Vision

Mission
Strategic priority
Strategic result
Business objectives and strategy map Measures Targets Initiatives
Financial :  Increase revenue  Net profit  5% per year Implement new financial
 Decrease operating cost  Operating cost  3% per year accounting system
 Increase profitability  Revenue in target  10% per year Simplify billing operations
market
Customer  Improve clarity of % market share index
offering % customer satisfaction
 Improve market index
perception % focus group user index
 Improve customer
satisfaction
Internal process  Improve of offering New products as % of
selection sales
 Improve information Brand awareness
services
 Improve stock
reliability
 Improve cost control
Organization capacity  Improve knowledge
and skills
 Improve technology
 Improve supply chain
Strategy Maps
A good strategy map should communicate everything a company is striving to achieve on a single page. If your company is made up of only five
people or is an enterprise of 5,000 people first and foremost you want them to know exactly what the company is about and what it is trying to
achieve.
.
To make the most of a Strategy Map we would suggest one or two additions to the basic template. The basic balanced scorecard template
focuses on four areas of business referred to as ‘perspectives’ these are: 1. The Financial Perspective, 2. The Customer Perspective, 3. The
Internal Processes Perspective, 4. The Organisational Growth Perspective. In addition to these four perspectives there are three things that need
to be highlighted, these are: 1. A Vision Statement, 2. A Mission Statement and 3. A Core Values Statement. It is true that these statements could
be included within the four perspectives, but given their importance in their own right, they should be given the right level of prominence in a
strategy map. So how does this all come together? The easiest way to demonstrate is through a sample strategy map template (click on map to
enlarge):

The following diagram is an example of a Strategy Map for a telecommunications company:

1. Net profit

This goes without saying, but keeping an eye on net profit at all times is essential for business leaders.
This might be visualized as a line graph or quarterly chart. However you decide to represent the data, it
needs to provide detailed, regularly updated information.

Get added value by allowing this data to be broken down. With ReportPlus, you’d be able to tap your
chart and see real-time data on profits by region, product type or team. As long as you collect the data
somewhere, it can be incorporated into an interactive chart.

2. Progress towards targets

When you set quarterly, annual and long term targets, you need to keep your eyes on your goals. This kind
of information can be represented visually with a simple comparison of ‘actual’ profits and ‘expected’
profits. You’ll be able to quickly compare how the company is doing, reassure shareholders and make
crucial decisions.

3. Revenues and revenue growth rate

By being able to instantly visualize how fast (or otherwise) your business is growing its revenues, it’s
much easier to find out what’s going right and what’s going wrong. Need to lose some dead weight?
Invest in a growing department? Respond to a new trend among consumers? Tracking your revenues
closely is crucial and will help with those decisions. A line graph would again be particularly clear in this
instance.
4. Expenses

Whether it’s staff, machinery, IT or property, your expenses are one of the biggest drains on your long
term success. A dashboard can break these down instantly so you can see where your biggest outgoings
are, and then make decisions about what’s costing too much.

5. Revenue per employee

Revenue per employee is a little like Return on Investment. Are your people actually making enough
revenue to justify hiring them? Are they working at 100% capacity or is there room for them to work
more, instead of employing new workers? A revenue per employee dashboard helps you make these
choices rationally.

6. Employee engagement

Measured by an anonymous survey, employee engagement is a key BI factor for any CEO. If your people
are motivated, enthusiastic and giving their work 100%, you can be sure your company will grow. By
contrast, unengaged colleagues will be a detriment to productivity. It’s essential to keep regular tabs on
how employees are feeling about their work.

7. Profit per customer

This is an easy one – how much are your customers spending? How this is represented on your dashboard
depends on the market you work in – whether it’s B2C, B2B or B2G. By building better relationships with
your customers and improving loyalty, you can expect profit per customer to increase.

8. Order fulfillment cycle times

The faster you complete orders, the faster you can invoice. Further, rapid order fulfillment equals
impressed and loyal customers. As a CEO, you should keep a constant eye on progress here, and a simple
dashboard can represent delays clearly and help you identify obstacles.

