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KPI’s the key to business growth
Implementing performance indicators at all levels of a company is a significant approach. This underlines the importance of a strategic data-oriented approach that has already been implemented.
It should be noted that there is a clear distinction between the different key performance indicators. In fact, there are organizational and strategic KPIs, financial KPIs, sales/marketing KPIs, productivity KPIs, etc. We even talk about CSR KPIs (Corporate Social Responsibility).
Furthermore, these indicators differ according to the industry and the nature of the company’s activity.
So many indicators are important to put in place to analyse the health of the company, its activity and especially its sustainability by comparing it with other structures in the same industry
It is a decision-making tool!
So, what are these KPIs? And what is their specificity?
Types of KPIs
There are several types of KPIs for company decision-makers to observe. We can organise them as follows:
- Overall productivity and organization: combine the company’s resources, time (during a specific period) and outputs (whether deliveries, services provided, etc.)
- Quality performance: this refers to the conformity of the delivered product/service to the quality standards already established between the customer and the company. Any gap/defect detected in the process that could affect the perception of the customer is considered an alarming indicator to be taken into consideration.
- Maximum company capacity: This indicator has a time specificity. It is the maximum quantity of products or services that can be delivered in each period.
- Turnover, Profitability and Revenue: This is a clear indication of commercial performance. These KPIs provide details of the turnover sources”, the products/services that generate the most revenue, the impact of the sales team, the control of profit margins, etc.
- Lead generation and other marketing activities measures the impact of the marketing efforts deployed in order to generate qualified leads after the prospecting initiated by the sales teams. The importance of this KPI come from the fact that it allows certain elements to be optimised (in terms of targeting marketing campaigns, defining the persona or even in terms of content), thus enabling the company to be closer to the leads and transform them into customers.
- Strategic performance: these indicators are related to a global, long-term vision and refer to the strategy of the entire company, its activity, future opportunities, etc. It measures broad objectives related to strategic planning.
The relevance of key performance indicators lies in the SMART approach:
Key performance indicators must reflect a reality, how? by answering the following questions:
- Is it Specific? it must identify a clear objective
- Is it Measurable? the data used must be quantifiable
- Is it Achievable? the objectives that refer to it must be attainable
- Is it Relevant? it must respect the company’s strategy and vision
- Is it Temporal? its duration must be defined (within a given period)
It should therefore be noted that the management of an organisation undeniably requires the measurement of the strategy deployed upstream.
Any decision-maker within a structure is led to achieve the growth of his company, to do this he must have clear benchmarks and be helped by performance indicators allowing him to be guided towards the course of growth.
The dashboard, the data that speaks volumes
It is the tool of every manager, the ultimate tool for steering the business. It is more than a control tool; it is an instrument that contains valuable data.
The KPIs dashboard is a visualisation of information centralised on the same screen and which gathers key data that allows the manager to evaluate and analyse the company and its activity in the broad sense and all the departments.
This visual representation helps to see the whole picture more clearly and summarises in one medium all the data previously spread over all the departments of the company.
KPIs for the retail industry
Retail is an industry that is undergoing extremely important and visible mutations that are completely changing the game. With the shift to digitalization, this sector is not immune to change. Indeed, as the current trend in retail is to develop the personalisation of the customer experience, decision-makers are facing organisational and control obstacles.
These decision-makers need a corporate dashboard to manage shops and monitor performance and customer knowledge. Managing multiple points of sale and e-commerce platforms makes the management of the business more complex and the control dimension even more important.
In the era of retail digitalization, there is an explosion of mass data on products, shops, performance in these locations, customer behaviour and conversion rates…
It is therefore necessary to centralise all this data, but especially to be able to exploit it in order to improve decision making and there is nothing better than a dedicated retail dashboard for this.
So, what are the key KPI’s to consider?
It’s important to choose performance indicators that make sense. In retail, you need to have a global visibility on the activity, on the long and short term. Having a good dashboard for your retail business allows for clear improvements in several areas.
Note that the performance indicators for retail are strategic and operational and concern customers (for a better knowledge and more refined targeting), the market (to define the positioning and to know the competitors well), profitability (to control costs, sales, loss of earnings etc. ….)
Examples of KPIs:
- Turnover and gross margin per shop
- Number of tickets per shop
- Average basket (or average transaction value)
- Number of visits per shop
- Stock turnover
Eventually, it is essential to evaluate the impact of your business. This compilation of indicators should be included in reporting tables ready for use by decision-makers.
This monitoring will support strategic decisions made by departments, general management or even within small-scale teams.
At Timsoft, we provide BI services for our customers to help them act and make the necessary decisions at the right time.
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