If you’re a regular reader of this blog, you’ll know that using KPIs to drive real improvements in business outcomes is a passion of mine. Metrics have always been important to me.
However, in the last few years in particular, I’ve been investigating how various organisations use KPIs (and when they don’t). I’ve also studied the behaviours and cultures around KPI usage, and strategies for their implementation. And I’ve seen some ineffective strategies around.
Looking at the entire sales chain
Quite often, I’ve seen businesses use metrics to measure targets, such as profitability, stock return rates and staff retention, without considering the metrics that might drive those outcomes.
To me, this shows a lack of understanding about how to develop effective business strategies—strategies that have structure and forethought likely to produce the intended income as opposed to just a measure of the result.
For example, the process of measuring sales outcomes is quite well defined. Yes, everybody looks at sales revenue and net profit. However, we analyse the entire sales chain.
Savvy managers also look at metrics such as the number of leads generated, conversion rates, time to close etc. By using this well-defined business process, professionals have learned to measure the metrics that drive the outcome, not just the outcome itself.
Unfortunately, I don’t always see this type of methodology used elsewhere.
How metrics drive your stock returns
Let’s look at another example—stock returns. Anyone who sells merchandise knows there’s a high cost associated with returned stock. In some industries, a single returned item might cost the organisation the equivalent margin of 10 or more sales!
So let’s think about the types of metrics that might drive a particular stock return level.
- the wrong products are being shipped
- the addresses are incorrect
- the products have a higher-than-expected failure rate
- the products aren’t meeting the customer’s expectations.
Depending on the product, dozens of factors could be driving a high or low return rate. Yet many organisations don’t monitor these metrics effectively enough to determine the core causes or, just as importantly, help them drive change.
Another example is staff retention rates. However, I’ve saved this one for next week’s article, so keep an eye out for it.
What’s your strategy?
If you want to improve your organisation’s performance, you need to start developing a strategy to improve it and, of course, measure it. Because any strategy without metrics is usually ineffective.
Just a few things for you to think about…
Excited early adopters
Having produced a product that helps businesses measure and manage their KPIs, I’ve gained a lot of insight into how different businesses use KPIs. And I’ve seen some businesses get pretty excited once they start measuring them.
A few years ago, my other business, Direct Marketing Software, implemented an online fundraising system for the Far North Queensland Hospital Foundation (FNQHF). It was a completely automated system that enabled people to sign up and set themselves a fundraising challenge. Then they used social media, email and other techniques to sign up friends and colleagues who set their own challenges and/or offered financial support.
The day after the website went live, I arrived in Cairns to train their staff in the system. By the time I got there, they’d already signed up nearly 100 fundraisers and raised more than $6000. It had all been done automatically by the website, and the money had already been receipted, cleared and deposited in the bank account. Go team!
Additionally, by the time I got there, the staff had worked out how to to use the software’s reporting tools to see how many people had signed up and how much revenue had been raised.
Throughout the day, my training was regularly interrupted by operators surreptitiously logging into the system to check out how much money they’d raised now and then…now and then…and now!
With this enthusiasm for KPI monitoring, it made sense that the FNQHF became one of the first businesses to adopt Bizeo. They love that they can see their figures where they’re in the office, as well as on their mobile phone, tablet and home PC.
However, more recently, I’ve discovered another group of people who love having current stats available to them 24/7 – event managers.
Event registration – the all-important KPI
Events live or die by one just KPI – how many people have registered. In event management, most marketing, venue and staff costs are relatively fixed, so event registration is the one variable that uniquely determines an event’s success or failure.
Event managers want to track what happens to registrations after every email blast, piece of PR in the paper and blog post. It’s a fixation for them and rightly so!
Of course, you can often go into your event management software and run a report or access a dashboard somewhere. But these simple KPIs aren’t always readily available; you have to access the system, log in, navigate the menus and run the report.
What if you run lots of events simultaneously? Imagine keeping track of all those registrations!
Why event managers love Bizeo
Bizeo ensures that it’s very simple for you to track this all-important KPI – and access it from your smartphone 24/7. You can also set Bizeo to alert you when you achieve a certain attendance level (e.g. breakeven or maximum attendance level).
Finally, there’s another great advantage of Bizeo – while you’re fixating on that one KPI, Bizeo is quietly monitoring all the other KPIs around your business. It tracks every system and location, only interrupting your busy day if something isn’t right.
Every event manager I’ve shown it to loves the idea and many are already using it. You can still use Bizeo for free for an unlimited time, so you can just try it for your next event and let me know how you go.
P.S. If we don’t have a package available for your particular event management system, let us know and we’ll see what we can do.