9. Project completion rate

Projects are the lifeblood of most organizations. As above, this is something CEOs need to constantly
monitor. A dashboard can help you more clearly understand what’s going on in the business and why
certain projects have been delayed or are running late.

10. Downtime

Downtime happens in any business; your suppliers might be late, staff get sick, machinery becomes
faulty. While this is a business reality, once again, it needs to be constantly monitored. A dashboard can
help you notice patterns and discover unexpected causes and implement the changes required to
increase profits.
1. Operating Cash Flow (OCF)
OCF shows the total amount of money generated by a
company’s daily business operations. The financial metric hints
whether a company can maintain a positive cash flow needed
for growth or requires external financing to cope with all the
expenses.
Operating cash flow is calculated by adjusting net income for
things like depreciation, changes in inventory and changes to
accounts receivable. While analyzing your OFC, compare it to
the total capital employed to evaluate whether your business
produces enough capital to keep the accounts positive.

2. Current Ratio
Current Ratio reflects on an organization’s ability to pay all the
financial obligations in one year. This financial KPI takes into
account a company’s current assets such as account
receivables, and current liabilities, such as account payables.
How to evaluate your Current Ratio: A Current Ratio of less
than one indicates that your company will not be able to fulfil
all financial obligations unless there’s an additional cash flow.
A healthy Current Ratio is between 1.5 and 3, but it’s not
infrequent for businesses to have periods of Current Ratio
under 1, especially if the company is investing in growth or
accumulating debt.
Investors like to use the Current Ratio as an indicator of
whether a company has a healthy operating cycle. A too high
CR may indicate that the company has a lot of assets and cash,
but fails to invest in innovation and growth.
Want to see KPIs in action? See how to create a perfect
business dashboard in Scoro.

3. Quick Ratio / Acid Test

The acid-test ratio indicates whether a business has sufficient
short-term assets to cover its near-future liabilities. The Quick
Ratio gives a more accurate overview of a company’s financial
health than the Current Ratio as it ignores liquid assets such
as inventories.

<img loading="lazy" class="original" title="Financial KPIs"

src="https://www.scoro.com/wp-content/uploads/2016/03/Quick-ratio-financial-
kpi.png" alt="quick ratio financial KPI" />

4. Burn Rate
This financial KPI reflects the rate at which a company is
spending money on a weekly, monthly or annual basis. This
basic metric can benefit small firms that do not undertake the
extensive financial analysis.
Compared with Net Profit Margin and Revenue, the Burn Rate
indicates whether the organization’s operating costs are
sustainable in the long term.

5. Net Profit Margin

This metric shows how efficient is a company at generating
profit compared to its revenue. Frequently calculated as a
percentage, this KPI indicates how much of each dollar earned
by the company translates into profits.
The Net Profit Margin reflects on the profitability of a business
and shows how fast the company can grow in the long-term
prospect.
Net margin = net profit / revenue
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6. Gross Profit Margin

The Gross Profit Margin measures the proportion of money left
over from revenue after accounting for the cost of goods sold.
This metric is a great indicator of a company’s financial health,
indicating whether a business is capable of paying its
operating expenses while having funds left for growth.
Usually, organisations have a relatively stable Gross Profit
Margin figure, unless they’ve done some drastic changes
affecting the production costs or undergone a change in the
pricing policies.
Calculated as: costs of goods sold / revenue
Read on: KPI Reporting – 62 Tips, Hacks, and Tools to Succeed

7. Working Capital
The Working Capital KPI measures an organisation’s currently
available assets to meet short-term financial obligations.
Working Capital includes assets such as available cash, short-
term investments, and accounts receivable, demonstrating the
liquidity of the business (the ability to generate cash quickly).
Immediately available cash is known as Working Capital.
Analyse financial health by reading available assets that meet
short-term financial liabilities. Working capital, calculated by
subtracting current liabilities from current assets, includes
assets such as on-hand cash, short-term investments, and
accounts receivable.
Working Capital is calculated by subtracting current liabilities
(financial obligations) from current assets (resources with cash
value).

