Why implement KPIs for decision making in your company?
Surely if you are looking for a way to support yourself in marketing strategies to boost your company, you have ever heard of KPIs or Key Performance Indicators (key performance indicators), a series of business metrics that are used to evaluate crucial factors for success. of a business. These indicators play a vital role in properly developing a strategy in any organization.
In the words of Lucia Lopez , director of branding of Makro Spain and Portugal , digital KPIs are more immediate and useful to measure the success or failure of an action, to rely on it to taking decisions . However, according to Ken Koenemann , Vice President of Technology and Supply Chain North America, for KPIs to be effective, they need to belong to a robust process that includes a detailed work plan to transform high-level objectives into something meaningful. at every level of the company.
In short, KPIs give the entire team a clear vision of what is important and what needs to be done. Having these indicators ensures that each employee will do what is necessary to meet or exceed their goals.
Characteristics of strategic KPIs
Now, in order to define KPIs and be successful with this trend in companies, it is necessary to take into account certain characteristics, since a KPI only has value for the action it inspires.
We share some of those qualities that key performance indicators should have to deliver successful results to organizations:
- Define objectives: Before being able to start with the KPIs strategy, it is necessary for organizations to be clear about their objectives , how they could achieve them and who can act to meet each of them. (Ex: Achieve one million sales through the online channel at the end of one year)
- Clear and concise: KPIs are a form of communication, so the clearer and more relevant the information is, the easier it can be incorporated and the more likely it will generate an action. (Ex: The main online shopping customers should be prospects from email marketing campaigns and activations on social networks)
- Quantifiable: The indicator must be able to be measured in numbers, because for example, the mood of the workers is important for the company, but it is very difficult to measure in numbers, so it could not be considered as KPI. Remember that KPIs must be measured very frequently.
- Correlative: The indicators should be related to each other to lead to obtaining the type of results that are desired in the company.
- Attributable: Each of the key performance indicators must be attributable to someone who is directly responsible. KPIs require commitment and responsibility from both managers and middle managers or even other professionals without a subordinate. Likewise, they can be used as a powerful tool associated with variable compensation.
- They must have a positive impact: Remember that KPIs always promote actions that have a positive impact on the performance of the company . Avoid situations in which a poorly defined metric causes dysfunctional behaviors in the organization.
- Comparable: All defined KPIs must have the same importance for the organization, so that there is no hierarchy between them.
The benefits of strategic KPIs
A good marketing strategy could not be defined without the use of KPIs that make it possible to measure and quantify what is really relevant and control deviations from the objectives set. This can be considered as the main benefit of this trend, without forgetting topics such as the following:
- They favor the understanding of the error and the success of the organization.
- They offer the possibility of applying corrective actions in the event of possible deviation from a company’s objectives.
- It offers a control and monitoring system of the actions launched and the work carried out.
- They help to learn and improve business and marketing decision-making.
