What is KPI and how to calculate performance indicators
Posted: Sat Dec 28, 2024 4:58 am
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Key Performance Indicators, or KPIs, are key performance indicators that reflect the results of any activity. In simple terms, KPIs allow you to measure success in numbers or percentages. In business and marketing, they analyze the number of site visits, applications, sales, cost of a lead and deal, average check, and other metrics.
In this article, we talk about why KPI indicators are needed, how they are measured, and how to implement them in a company.
Content
What are KPIs used for?
Types of KPI in Marketing
How to Develop and Implement KPIs for Employees
Pros and cons of the KPI system
Pros and cons of the KPI system
What are KPIs used for?
The KPI system allows you to solve various business problems.
Assortment optimization
Based on KPIs, conclusions are made about the dynamics of demand depending on the season and other factors, and the most popular goods or services among buyers are identified. This information helps to adjust the assortment and increase profits.
Example. A board game store sold three games: Monopoly, dominoes, and chess. All games were purchased in equal proportions. However, sales and profit analysis showed that Monopoly brought in 50% of revenue, while the usage of facebook database dominoes and chess brought in only 25% each. This meant that it was worth purchasing more Monopoly games and reducing the share of other goods.
Analysis of work processes and results
It is important to track not only current figures, but also compare them with similar indicators for other periods. This allows you to test new promotion strategies and identify shortcomings in work processes.
Build reports and dashboards in one window
— Campaign indicators in VK, MyTarget, Yandex
— Automatic data update every day
— Ready-made forms for quick immersion
Find out more
one-spot
Example. A developer selling residential real estate in a new microdistrict of Moscow decided to change its promotion strategy: the marketing department launched new advertising campaigns on social networks and reworked the scripts for sales managers. KPIs showed that the number of applications for the purchase of apartments increased, but sales decreased. This means that the campaign on social networks works as intended, but the script for managers needs to be changed.
VK Icon
OK Icon
WhatsApp Icon
Viber Icon
Key Performance Indicators, or KPIs, are key performance indicators that reflect the results of any activity. In simple terms, KPIs allow you to measure success in numbers or percentages. In business and marketing, they analyze the number of site visits, applications, sales, cost of a lead and deal, average check, and other metrics.
In this article, we talk about why KPI indicators are needed, how they are measured, and how to implement them in a company.
Content
What are KPIs used for?
Types of KPI in Marketing
How to Develop and Implement KPIs for Employees
Pros and cons of the KPI system
Pros and cons of the KPI system
What are KPIs used for?
The KPI system allows you to solve various business problems.
Assortment optimization
Based on KPIs, conclusions are made about the dynamics of demand depending on the season and other factors, and the most popular goods or services among buyers are identified. This information helps to adjust the assortment and increase profits.
Example. A board game store sold three games: Monopoly, dominoes, and chess. All games were purchased in equal proportions. However, sales and profit analysis showed that Monopoly brought in 50% of revenue, while the usage of facebook database dominoes and chess brought in only 25% each. This meant that it was worth purchasing more Monopoly games and reducing the share of other goods.
Analysis of work processes and results
It is important to track not only current figures, but also compare them with similar indicators for other periods. This allows you to test new promotion strategies and identify shortcomings in work processes.
Build reports and dashboards in one window
— Campaign indicators in VK, MyTarget, Yandex
— Automatic data update every day
— Ready-made forms for quick immersion
Find out more
one-spot
Example. A developer selling residential real estate in a new microdistrict of Moscow decided to change its promotion strategy: the marketing department launched new advertising campaigns on social networks and reworked the scripts for sales managers. KPIs showed that the number of applications for the purchase of apartments increased, but sales decreased. This means that the campaign on social networks works as intended, but the script for managers needs to be changed.