<img loading="lazy" class="original" title="Financial KPIs"

src="https://www.scoro.com/wp-content/uploads/2016/03/Working-Capital-financial-
metric.png" alt="working capital financial KPI" />

8. Current Accounts Receivable

This financial KPI measures the amount of money owed to a
business by its debtors. The Current Accounts Receivable
metric helps to estimate the upcoming income and calculate
the average debtor days, showing how long it takes for an
average business partner or client to pay back their debt.
A high Current Accounts Receivable metric might indicate that
a business is incapable of dealing with long-term debtors and
thereby losing money. If people or companies don’t pay their
bills, they’re considered to be in default.
Curious to find out more? Read a thorough explanation on what
is a KPI.

9. Current Accounts Payable

Opposite to the receivables, the Current Accounts Payable
metric indicates the sum that a business owes to suppliers,
banks, and creditors. It can be broken down by business
departments, divisions, and projects, to have a more detailed
overview of current payables.
To calculate the Current Accounts Payable, organisations need
to take into account all liabilities that need to be paid in a
particular time frame.

10. Accounts Payable Turnover

This financial KPI indicates the rate that an organization pays
its average payable amount to suppliers, banks, and other
creditors.
Here’s how to calculate the Accounts Payable Turnover: Let’s
say a company makes $10 million value of purchases from
suppliers in a month and at any given point has the remaining
Accounts Payable of $2 million. This means that the Accounts
Payable Turnover is $10 million / $2 million = 5.
If the turnover ratio is falling compared to previous periods, it
might indicate that an organization is having troubles paying
back its debt. If the turnover rate increases, it means that a
company is paying back its suppliers at a faster rate than
before.

11. Accounts Payable Process

Cost
The Accounts Payable Process Cost indicates the total cost of
processing all payments and invoices in a particular period.
A look at the results of APQC’s survey on accounts payable
(AP) process productivity suggests that there is a strong case
to be made for investing in electronic invoice presentment,
processing, and payment (EIPP) technologies as they
significantly lower the cost of processing invoices and paying
to suppliers.
Read on: 19 Best Invoicing Software to Save You Time and
Money

12. Accounts Receivable Turnover

The Accounts Receivable Turnover shows a firm’s
effectiveness in collecting debts and extending credits. If a
company maintains a large opened bill for a customer, it’s like
giving away an interest-free loan, instead of using the money to
grow the business.
To calculate the Accounts Receivable Turnover, companies
need to divide the net value of credit sales during a given
period by the average accounts receivable during the same
period. The calculation is very similar to figuring out the
Accounts Payable Turnover: net value of credit sales/accounts
receivable.
The lower this financial metric, the less a business struggles
with collecting debts and payments, having more assets ready
for investing in growth and innovation.

<img loading="lazy" class="original" title="Financial KPIs"

src="https://www.scoro.com/wp-content/uploads/2016/03/Accounts-Receivable-
Turnover.png" alt="payroll headcount ratio financial KPI" />

13. Inventory Turnover

The Inventory Turnover KPI indicates how efficiently a
company sells and replaces its inventory during a particular
period of time. So it reflects an organization’s ability to
generate sales and quickly re-stock.
There are two formulas for calculating the Inventory Turnover:
Inventory Turnover = Sales / Inventory
Inventory Turnover = Cost of Goods Sold / Average Inventory

14. Budget Variance

Budget Variance is also a frequently used project management
KPI, indicating how projected budgets vary compared to actual
budget totals. The metric is used to evaluate whether the
budgeted or baseline amount of expenses or revenue meet the
expectations.
A minimal budget variance indicates that the actual expenses
are equal or lower than the projected ones, or the revenue is
higher than anticipated. A significant variation in budgets is
usually caused by too optimistic forecasting or poor leadership
decisions.
<img loading="lazy" class="original" title="key performance indicators examples"
src="https://www.scoro.com/wp-content/uploads/2015/11/key-performence-
indicators-examples.png" alt="“key" />

15. Budget Creation Cycle Time

The Budget Creation Cycle Time indicates the period used to
research, plan and agree on a company’s budget. A long budget
creation cycle isn’t necessarily a bad thing, but it might use up
valuable resources like the leadership’s time.
16. Line Items in Budget
The line items in a budget help managers and project leaders
to keep track of expenditures in a more detailed way. The line
items can signify projects, business departments, or some
other accounting measures, to give a better overview of where
the money is spent.
Moreover, a detailed budget makes it easier for a company to
address the right departments and projects when in need of
cutting the budgets.

