18 KPI examples for managers
— January 24th, 2018
There are numerous different key performance indicators that give added insight into how a business is performing. These performance metrics can be applied to most areas of a business from finance and sales, to employee and customer retention. We have compiled 18 KPIs across four different areas. These figures provide managers with invaluable data that can be applied to business goals and decision making.
- Net profit: This KPI can also be called net income and is a top-line figure that shows how profitable a company is. The net profit is essentially a company's revenue minus the cost of making that revenue (operating expenses, taxes, etc.). This is a key performance indicator for any company and will form the basis for other KPIs.
- Net profit margin: This KPI offers a good insight into how profitable your business is. It's calculated by dividing the net profit during a specific timeframe by the revenue during the same timeframe. What this figure shows you is how much profit you make on each dollar of revenue.
- Working capital: This figure is useful for ascertaining much available cash a company has to hand (also known as working capital). It's worked out by subtracting your current liabilities from your current assets. This KPI is a good way to determine the financial health of your business day-to-day.
- Return on investment: This KPI measures the amount of return on an investment comparative to cost of that investment. It is calculated by dividing the benefit by the cost of the investment and is then expressed as a percentage or a ratio. This figure shows you how beneficial (or not) a particular investment has been and can be useful in determining future investment.
- Conversion rate: This KPI is a critical one for any business; it outlines the percentage of customers who have taken a specific action. Each business will have their own definition of what a conversion is –a sale, a phone call, download an ebook, fill out a form, etc. This will give you a good indication of how successful you are in achieving your goals.
- Average order value: This figure, which is also be known as the average basket or cart value, is a vital metric to keep track of. It is calculated by dividing total revenue by the total number of orders. The figure is of best use for companies looking to establish a benchmark for their customer behavior.
- Qualified leads: This can be broken down into two different types of qualified leads – marketing and sales. A marketing qualified lead is someone who has indicated they are interested in your company/brand/product by downloading a whitepaper or an ebook, or some other expression of interest. A sales qualified lead is one who may have indicated to your sales team that they are interested in finding out more about your business.
- Cost per lead: This is pretty self-explanatory in that it refers to how much have spent on acquiring a particular lead. To calculate this KPI you divide the total spent on marketing by the total number of leads acquired, you can then finesse this figure down by dividing that figure again by the number of leads to get the individual figure.
- Cart abandonment rate: This KPI is arguably the bane of any online retailers' balance sheet. It highlights the percentage of sales that were abandoned (this is solely an online KPI). According to the Baymard Institute, cart abandonment rates for online stores vary between 60-80%, depending on the sector.
Customers and employees KPIs
- Employee engagement level: We've written many times about the importance of employee engagement. This can be measured analyzing employees' engagement with internal communications; start with a baseline figure and reassess regularly.
- Employee attrition rate: This can be directly related to the employee engagement rate in that an engaged employee is less likely to look for another job. Keeping track of employee retention rates will help you to stay ahead of any spikes in employee churn and give you the impetus to work on those engagement levels.
- Net Promoter Score: This KPI gives a crucial insight into your relationship with your customers. It's calculated by subtracting the number of so-called Detractors (those who have given you a negative score) from the number of Promoters (customers who have given you a positive score). The NPS range is between -100 to +100 – a score above 0 is considered a good score.
- Customer retention rate: This KPI is the opposite of customer churn in that it measures the number of customers who have retained during a specific time frame. It is calculated by determining the number of customers at the beginning of the time period (month, quarter, year), minus the number of new customers acquired, and then divided by the number at the end of the period.
- Lifetime value of a customer: This KPI is a prediction of the net profit ascribed to a brand's entire future relationship with a customer. This figure provides a clear picture of how valuable individual customers are to your business and how valuable they will continue to be in the future.
- Unique visits: this is the number of people who have visited your site at least once during a specified time period. It gives a more accurate picture than site visits in that it only counts the person one time even if they have visited your site multiple times during the period.
- Pages viewed per visit: this is a useful KPI that shows you how many pages a user has visited while on your site. This gives a good indication of how easy it is to navigate through your site, how interesting your content is, how interested the visitor is in your brand/products.
- Bounce rate: this is the percentage of single-page visits. It shows you how many visitors left your site after just visiting one page. This will give you a good idea of work you may need to do on your website to improve the content or make it easier to move around your site.
- The number of conversions by channel: this KPI shows you how successful your various channels are at attracting new customers. Channels are sources of traffic to your website and can be anything from email campaigns and newsletters to social media posts. By analyzing how many conversions can be directly attributed to specific channels you can zero in on the ones that are working best for your business.