Setting KPI’s to Level Up

Key Performance Indicator’s (KPI’s) are all the rage in the business world and for good reason. Real winners understand that they can’t get there from here without knowing their numbers, and we’re not just talking dollar signs.

Data driven decisions are a must because number’s don’t lie. And when used properly, KPI’s tell the story of where you are and show you the path to where you want to be so you can get the next level with ease.

There’s 3 components to tracking meaningful KPI’s (key performance indicators):

1. Time frame

2. Targets for the KPI’s

3. Knowing the action it encourages

Here’s a couple of examples that we track with clients:

1. Accounts Receivable (AR) turnover ratio: If this ratio is poor, it tells us that we have lackluster collections processes and/or poor credit approval policies.

   We track this KPI weekly and have a target set for each month that we need to hit. If the is missed, that tells us there is no process in place or it’s insufficient for the target, the process isn’t being followed and/or the person isn’t right for the role.

   This leads into why we need to also track KPI’s per role, not just at the company. If the person is performing and has strong KPI’s, then it’s our process, not the person.

2. Client Retention Rate: this measures how many clients you’re keeping over a given period of time. If a med spa client comes to us with a current retention rate of 65%, we might set our target to hit 85% over the next 6-9 months because existing clients are the most profitable ones.

   The actions taken to enhance this rate might be to implement a membership program and implement processes to book the clients next appointment before they leave the current one.

There is so much data in business, it can be hard to focus if you’re not consistently tracking the right KPI’s that give your clarity on what needs attention now.

We track KPI’s that are tied to your vision and goals so we can clearly see what actions to take to help you achieve your financial fulfillment. Otherwise, this stuff gets overwhelming and meaningless fast and you end up in the same place you were going… no where.

We can help you get past that.