17. Number of budget iterations

The higher the number of budget iterations, the more time it
takes to plan a budget and get it right. The number of budget
versions produced before the final approval depends on the
leadership’s ability to plan efficiently the next term’s budget.
According to a survey, the top 25% participants had the
average of 4 budget iterations, while bottom performers are
used to 9 budget versions before the final approval.

18. Payroll Headcount Ratio

This financial metric shows how many team members are
engaged in payroll processing compared to the total number of
employees. The Payroll Headcount Ratio indicates the number
of employees in an organization that is supported per one
dedicated full- time employee.
To calculate the Payroll Headcount Ratio, businesses need to
find the ratio of HR full-time positions to the total number of
employees.
<img loading="lazy" class="original" title="Financial KPIs"
src="https://www.scoro.com/wp-content/uploads/2016/03/Payroll-headcount-ratio-
kpi.png" alt="payroll headcount ratio financial KPI" />

19. Sales Growth

This financial metric displays the change in total sales
generated over a certain period. The Sales Growth shows the
percentage of the current sales period compared to the
previous one, indicating growth or decrease in total sales.
20. Days Sales Outstanding
The DSO metric displays the average number of days required
for clients to pay a company – from receiving the invoice until
the full payment. The lower the DSO is, the more a company
can focus on growing and ordering additional supplies.

21. Vendor expenses

This financial KPI shows the current payments a company is
due to vendors (Anyone who provides goods or services to an
organization or individuals). High vendor expenses might
indicate that the business is having troubles paying to its
vendors and suppliers on time.

22. Payment Error Rate

The Payment Error Rate displays the percentage of incoming or
outgoing payments that were not completed due to a
processing error. Frequently, the reason for failures is a lack of
approval, poor documentation or a missing reference.
If a company’s Payment Error Rate increases over time, it may
indicate that it’s time to review the payment processing
system.

23. Internal Audit Cycle Time

The Internal Audit Cycle Time shows the average period
required to perform a full internal audit. This number considers
mainly a company’s leadership and stakeholders that need an
overview of the budgets, expenses, payments, etc.

24. Finance Error Report

This financial metric displays the number of financial reports
that require further clarifications or contain errors,
necessitating a review and a more detailed investigation.
25. Return on Equity
This KPI indicated the capacity of a business to use
shareholder’s investments efficiently, generating high profits.
The Return on Equity shows how much revenue a company
generates for each unit of shareholder equity.

26. Debt to Equity Ratio

Similarly to the Return on Equity metric, this KPI shows how
effectively a business is using their shareholder investments. A
high Debt to Equity Ratio indicates that an organization is
losing investments and accumulating debt instead of
generating new profits out of investments.

27. Cost of managing processes

This financial KPI can be tracked by business departments, to
measure the cost of managing people’s work and planning for
the future. The lower the cost of managing processes, the more
assets are left for implementing tasks and growing the
company.

28. Resource utilization

For some companies, the employee’s time is the most valuable
asset that they also bill the customers for. This is true for
creative agencies, law firms, and other service-based business
models.
The resource utilization KPI indicates how effectively a
company uses its resources (time), comparing the billable time
vs. non-billable work. It can also be used on a project
dashboard for a better overview of project performance.

