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6 Benefits of KPI Reporting

7 min read
Feb 8, 2022

 

 

 

If you were to listen in to just about any executive meeting or performance review, it’s highly likely you would hear the term ‘KPI’ mentioned several times. A prominent term in the world of business and one that is often thrown around a lot, KPI stands for key performance indicator. 

Throughout this blog, we’re going to dive into the key benefits and importance of reporting on KPIs regularly. To understand that, it’s important to first know the definition of a KPI. On a high level, KPIs tell you whether your business is moving forward or backwards. If you think of goals as where you want to get to, the KPIs are the sat nav that will help get you there. 

 

6 Benefits of Reporting KPIs

 

Key Performance Indicators are the critical (key) indicators of progress toward an intended result. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.” 

They can come in many different forms, but most commonly are numerical values that are actionable, crucial and should be communicated throughout the organisation. 

 

6 Benefits of Reporting KPIs

Source: MIT Sloan

 

What is a KPI report? 

With huge amounts of data available, it’s easy to become overwhelmed and miss what is important. You can’t track everything, so it’s crucial to sift through and select the information that is relevant and will be the most beneficial to report on regularly. 

Each business will spend time, money and valuable resources on campaigns and business activities, so it makes sense to measure progress to ensure resources aren’t being wasted. If you want to meet your organisation’s objectives, then a KPI report is a great place to start. 

A KPI report is typically presented using a mixture of charts, graphs, tabular information and written copy to make the data more manageable and ultimately more usable. It’s important not to confuse a KPI report with a KPI dashboard. While they are both similar, the key to differentiating them is understanding how each one is applied in a business scenario. 

 

40 most important KPI for marketers

 

KPI Report vs KPI Dashboard 

A KPI dashboard is a visually engaging display of progress in one quick look. For example, if you’re aiming to increase your social media engagement, you can create a dashboard to see progress in real-time. Metrics included could range from daily channel comments, shares, mentions, follower count, reach and so on. Instead of pulling numbers from various sources and places, the dashboard will show them all together. 

Each time you look at a dashboard, the metrics will most likely be different than the last time you checked, depending on how often your dashboard is set to refresh.

6 Benefits of Reporting KPIs

A KPI report, on the other hand, is a static, prepared document that focuses on the analytical interpretation of underlying metrics, mostly via tables and graphs to help make decision making easier. KPI reports collate data over a specified time period, for example, if you want to understand how well your social media strategy worked in Q1. In this instance, looking at a real-time dashboard may not be enough to fully gauge the success and draw conclusions, instead you will need data over time. The KPI report is prepared to assist in the next steps and unlike a dashboard that only provides metrics in a visually engaging way, the KPI report will provide some of the same information but will have more analysis, interpretation and will often contain recommendations and plans for the next steps. 

As highlighted above, dashboards and reports are different, however, they still serve the same purpose, to help make data-driven decisions and show progress and performance. 

 

6 Benefits of Reporting KPIs

1)   Improve employee engagement and morale 

Setting KPIs for individuals can drastically boost morale, create accountability and improve overall performance. It can be encouraging for employees to have a goal to work towards and know that they have met their goals at the end of each month or year. In some organisations, KPIs are often linked to incentives, such as monthly bonuses being given to those who secure the most sales or bring in the most revenue. Other examples could be team lunches, days off or non-monetary incentives like gift cards or vouchers. Having these incentives can empower and encourage employees to hit their goals and is a great way to develop a culture that celebrates and encourages success. 

Setting departmental KPIs can help to encourage communication and collaboration between team members. When setting these it’s crucial that they are achievable and truly under their control. If employees are held to a standard that they believe they can not achieve, morale and engagement may rapidly decline. In a study of call-centre employees, engaged and satisfied employees are 8.5 times more likely to stay than leave within a year, 16 times more likely to refer friends to the company and are 3.3 times more likely to feel extremely empowered to resolve customer issues. 

