Examples of Common KPIs
In our last article, we defined just what a KPI, or Key Performance Indicator, is. In this one, we’re going to show you lots of examples of real-world KPIs, spanning lots of different verticals, industries, and functions. This is the first step in helping you to narrow your focus so you can eventually determine which KPIs can work for your business, and how.
As you’ll see as you read these examples, 1) they’re almost invariably expressed as a ratio or percentage (“How many X for each Y”), and 2) they can be used to drive action, based on the performance (or lack thereof) that they reveal.
For each one, we’ll give you the hardcore definition, followed by our ever-helpful OpsDog tips of what that definition really means, in regular English, as well as why you should care. (Because at OpsDog, we really really want you to succeed. That’s why we’re here.)
Let’s dive in. And feel free to scroll down to any category that has more relevance for you.
Sales Growth: This KPI expresses the change, in percentage, in total sales generated by the company at a defined interval, for a certain time period.
- In English/Why your business would care about this KPI: “Our weekly sales are X percent higher than they were at this time last year.” Note that that could be “daily,” “monthly,” or “quarterly”; the “vs. last year” could be “vs. last quarter”; and the “higher” could well be “lower.”
Sales Quota Attainment (Sales Teams): The total number of sales teams that achieved their sales target or quota, divided by the total number of sales teams within the company over the same period of time, expressed as a percentage.
- In English/Why your business would care about this KPI: “Wow, only 19 percent of our sales teams hit their numbers in the last quarter!” ‘Nuff said.
Net Promoter Score (NPS): You hear this one all the time, don’t you? Here’s what it is. NPS measures, on a scale of 1-10, how likely a customer is to recommend a company to a friend, family member, or coworker. It’s calculated by subtracting the percentage of detractors (those who rate the company from 0-6) from the percentage of promoters (those who rate the company from 9-10). That’s why it’s called “net”: one number is subtracted from the other.
- In English/Why your business would care about this KPI: A small number of detractors can have a disproportionate negative impact on your company. That’s why so many firms agonize over this number.
On-time Customer Order Delivery Rate: The total number of shipments received by customers on or before the committed ship or delivery date, divided by the total number of products that were actually shipped over the same period of time, expressed as a percentage.
- In English/Why your business would care about this KPI: “What percentage of our orders got to our customers on time?”
Manufacturing Cycle Time: The average amount of time (minutes, hours or days) required to process a manufacturing work order, starting from the receipt of the customer’s original order at the appropriate manufacturing facility, and concluding when the finished product is ready for packaging. This KPI can include both standard and customized products.
- In English/Why your business would care about this KPI: “How long must customers wait before the order they placed is ready to be shipped?” Clearly, this a number you want to keep as low as possible.
Scrap Rate Due to Errors: The number of units produced over a certain period of time that must be scrapped because of product defects or errors, divided by the total number of units produced by the manufacturing group over the same period of time, as a percentage.
- In English/Why your business would care about this KPI: “What percentage of the units we attempted to make last month turned out to be useless garbage?” Why should you care? Duh.
Average Handle Time (AHT): The average number of seconds required to handle a single call (either inbound or outbound), including any after-call work that is required.
- In English/Why your business would care about this KPI: “It’s averaging 15 minutes per call to resolve basic customer issues? Boy, that’s costing us a fortune. We should be able to drive that KPI way down with better training.”
Call Center Shrink Rate: The amount of time that call-center representatives spend off the phone and unavailable to accept calls (including breaks, vacation, meetings, etc.), divided by the total scheduled work time, expressed as a percentage.
- In English/Why your business would care about this KPI: “Do we need to add staff to that call center? Or perhaps are there simple opportunities to squeeze a little more productivity out of it as it stands?”
Transactions per Branch: The total number of transactions processed at retail branch banking locations, divided by the total number of retail branch locations managed by the bank at the same point in time.
- In English/Why your business would care about this KPI: “We’re currently averaging X number of transactions per branch each week across this region. Knowing that, we could then see how each branch within the region stacks up against this KPI.”
Mortgage Loan Pull-through Rate: The number of mortgage loans that are approved, closed, and funded—divided by the total number of mortgage loans applied for over the same period of time, expressed as a percentage.
- In English/Why your business would care about this KPI: What percentage of mortgage applications actually closed this year? Why are certain loans closing and other are not? How does that KPI compare to last year?”
Human Resources (HR)
Turnover Rate: The percentage of positions within the company that were vacated over a certain period of time.
- In English/Why your business would care about this KPI: “This KPI says ‘revolving door’ to me! No wonder our recruiting and training costs are so high! Let’s make a concerted effort on the retention front; the investment will be worth it.”
Human Resources Headcount Ratio: The number of company-wide, full-time equivalent employees (FTEs), divided by the total number of HR Department FTEs.
- In English/Why your business would care about this KPI: This KPI quickly shows leadership just how lean—or perhaps bloated—its HR function is, compared to the rest of the organization.
Customer Acquisition Cost (CAC): CAC measures the average cost to acquire a single new customer; it’s the marketing/advertising expense, divided by the number of new customers acquired over the same period of time. This KPI should be segmented by product and/or marketing channel (social media, newspaper, website, etc.) in order to increase its operational relevance.
- In English/Why your business would care about this KPI: “Was that massive Facebook expenditure worth the money? How many customers did it actually get us? Is this a profitable marketing channel?”
Customer Satisfaction Index (ACSI): A customer survey, measured on a scale of 0 – 100, derived from a combination of the responses to three questions (ranked from 0 – 10) measuring different aspects of customer experience. This metric was developed by the American Customer Satisfaction Index group, hence the “ACSI” acronym.
- In English/Why your business would care about this KPI: You don’t need us to explain why this one is important to you. Really.
Claims First-pass Resolution Rate: The total number of claims resolved upon initial submission, divided by the total number of claims resolved over the same period of time, expressed as a percentage.
- In English/Why your business would care about this KPI: This KPI alerts management to claims-processing bottlenecks. As such, it invites further inquiry and finding means of improvement.
Policyholders per Employee: This simple, high-level metric takes the number of policyholders served, and divides it by the number of total employees. Insurance companies may use this KPI as a broad measure of organizational capacity and staffing levels.
- In English/Why your business would care about this KPI: This KPI is like the body-mass index of the insurance world. It shows how lean, or not, you are.
Pat yourself on the back
No, that’s not a category. That’s our clever subhead to tell you that you’ve aced yet another OpsDog KPI 101 article. In our next article, we’ll discuss the seven types of KPIs—and more. Go ahead: Binge-read it now.
Or, feel free to dive into our rich trove of KPIs and other data products which you can put to work for you business today.