Your KPIs Aren’t My KPIs

Your key performance indicators aren’t my key performance indicators. The activities and outcomes that might indicate that you are moving towards success can be wildly different from mine.

Different Strategies

Your strategy might be to increase your revenue. New revenue might be an excellent indicator for proving that you are on course. If that is your strategic goal, then that is a significant key performance indicator, even if it is a lagging indicator.

But let’s pretend that my strategy is to increase my margin. Revenue isn’t a good indicator for me. Of course, I am going to look at that number! But margin growth is a better indicator for me as to how I am progressing towards my strategic goals. In my case, I might trade higher margin business with lower revenue growth.

Different Activity

You might need very high activity when it comes to prospecting. You might need high activity because you don’t presently have enough. Or maybe it is because you are a startup, and customer acquisition is the key to profitability (and just maybe you are smart enough not to look at your burn rate to determine how well you are doing). The outcome of new opportunities created is an excellent indicator as to how you are doing.

I might need less activity because I am focused on acquiring strategic accounts and because that is the only real way for me to reach my goals. For some businesses, smaller transactional clients don’t produce the necessary results and only divert attention from acquiring dream clients. I might take less activity for more concrete outcomes, like meetings with strategic prospects.

Different Needs

Your company and my company might have very different needs. What you measure should be important to what you need to grow and improve your business. What I should measure should ensure my company’s growth and my improvement.

Different businesses have different needs. And they have different needs at different times. You need to make your KPIs your own, whether they are activity or outcome metrics.

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Filed under: Sales

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