Top KPI Metrics Product Should Be Monitoring

Read this article to learn how your business can create a solid foundation with the right KPIs.

Top KPI Metrics Product Should Be Monitoring
Top KPI Metrics Product Should Be Monitoring
  • Picking Accuracy, which is critical to understand frequency and causality.
  • Average Order Value to arm your sales team with data on customer trends.
  • Net Promoter Score so you can analyze your customer satisfaction.

Table of contents

Overview
Demand Planning and Procurement
Production Quality and Inventory Management
Warehousing and Order Fulfillment
Customer and Sales Metrics
KPIs Drive Better Decision-Making

Overview

What do Coke, Ford, and Google have in common? For one, they’ve each had epic product failures that likely could have been avoided. Google had Google Glass (and dozens of other false starts), Coke had New Coke and Ford had the Edsel. Each had the marketing know-how, the customer relationships, and the money and each failed to get the data they needed about the market for their product. The bigger and more egregious the failure, the more likely it could have been prevented by the disciplined use of data.

Demand Planning and Procurement

Many of the metrics here depend on historical data. Knowing what you sold last month is helpful in understanding what you expect to sell this month. Knowing what you’ve sold each month for the last few years is a lot more helpful. With more data, your forecasts should become more accurate over time since you can spot seasonal trends and changes in customer demands. While sales leaders will typically be responsible for sales forecasts, finance teams can track forecast accuracy.

Production Quality and Inventory Management

Selling products is good and therefore turning over inventory is good. But a good inventory turnover ratio is very dependent on your industry. Think egg farmers versus cattle ranchers. It’s useful to look at overall inventory turnover in a quarter or year as well as turnover on a product-by-product basis. Overall inventory turnover is an indication of the company’s health. The higher the turnover rate, the healthier the company should be, provided you’re hitting the proper margins.

Warehousing and Order Fulfillment

Moving inventory isn’t what it used to be. Technology can substantially help with maintaining accurate stock numbers and delivering the right products to the right customer at the right time. From barcodes and readers to RFID and warehouse automation, there’s a lot of ways to ensure that orders are filled accurately and quickly. However you’re picking, packing and shipping orders, you’ll want to track your performance.

Customer and Sales Metrics

If you’re doing well against the KPIs we’ve described so far, it’s likely that customers will be happy with your products and service. But customer satisfaction shouldn’t be taken for granted. Most businesses will employ both direct and indirect measures of satisfaction. A simple five question survey once a quarter can usually give you enough data to see trends in customer satisfaction. Your sales team should be regularly talking to customers-they can ask and record the answers to the same five or so questions as well as get verbatim feedback on your products and service. The critical thing is that the process is consistent and that the data is tracked and analyzed. That’s usually hardest to achieve when the sales team is collecting the data. Employing an outside firm is one way to get the data you want though there’s obviously cost associated with that, and customers may be more willing to answer a call from their sales rep.

KPIs Drive Better Decision-Making

Every company should develop a set of KPIs and track them consistently, but be aware-finance teams are always more interested in KPIs than executives and other line of business managers. Developing better KPIs is a priority for finance but moving the needle with non-finance leaders requires some KPI interpretation.

Technology Blogger writing about emerging technologies (pupuweb.com) and marketing/lifestyle (paminy.com)

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