What you measure improves | Benefits PRO

You need to know the numbers that reflect your story and tell where it is going at the agency, departmental, and even individual levels. (Image: James Thew / stock.adobe.com)

How many of you have Key Performance Indicators (KPIs)? OK, that’s a little trick question; we all do that. KPIs are simply numbers that tell what happened or not in your company.

Can you say with certainty how much new business you have written since the beginning of the year? What about the amount of lost deals? The potential sales in your pipeline?

Kevin Trokey Kevin Trokey is a founding partner and coach at Q4intelligence in St. Louis.

Related: 5 Marketing Tips To Keep The Customer Pipeline Full

It’s shocking how few in our industry can answer these questions. Agencies have survived and kept healthy margins despite not knowing their numbers. But that’s starting to change for so many reasons. Agencies that don’t start tracking their numbers and use them to make more informed decisions will find survival a challenge.

Measure what matters

There are so many things that could be measured; You could spend time doing nothing else. We are not in favor of this, but some numbers need to be measured.

You need to know the numbers that reflect your story and tell where it is going at the agency, departmental, and even individual levels. Here are just a few KPI examples we all need to track:

  • Finance – Income / Employees. Distribution / staff. Net growth. Net profit.
  • Sales – conversion ratio. Close relationship. Average sales / customer. New business written. Active potential revenue.
  • Service – customer loyalty based on sales. Customer loyalty by number of cases.
  • Marketing – website visitors. Conversions. Generates leads. Lead scores.

We all know the old axiom: “What you can’t measure, you can’t manage”. Once you start measuring something, the likelihood that you will manage it more effectively is almost certain.

Make it personal

An agency’s struggle with KPIs is often similar to its struggle with creating processes. They make it a lot more mysterious and complicated than it should be. There are blueprints and ideas for KPIs, many of which are fairly simple calculations.

However, to fully leverage the impact of KPIs, you need to identify and track the most relevant ones for each team member. This may sound daunting, but here’s a simple exercise to do just that.

  1. For each role, identify the two or three most important results that you want to achieve.
  2. For each of these outcomes, identify the two most critical behaviors to achieve those outcomes.
  3. For each behavior, identify a quantifiable and objective method of measuring whether the behavior is occurring.
  4. That measurement is your KPI.

Accompany

Most organizational KPIs only need to be updated quarterly (some annually). However, individual KPIs should probably be tracked on a monthly basis.

KPIs alone are not magic. They have to be integrated into an organizational culture that is transparent and in which everyone is responsible for everyone. There needs to be a culture that takes action when the KPIs suggest it is necessary.

KPIs are just numbers. Numbers don’t lie.

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