A key performance indicator (KPI) is an essential metric or statistic that indicates how well your company is performing in relation to the standard set of business objectives that most companies pursue, such as sales, profitability, popularity, and growth. While these stats paint a very clear picture about where a company stands and where it might be headed, it is an unfortunate fact that many small businesses have started using a KPI software to simplify the process of monitoring these metrics on an ongoing basis. By ignoring the most crucial quantifiable factors that contribute to your brand’s success, you’re essentially guaranteeing that you won’t see optimal results in any category. Additionally, here are eight specific reasons why every business should be tracking their KPIs diligently:
1. Attracting Investors
Let’s face it, the fastest way to raise millions for a company is to convince wealthy investors that your brand is worth investing in. You’ve probably seen the funding related headlines before, announcing how a company has raised millions just for having a nicely designed app and a fast-growing user base. Many companies have used KPI software from Intrafocus to create profoundly positive impressions during initial funding rounds. Intrafocus has become known as an industry leader in KPI software thanks to its powerful analysis and reporting tools.
2. Making Strategic Adjustments
Every business needs to base their next move on research, so having many different metrics to take into consideration will always be helpful. In essence, the more informed a decision is, the more likely it is that you’ll wind up generating results that are close to what you were hoping for or projecting. With a firm understanding of what your company has achieved thus far, you can make reasonable assumptions and develop realistic expectations about what steps you should take next.
3. Identifying Weaknesses and Strengths
Knowing your company’s strong points and weaknesses might seem like a simple task that won’t require the use of statistical analysis, but you’d be surprised at how poorly your business might be performing in certain categories when you start comparing your results to industry averages. For example, if you know that the average site in your niche gets a conversion rate (CVR) of about 5% but you’re currently only converting about 2% of the visitors, that would mean that your CVR is relatively weak and should be worked on. It’s possible to overlook shortcomings like these when you’re conducting a high volume of business.
4. Preventing Common Mishaps
Discovering your strengths and weakness won’t just help you make better decisions, it could also keep your company from going under altogether. When you’re able to recognize the mathematical warning signs that a business isn’t financially sustainable, you can take preventative and proactive measures to start correcting those deficiencies before it’s too late.
5. Gauging Employee Performance
Tracking performance indicators before on-boarding new staff members or working with a new service provider can help you determine whether your recent adjustments are having a positive or negative effect on the business. In an ideal scenario, you’ll see a noticeable increase in KPIs after hiring help. If not, you can take that as a sign to look elsewhere or you can continue working with your current team using the metrics to guide you in making the kind of corporate corrections and enhancements you’re after.
6. Staying Competitive
One of the best reasons to track KPIs – and probably the only reason any sensible business owner should need – is that most of your competitors are already doing it. Why would you want to make your brand obsolete and have a significant strategies disadvantage by essentially competing blindfolded? Everyone knows that “knowledge is power,” so don’t diminish your brand’s power by overlooking easily accessible data that could help you gain insight into outdoing your competition. In a way, tracking your own progress is the first step in conducting competitive analysis.
7. An Extra Selling Point
All businesses have a certain number of selling points – the factors that make their products or services appealing. When you’re trying to attract investors who will pour millions into your company, the greatest selling point you can have is an abundance of proof showing that your brand is already a force to be reckoned with.
Don’t Let Great Progress Go Untracked
In conclusion, it’s never a good idea to put forth so much hard work into making a business successful only to be left with no specific proof other than your financial reports. If your brand is experiencing a wave of extraordinary momentum online, it’s imperative that you start tracking every metric within a comprehensive KPI software as soon as possible. The longer you wait, the more precious data you’ll be missing out on which would otherwise tell a detailed story about your company’ success and progress.