The use of data in every business is becoming a fundamental decision maker. Every project manager will have a range of KPIs they are tracking and depending on the size of the company these KPIs may be measured by project, campaign or department. Each manager monitors their KPIs and reports to the executive management. The executive management then wants a collaborated view, they don't need to know the specifics of each project/campaign, they just need to know how the department's efforts are helping to reach the company's objectives.
A study by McKinsey & Company found that “senior leader involvement and organizational structure plays a critical role in how effective (or not) a company’s use of analytics are". KPI reporting at an executive level is important to guide a business on its journey towards reaching its strategic goals, and an essential guide so that every employee knows what his or her contribution should be.
Low level KPIs may focus on metrics like estimation times, process improvement, cost per lead, customer value and quote to close ratio. On the other hand with High level KPIs they focus on the overall performance of the company with a focus on growth and financial value. Below are 5 KPIs we believe every executive meeting should report on:
This measures the profit generation based on how much revenue is brought in. Profit generation is a financial benefit that is realised when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity. Dependent on where the business is in its life cycle, the net profit is a crucial KPI to keep track of and ensure an upwards trend.
Cost of Customer Acquisition
This gives you insight into the cost of acquiring new customers. This calculates all the costs spent on acquiring new customers as well as salaries, marketing, sales and other headcount related expenses and dividing this by the number of customers acquired in that particular period. This cost is crucial to understanding the investment needed for your growth. If your customer acquisition costs is greater than your revenue for a long period of time then, well, you'll go bust.
Net promoter score
This is used to measure the levels of satisfaction and loyalty of customers. For customer retention purposes it is important to calculate the likelihood of your customer reusing or continuing to use your service/product. A question can be asked in a feedback form, for example 'How likely are you to recommend this product/service to a friend?". The question is answered on a scale basis, each measuring a particular type of customer from a detractor to passive to promoter. You want to calculate the promoters minus detractors and then divide by total respondents. A positive score means your customers are engaged whereas a negative score means that your customers are not happy and probably will not recommend your product/service.
Employee Churn Rate
If you are part of a large enterprise with a large staff force the employee churn rate will be important to track as a high staff turnover will slow down projects and creates higher costs for the company in the long run, especially if there is a large investment in training. The Employee churn rate focuses on the number of team members who have left a company. This can have a negative domino effect in staff hiring, company image and CSR campaigns.
Return of Investment
The return of Investment or ROI evaluates the efficiency of an investment or a number of different investments. This is particularly important for start ups or those who are seeking investment. ROI can be used as a rudimentary gauge of an investment's profitability. ROI can also measure the financial worth of a project, giving the executive board more of an insight into whether a project will result in a payback for the company or client.
We understand the importance of seeing the bigger picture. It is vital to see how various departments interlink in order to implement a data-centric approach on a collaborative strategy. ServiceClarity executive reporting integrates across all departments to provide real-time KPI reporting. If you want to find out more, just click the bright boxes below!
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