6 Benefits of Reporting KPIs

Source: McKinsey & Company


2)   Close learning gaps 

It is difficult to argue with data, so if one individual or department isn’t performing efficiently, then KPIs will highlight this and can help to figure out why. If an employee is not reaching a goal, it may indicate that the employee needs further training or guidance. In some instances, this can be a good indicator that the employee is underperforming or is not cut out for the job itself. The process of addressing an underperforming employee becomes much more manageable when both management and employees know their expectations. 

 

3)   Measure performance

Not surprisingly, one of the main reasons for having KPIs is to measure performance. A good KPI should be measurable and trackable, so whether it’s a specific marketing campaign, new business initiative or sales strategy, reporting on KPIs will allow you to measure how close you are to achieving the overall target. Being able to see areas where things aren’t going to plan helps team leads make a decision on the strategies they need to improve on.

Say for example, at the start of the year your marketing target is to reach 1,000 Instagram followers by the end of Q1. Based on this, you might aim to get around 333 followers in January,  February and March, however your January report shows that you only gained 100 followers. At this stage, you would need to implement a new strategy in order to still reach the goal by the end of Q1. You may choose to run a competition in which users need to follow your page to enter which may help to reach your goal of 1,000 followers in Q1. 

 

4)   Help to make decisions 

KPIs are useful to help inform decisions, however, they should not make the decision for you. It can be tempting to look at one KPI alone and use this to determine whether a campaign is going well. On the other hand, it can be tempting to scrap certain KPIs because they aren’t telling the full story. To fully appreciate KPIs and use them to make informed decisions, it is best to take others into consideration. Say, for example, you notice the number of visitors to your website has dropped substantially. Instead of jumping to the conclusion that you aren’t creating the right content or implementing SEO techniques, it’s important to look at the bigger picture such as time on site, Google ranking and page views per visit. After examining these, you might notice that the issue stems from your Google rank, which has dropped significantly due to spammy backlinks. A single KPI can be the trigger that a decision needs to be made, but to make the most informed decision, it is best to consider other metrics. 

6 Benefits of Reporting KPIs-05

5)   Detect patterns over time 

When recording weekly, monthly or quarterly KPIs, you have a greater opportunity to spot patterns and trends within data. It is much easier to spot trends particularly when they are presented visually, or in the form of bar charts, pie charts etc, rather than just a spreadsheet showing figures. This will allow you to make adjustments if necessary in order to achieve the KPI in the given time frame. For instance, if you know historically that you get less engagement on your social media channels during the summer months, you could plan a social media campaign to run over June, July and August to ensure engagement doesn’t drop, or you could use this downtime to do research or training in social media to avoid this happening in future.

 

6)   Help to set goals and plan

To reach your overall business objectives, you need to set a target and aim towards that. It can often be difficult to keep all team members or departments within the business aligned and working toward a shared goal. Once the overall objective has been set, KPIs will help to break it down into more manageable and achievable chunks and allow you to plan your strategies on how you will get there. However, once KPIs have been set, it doesn’t mean they cannot change. If your reports highlight that the KPI is never being met, then it might be necessary to review and adjust these. 

 

Conclusion 

Setting, measuring and analysing KPIs is a vital part of any business, however, it doesn’t have to be a painful, time-consuming process. Whether you are using a CRM or Excel spreadsheet, integrating your KPIs from your various tools onto a cross-platform analytics dashboard can make a massive difference. Having real-time metrics, all in the one place, that update automatically allows teams and individuals to improve progress and time spent on activities. Being able to have a high-level overview on which metrics need improvements and which ones are performing well can free up valuable time, allowing you to work more efficiently.

 

Track and visualise your KPIs in real-time with Hurree. Book a free demo today and discover how to truly harness the power of analytics and transform your company reporting using cross-platform dashboards. If you have any questions then feel free to reach out to contact@hurree.co, we'd be happy to answer them!

 

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