as SaaS (Software as a Service).

Specific metrics
Specific metrics are directly related to the strategy that the company sweden telemarketing data wants to measure, monitor and evolve. They should be selected according to the area of ​​the company. Each area will have its specific needs and consequently different KPIs.

In HR, we can have a KPI for turnover, which is turnover. It measures the rate at which employees leave or are replaced over a period of time. It can indicate employee dissatisfaction and the difficulty the company has in retaining talent.

KPIs: main advantages of using them
Two professionals, a man and a woman, in a meeting analyzing the KPIs presented in reports on the computer. Above, a hologram image of graphs and data.

Below we will list several advantages that a company can obtain by using KPIs. The first of these is increased efficiency , as the company will provide clear goals to strive for. Employees who know what they need to achieve tend to be more active and assertive at work.

The second advantage of using indicators is that the company will improve its ability to make decisions based on data. This will make the path to be followed clear, and consequently the actions necessary for the overall evolution of the business.

Ensuring that the entire company is working towards the same goals is a challenging task. By using KPIs, the company can define a single path for the entire business and reflect this decision through goals for its employees. This way, everyone will be moving towards the same result.

Using indicators actively can also save resources. The analysis of the indicators selected for the business will show how the budget should be applied correctly. Consequently, it is expected that there will be a reduction in expenses.

KPIs: get to know the main performance indicators
There are several KPIs that can be applied to a business. Defining which indicators are most important will depend on each company's goals. For a business that considers customer success to be the most important, it is recommended to measure the Net Promoter Score (NPS) and the Customer Satisfaction Score (CSAT).

Capacity indicators
Capacity indicators are responsible for measuring the time needed to produce a certain quantity of a product. If we analyze the service area, we can observe how many customers a salesperson can serve in an hour or how many products a company manufactures per month, for example.

If a company's customers are requesting a lot of technical visits from its employees, it may indicate some kind of failure in the product provided. Monitoring this metric will give HR the necessary input to define how many employees are needed per shift so that no customer is left without timely service.

Productivity indicators
Productivity indicators compare what was produced by the company with the resources used in that production. By analyzing the amount of inputs needed to produce a given product, it is possible to determine how much is needed to produce one unit of the product or service.

We can determine the operational excellence of an industry by monitoring the units produced without failures, the capacity to meet demand and the efficient use of resources. Always correcting operational failures to increase the quality of processes and consequently productivity .