05 Nov KPIs your online service needs to measure
If you provide services online, you can often be so busy running your business that you fail to see the forest for the trees. When you’ve got to think about marketing, generating new business, completing jobs and chasing clients about unpaid invoices, knowing how your business is doing can be difficult.
Key Performance Indicators (KPIs) are therefore essential for anyone selling their services over the web. By choosing three or four benchmarks that you can measure your business progress against, you can get a clearer idea of how your business is performing.
However, with literally hundreds of possible KPIs to measure, how do you decide which metrics you should use to evaluate your business?
KPIs for your online service business
KPIs should be relevant to what your online service does. If you offer IT consulting services, at least one of your measures needs to focus on the success of your projects – something like ‘level of adoption of business technology’. Or, if you provide training services over the internet, you need to measure how many of your students actually pass the tests you help train them for.
That said, there are also some more general business KPIs you should be measuring too:
• Gross profit margin
For the majority businesses, this is the most important KPI. Put simply, you need to calculate how much profit you are making after accounting for all other expenses
• Leads through your website
If you provide services over the internet, or have an online booking page, it is important to know how well that website is performing. So, you need to keep a count of how many leads you get through your website to see how well you’re doing
• Customer satisfaction
Are your customers actually pleased with the work you provide? As you develop client relationships, it’s a good idea to carry out customer satisfaction surveys ever quarter. These can give you honest feedback on ways to improve
• Time utilisation
How much time do you actually spend earning cash? Many online entrepreneurs can get caught up working on admin, chasing clients and doing their accounts. That means much less time than they’d like doing ‘real work’. By measuring how you spend your time every day, you might decide that it’s worth outsourcing some of those more manual jobs
KPIs for small online service businesses
It’s a mistake to think that KPIs are only for big corporates: they’re just as important for entrepreneurs who sell their services over the internet. By choosing between 3-5 KPIs that are suitable for your business, you can make important decision about how you spend your time and where you can improve.