If you want to improve your business, tracking your metrics is essential. Your metrics give you an inside look at what’s working in your business and what needs to change. Using KPI metrics helps you create a framework for assessing the progress of your business goals.
But actually choosing the perfect KPIs for your business is a challenge. There are so many KPI metrics to choose from, and which ones are right for you depends on your unique business and needs.
Luckily, there are some factors that you should consider when choosing your KPI metrics.
What Are KPI Metrics?
KPIs (key performance indicators) are metrics you can use to track your progress toward specific goals in your business. With KPIs, you’re able to measure your performance and see how well you’re doing on achieving your goals.
Choosing KPI metrics can be a little overwhelming. Keep in mind that your KPIs should reflect what’s most impactful in your business.
To choose the perfect KPIs, you need to know exactly what goals you’re trying to achieve, and then hone in on data points aligned with those goals.
Regardless of your goals, every business owner should select and track KPI metrics. They allow you to hone your focus on the essential metrics that really impact your business.
Related: How to Get Started With KPI Tracking
What Is A KPI Metrics Report?
Once you select the perfect KPIs, you’ll need to create a KPI metrics report. This is basically a visual dashboard that you can use to track your metrics and see how you’re doing on your goals. A KPI metrics report often uses graphics, charts, and tables, and really is customizable depending on your unique needs.
When you’re tracking all of the important metrics for your business, only some of them relate to your KPIs. And that’s okay!
It’s just important to organize your data in a practical, usable way. That’s why you’ll want to consider a KPI metrics report tool—it’ll give you quick, easy-to-understand data about your goals and progress.
Types of KPIs You Can Choose From
There are so many different types of KPIs you can choose from. Each one reflects a different type of goal, and measure unique pieces of information.
Here are a few key types you should consider, depending on your business and its unique needs:
- Quantitative KPIs: number-based data
- Qualitative KPIs: Feeling-based data
- Leading KPIs: Prediction data
- Lagging KPIs: Data for past results
- Input KPIs: What’s needed to complete a project
- Process KPIs: Productivity and efficiency data
Sometimes, you’ll need a mix of these KPIs in order to really achieve your biggest business goals.
How To Choose The Right KPI Metrics
You now know what KPI metrics are, how they should be reported, and some different types.
So how do you actually choose the best KPI metrics for your business? Here are four huge tips to help you in making a decision.
Hone In On A Few Specific KPIs, Not Tons Of Them
As you start trying to select KPIs, it’s easy to get overwhelmed and select way too many. But less is more when it comes to KPIs! For the best results, you should hone in on a select few, essential metrics for your business.
When you narrow your focus, you’re less likely to get overwhelmed by all of your data. And when you’re actually able to comprehend and process all of your data, you can use it to take strategic action in your business.
There’s no set number of KPIs you should choose. But for each goal in your business, aim for two to four KPIs–that’s enough to show your progress without overwhelming you.
Focus On Your Unique Business Goals
One key part of selecting your KPI metrics is to make sure they’re directly relevant to YOUR business goals. You’ll be using your KPIs to evaluate your progress, which means everything has to be tied to your goals.
That’s why your first step is to make sure you’re super clear on what your current goals are in each area of your business. What are your biggest priorities? Where do you want to improve your performance this month, quarter, or year?
Consider Lagging and Leading KPIs
We mentioned lagging and leading KPIs above, and both of them are helpful in their own ways. Lagging indicators tell you how you did while leading indicators show you how you will do.
With lagging indicators, we’re looking at things like past monthly sales, new clients, or billable hours worked. If you’re hoping to measure results, these are super helpful—they only focus on what’s actually occurred.
Leading indicators help you predict how likely it is that you will achieve your goal in the future. These include metrics like conversion rate.
Many businesses primarily focus on lagging indicators because they’re often easier to measure…but leading indicators are so important! They help you understand what’s happening now so that you can adjust and increase your chances of success.
Make Sure To Consider Where Your Business Is Now
Another important factor in selecting KPI metrics is where your business is right now. We’re not talking about a physical location here, but rather, a stage or growth pattern.
Is your business brand new? Are you starting to peak in your numbers? Or are you entering a phase of rapid potential growth?
Every stage is different, and each stage has its own set of unique, helpful KPI metrics. For example, newer businesses often prioritize KPIs centered around early goals, but long-standing businesses have more intense goals to tie their KPIs to.
For any business, KPI metrics are powerful for evaluating your progress and strategizing to achieve your goals. If you’ve been struggling to select the perfect KPI metrics for your business, these tips will help you start the process! And remember, you can always (and should) switch up your KPI metrics over time.
What if you could create a fully customized, visually striking dashboard from scratch for all of YOUR unique KPI metrics? With our Measure & Maximize Program, you’ll be able to see all of your key metrics as you sip your first cup of coffee each day. That way, you (or your clients) can make smart, data-driven decisions instead of operating on instinct!
Remember that you don’t have to worry about defining and tracking KPIs on your own. Our Traffic Insights Dashboard is a great place to start!