Why track metrics

Tracking ROI can help businesses decide which investments are worth pursuing and which are not. This can help determine if any adjustments are necessary to reach those goals. For instance, a business can use profitability metrics to track its average profit margin compared to its goal profit margin. The company can use this data to change sales methods used to generate profit. Productivity: Productivity metrics measure the ratio of work generated to the resources used.

For example, an assembly line employee who can produce items in an hour is more productive than one who can only produce 50 items in an hour.

Sales performance metrics. Sales managers can influence sales activity like implementing daily sales quotas or a minimum number of sales phone calls , making it manageable to track. Sales activity is measured through metrics like the number of calls made or emails and proposals sent to prospects. Lead generation: Lead generation metrics are important to track so businesses can assess the prospect stage of acquiring new sales.

Average lead response time and percentage of follow-ups are two examples of good lead generation metrics to track in sales.

Sales productivity: Sales productivity metrics track the rate at which a salesperson or team meets revenue goals. The less time it takes for a revenue goal to be met, the higher the sales productivity. Data such as time spent on selling activities and the average number of sales tools used during that time are examples of sales performance metrics. Project management performance metrics. Productivity: Tracking productivity provides data that enables a project manager to assess resources used to complete the project and total effort made within the project parameters.

Cost: Cost metrics are key performance metrics to track in project management. Cost management needs to account for any unexpected variables that could arise during the project timeline. Gross margin: Gross margin is the difference between the total cost of the project and the revenue it generates for an organization. Overall, metrics should reflect and support the various strategies for all aspects of the organization, including finance, marketing, competition, standards, or customer requirements and expectations.

Metrics indicate the priorities of the company and provide a window on performance, ethos and ambition.

To derive the most benefit from metrics, it is important to keep them simple. Defining a metric is similar to telling a joke — if you have to spend too much time explaining it then it will not work. Employees need to understand the metric, how they can influence it and what is expected of them. This communication element is a detail often overlooked, but it is important that employees have a good sense of what success might look like.

The following five steps cover the basics for setting up organizational or process metrics:. Define the metrics All metrics should be clearly defined so that an organization can benchmark its success. One way to keep metrics understandable is to use the SMART specific, measurable, achievable, relevant, time-based model. The Achievable step in this model is particularly important.

A word of warning: Set metrics carefully, or they could damage the business. For instance, a bus company with a metric based on how many buses complete routes on time could result in bus drivers speeding, jumping traffic lights, taking short cuts or missing skipping bus stops to make better time. Metrics should not encourage employees to take negative actions. By focusing on what truly matters for your organization, you can track success, prove website value and ROI, and continuously improve your website.

KPIs are a set of indicators that help organizations assess progress toward strategic objectives. They are important because they help organizations track how well they are doing to meet these objectives. To know if you are helping your organization achieve success, then you need to measure specific things on your website. One of the most efficient ways to do this is through KPIs. The first step is to create a set of strategic objectives for your website.

If there is no set strategy in place where you work, then you need to define your own objectives by determining what your most important initiatives are. What do you want people to do on your website? How do you measure that? Maybe you measure the number of happy customers and determine you need happy customers to have the best organization in the world.

But what is a happy customer? As you can tell from this example, this process can get a little tricky. Keep raising the bar when it comes to KPIs by increasing individual and team targets when needed, particularly in areas where there are problems or backlogs. If you have targeted to reduce 60 day plus debt by a certain percentage or value, you can keep altering that percentage or value as the debt reduces over time. They also need to be easy to analyze for you to be able to really see the benefit.

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