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23 views2 pages

Subtitle

Uploaded by

rashedahmed0403289203
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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[MUSIC] In this video, we will expand on

our introduction to key performance indicators, KPIs, by exploring


the various types of KPIs available. Understanding these categories is crucial
for choosing the right indicators to track your business performance and
guide it towards success. By the end of this video you will
grasp the differences between various categories of KPIs and learn how to
select the appropriate type of KPIs for your business or department. KPIs can
broadly be categorized
into four categories, lagging and leading indicators,
quantitative and qualitative indicators, input and output KPIs,
operational and strategic KPIs. Let's talk about them one by one. First, let's talk
about
the difference between the lagging and leading indicators. Lagging indicators
measures
outcome after the fact telling us where we have been Zara UK uses sales
growth of 15% over the previous year to understand how the performance
of past has been there. In contrast, leading KPIs offers
a predictive glimpse into the future indicating where we are headed. For example,
5% conversion rate or 50 GBP customer acquisition cost for
each 100 customers by Zara. Quantitative and qualitative KPIs,
now, quantitative KPIs are measured in numbers, for example,
units sold or website traffic. Generally, revenue and
finance related activities are measured through these KPIs like total
sales transaction value by Zara. On the other hand,
qualitative KPIs assess non-numerical or non-financial data like
customer satisfaction or customer retention rate or
inventory turnover rate. Furthermore, we can segregate
KPIs into input and output indicators based on their
role in the business process. Input KPIs measures the resources invested
in generating business outcomes such as customer acquisition cost,
inventory turnover and marketing costs. Output KPIs meanwhile measures
the result of business activities like the number
of products manufactured. Lastly, we can distinguish between
operational and strategic KPIs. Operational KPIs focus on the day-to-day
functioning of the business such as order fulfillment,
accuracy, on-time delivery by Zara. While the strategic KPIs on the other
hand align with the long term goals and objectives such as market share growth,
carbon footprint. As in the case of Zara UK,
we must keep a balance by selecting different types of KPIs to give us
a complete picture of the business. We can use balance
scorecard approach here. As you will see, many of the indicators
fall in multiple type of categories. So how do we select criteria? Here is a
framework for you to select
the right type of KPIs with many KPIs how to choose the right
type here is a simple framework. You need to answer following questions
before you choose the right type of KPI. What are your current business goals and
focus? What type of KPIs align with those goals? Again, we need to have a balanced
scorecard approach here. Do we have the means to
measure them accurately? Drawing from my experience,
when we repositioned our hotels for local taste after a long
closure due to the pandemic, our KPIs focus were percentage
of preventive maintenance done, number of guests called per day
to inform about the re-opening. Average rate positioning among
the competitors and feedback survey to understand the customer demographics
as a percentage to the total guest day. These KPIs were necessary for
us to reengage with the business. However, when we were able to get
the basics market penetration, we shifted our gears to
other KPI indicators. Such as net promoter score,
number of satisfaction surveys completed, cold calls to check the satisfaction,
RevPar achieved among the competitors. These KPIs indicate
operational performance. You can see how we shifted from
maintaining a mix of input, output, qualitative, qualitative and
operational and strategic and leading and lagging indicators. You need to keep a
balance
of this approach. In conclusion, the diverse type
of KPIs offer various lenses through which you can view
your business performance. By carefully selecting KPIs that
align with your strategic and operational goals, you can ensure that
you are not just gathering the data but gaining a valuable insights to
drive your business forward. Now, I have a question for you. [MUSIC]

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