A company needs to define the KPIs that best tell its tale from a strategic standpoint. Consultants advise starting with buckets like financial performance, customer satisfaction, operational performance, marketing effectiveness and employee performance. Then, they can devise a set of pertinent KPIs within each of these buckets.
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This winnowing process depends on the type of business a company is in, its strategic goals and the various tactics pursued to achieve these objectives. In the “financial performance” bucket, a company may want to measure net profit, gross profit margin, economic value added, return on assets and the cash-conversion cycle. To gauge the success of “marketing efforts,” KPIs like conversion rate, cost per lead, market share and website page views may provide the answers. To ascertain “employee performance,” revenue per employee, average employee tenure and employee engagement scores may provide the insight.
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