What are The Most Important KPIs?

The key to success for any business is to be able to track the progress they have made. Especially for startups, analysis carry great importance to be able to take realistic steps. At the start of the best solutions for entrepreneurs come “KPI” (Key Performance Indicator). So, what is a KPI? Why is it important?

What is a Key Performance Indicator (KPI)?

KPI, is a parameter that helps a company to measure the success of a service or product through its activities. It is a viable guide for growth targets both in startups and competing companies in the industry. 

What are The Most Important KPIs?

It is possible to talk about hundreds of different KPIs considering that there are various industries and companies in the market. However, using all of them for your business would not be correct. On the contrary, too many KPI analysis can result in confusing results for your business. In order to avoid this situation, businesses usually implement five different KPIs. You can customize the KPIs for the industry you work in and make it suitable for your own brand identity. 

In order to observe the progress made in time, measurable values for KPI are important. The most preferred and most important KPIs, which we have mentioned below, can be examined both as numerical report statistics and with the help of various customer feedbacks and analyzes after a certain period of time. 

1) Sales Volume 

You should define a specific time frame to measure the sales volume. You can observe the changes in the sales volume in different time periods such as; monthly, quarterly, 6-monthly or annual periods. You can also measure the level of increase, decrease or stagnation in the performance indicator. In cases where expectations are not met, you can aim to increase the sales volume by changing the marketing techniques and advertising efforts.

2) Revenue Growth

Another KPI that is as important as sales volume is revenue growth. If the costs can be covered, the increase in revenue will be growing in direct proportion to the sales volume. You can see whether or not there is an increase in your revenue by comparing inter-period reports. If there is no increase in revenue, this points to a setback in the growing targets. In this situation, you can refer to resources with different costs. 

3) Margin of Profit 

Margin of Profit, which is one of the financial KPIs, is another important topic. At this point revenue and expenses are compared. You can identify the products or services necessary for your project, the periodic increases in these expenditures and the possible losses. In situations where margin of profit is not met it might be necessary to increase the price of the service or the product. 

4) Customer Satisfaction 

Customer-oriented KPIs are the most important measurements. In order to evaluate how your product and service is being received a customer satisfaction survey can be carried out. Especially in the internet era, the positive or negative comments that customers can make freely and with their own will, are indicators of what you can improve in your startup. 

5) Customer Continuity 

While customer satisfaction is important, it is the dream of every startup to have a loyal customer profile. Do customers always prefer you instead of buying a product or service that is similar to yours? Or do they give chances to other brands you compete with as well? Do one customer, satisfied with their purchase, recommend you to another person? All these questions are details that will always increase the acceleration in the performance chart and carry it to the set target. Knowing the answers to all these questions and finding solutions will give you an opportunity to improve your enterprise and stand out from your competitors. 

In this article we shared with you the positive effects of the concept of KPI and some of the most important KPIs. You too can make use of KPIs in your project and take your project to an even higher point. For more content on entrepreneurship keep following BTM! 

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