KEY PERFORMANCE INDICATOR (KPI)

- A measurable value that demonstrates how effectively a company is achieving key business
objectives
 High levels KPI’S focuses on the overall performance of the business
 Low levels KPI’S focuses on the processes across departments like sales, marketing, HR, or
support

QUESTION
What is your desired outcome?
Why does this outcome matter?
How are you going to measure progress?
How can you influence the outcome?
Who is responsible for the business outcome?
How will you know you’ve achieved your
outcome?
How often will you review progress towards the
outcome?
ANSWER
Increase the revenue by 20% this year
The business will become more profitable
The increase in the monthly revenue measured in
pesos
By encouraging expansion on MRR for existing
customers, by moving MQL’s to SQL’s moving
opportunities to win, and collaboration between
marketing and sales.
Director of Sales
Revenue will increase by 20%
On a monthly basis

HOW TO WRITE KPI”S?

1. Write a clear objective

2. Share with Stakeholders
3. Review on a consistent basis
 Progress against the KPI’S
 Progress to determine the effectiveness of KPI
4. Create actionable KPI
 Review business objectives
 Analyze current performances
 Set short and long range KPI targets
 Review target with the team
 Review progress and adjust

HOW TO MEASURE A KPI?

SMART SMARTER

S – Specific

M – Measurable

A – Attainable

R – Relevant E - Evaluate

T – Time Frame R – Re-evaluate

WHY ARE KPI”S IMPORTANT?

1. Engage employee
2. Connect purpose and culture
3. Makes everyone accountable for performance

BEST EXECUTIVES KPI”S

NET PROFIT MARGIN – shows net profit as a percentage of total revenue.

DEBT TO EQUITY RATIO – measures how the organization is funding its growth and how effectively
shareholders’ investment are use.

Customer Lifetime Value / Customer Acquisition Cost

LIFETIME VALUE TO COST OF ACQUISITION RATIO - measures if the theoretical lifetime revenue you
get from a customer is higher or lower than the sales and marketing costs needed to acquire the customer.

CAC PAYBACK PERIOD - the time it takes for a company to earn back their acquisition cost.

Average (CAC per customer) / Average (ARR per customer)

BEST MARKETING KPI’S

CUSTOMER ACQUISITION COST (CAC) - the cost a business incurs to acquire a new customer.

LEAD CONVERSION RATE – the percentage of visitors who comes to your website and are captured as
lead.

MARKETING QUALIFIED LEADS (MQL) – a universal metric used by marketing teams to measure the
quality of leads they generate and pass to sales.

RETURN ON MARKETING INVESTMENT (ROMI) – measures how much revenue a marketing campaign is
generating compared to the cost of running the campaign.

BEST SALES KPI”S

LEAD TO WIN RATE – the percentage of leads who entered the sales funnel and are now “closed won”
customers and individual who has shown an interest in the product or service.

LEADS - an individual who has shown an interest in the product or service.

MRR GROWTH RATE – MONTLY RECURRING REVENUE (MRR) GROWTH RATE, the velocity at which
MRR is being added to the business expressed as a percentage.

AVERAGE SELLING PRICE (ASP) – the average price a given product is sold for.

BEST FINANCE KPI’S

GROSS MARGIN - a profitability ratio that measures gross profit as percentage of total revenue.

NET BURN OR BURN RATE - the amount a company is losing per month as they burn through their cash
reserve.

NET PROFIT – the value that remains after all expenses are subtractive from the company’s total income.

REVENUE – the income generated through a business primary operations.