Having your business goals/destination in mind is the first step towards effective management. But you cannot manage what you don’t measure. Key Performance Indicators (KPIs) analytics are a vital resource for measurement, taking quantitative data analysis to the next level. KPIs represent the measurement of progress indicators, identified beforehand, toward organizational goals.
Frequent, routine review of KPIs gives you a glimpse of whether the processes are underperforming, need immediate attention, are on target, or exceeding your expectations. This information will help your leadership team make critical decisions that contribute to your company’s most important goals.
KPI analytics are typically available in mid-market CRMs, helping businesses stay on track to attack new customers, and attract new ones.
The most important categories of KPIs to watch are related to performance measurements, and can be broken down into three categories.
The information about your past business performance is vital in its right. By reviewing this information, you get a snapshot of the overall business health. For instance, when you have no closing sales today, it may imply that your product has not been performing well for months on end. If you fail to take action today, your business might as well reach a point of no return tomorrow.
Using KPIs, you can focus on your products past performance, profile your products and services’ strengths and weaknesses, reinforce on strengths, and improve on areas of weakness. They help you identify changes necessary for your business’ better performance, all while maintaining a competitive edge in your markets.
For example, sales may not be consistent. A good measurement will help you predict seasonal sales, and act accordingly. KPIs are important indicators in understanding your buyers’ behaviors over time, helping not only with stock or service issues, but also with marketing objectives in advance of high-sales seasons.
Knowing your seasonal sales also helps to reduce inventory costs. Instead of holding non-moving stock, you can always invest the capital elsewhere. Some underlying factors may drive down your sales in a particular season. For example, most companies close their stocks around the month of December. To clear their stock, they sell their products at considerably low prices.
KPIs helps you identify the particular seasons/periods the sales are low, and the possible reasons for such. If it is attributed to your key competitor clearing the stock and thus selling low, it helps you to make decisions about how to engage your markets and possibly improve your sales.
By using KPIs, you can evaluate your current position based on your sales or lack thereof, and determine a strategy to bring you closer to your goals. You not only get to know whether your sales are in line with your break-even mark, but you also get a glance of how much market share there is to capture.
Important business decisions are made using the sales figures. For instance, you get to determine whether you are in a position of meeting current supply and demand. If you are, do you have the necessary resources to deliver? What will adding orders and more work do to your quality of service? KPIs helps you answer questions like these.
KPIs, through pipeline analytics, provide a clear vision of all your business opportunities, regardless of their probability of closing. This is essential for the creation of effective sales tools, the organization of sales processes, and benchmarking of the sales team. Through KPIs, you can get within 5% forecast margin, implying that you are always aware of your current performance as well as the roadblocks and opportunities lying ahead.
Using a combination of these Key Performance Indicator categories within a CRM enables your leadership team to not only identify progress, but they also identify actions that are a priority in reference to outlining tasks for your team. KPIs are undoubtedly a vital part of CRM software, especially when businesses are measuring organizational performance.