29. Total Cost of the Finance

Function
The Total Cost of the Finance Function displays the ratio of the
total cost of financial activities compared to the total revenue.
An organization’s financial costs include personnel, managing
systems, overhead, and any other expenses necessary for the
day-to-day operation of the finance organization.
According to an APQC benchmarking survey, the best-
performing companies have the average Total Cost of the
Finance Function of 0.6% while the bottom 25% has the
average Total Cost of 2.0%. Enterprises that want to improve
this metric need to embrace modern technology and software
to automate and optimise their business processes.
Now that you’re familiar with the concept of all important
financial KPIs, it’s time to set up a financial KPI dashboard to
track and measure your company’s financial performance. If
you’re new to the world of the business dashboard, here’s a
helpful resource for getting started and creating your first KPI
tracking dashboard: The Complete Guide to KPI Dashboards.
Primary KPIs that you're undoubtedly already using include revenue, expense, gross profit, and net profit.
Here are other key indicators that should be tracked, analyzed, and acted upon as needed.
1. Operating Cash Flow
Monitoring and analyzing your Operating Cash Flow is an essential for understanding your ability to pay for
deliveries and routine operating expenses. This KPI is also used in comparison with total capital you have in
use—an analysis that reveals whether or not your operations are generating sufficient cash for support of
capital investments you are making to advance your business.
The analysis of your ratio of operating cash flow compared to your total capital employed gives you deeper
insight into your business's financial health, allowing you to look beyond just profits, when making capital
investment decisions.
2. Working Capital
Cash that is immediately available is "working capital". Calculate your Working Capital by subtracting your
business's existing liabilities from its existing assets. Cash on hand, accounts receivable, short-term
investments are all included, as well as accounts payable, accrued expenses, and loans are all part of this KPI
equation.
This especially meaningful KPI informs you of the condition of your business in terms of its available
operating funds, by showing the extent to which your available assets can cover your short-term financial
liabilities.
3. Current Ratio
While the Working Capital KPI discussed above subtracts liabilities from assets, the Current Ratio KPI
divides total assets by liabilities to give you an understanding the solvency of your business—i.e., how well
your company is positioned to meet its financial obligations consistently on time and to maintain a level of
credit rating that is required to order to grow and expand your business.
4. Debt to Equity Ratio
Debt to Equity is a ratio calculated by looking at your business's total liabilities in contrast to your
shareholders' equity (net worth). This KPI indicates how well your business is funding its growth and how
well you are utilizing your shareholders' investments. The number indicates how profitable the business is. It
tells you and your shareholders how much debt the business has accrued in effort to become profitable. A
high debt-to-equity ratio reveals a practice of paying for growth by accumulating debt. This critical KPI
helps you focus on your financial accountability.
5. LOB Revenue Vs. Target
This KPI compares your revenue for a line of business to your projected revenue for it. Tracking and
analyzing discrepancies between the actual revenues and your projections helps you understand how well a
particular department is performing financially. This is one of the two primary factors in the calculation of
the Budget Variance KPI—the comparison between projected and actual operating budget totals, which is
necessary in order for you to budget more accurately for needs.
6. LOB Expenses Vs. Budget
Comparing actual expenses to the budgeted amount produces this KPI. The comparison helps you
understand where and how some budgeted spending went off track, so that you can budget more effectively
going forward. Expenses vs. Budget is the other primary factor of the Budget Variance KPI. Knowing the
amount of variance between the total assumed and total actual ratio of revenues to expenses helps you
become an expert on the relationship between your business's operations and finances.
7. Accounts Payable Turnover
The Accounts Payable Turnover KPI shows the rate at which your business pays off suppliers. The ratio is
the result of dividing the total costs of sales during a period (the costs your company incurred while
supplying its goods or services), by your average accounts payable for that period.
This is a very informative ratio when compared over multiple periods. A declining accounts payable
turnover KPI may indicate that the length of time your company is taking to pay off its suppliers is
increasing and that action is required in order to keep your good standing with your vendors, and to enable
your business to take advantage of significant time-driven discounts from vendors.
8. Accounts Receivable Turnover
The accounts receivable turnover KPI reflects the rate at which your business is successfully collecting
payments due from your customers. This KPI is calculated by dividing your total sales for a period by your
average accounts receivable for that period. This number can serve as an alert that corrections need to be
made in managing receivables, in order to bring payment collections within appropriate timeframes.
9. Inventory Turnover
Inventory continuously flows in and out of your production and warehousing facilities. It can be hard to
visualize the amount of turnover that is actually taking place. The inventory turnover KPI allows you to
know how much of your average inventory your company has sold in a period. This KPI is calculated by
dividing sales within a given period by your average inventory in the same period. The KPI gives you a
picture of your company's sales strength and production efficiency.
10. Return on Equity
The Return on Equity (ROE) KPI measures your company's net income in contrast to each unit of
shareholder equity (net worth). By comparing your company's net income to its overall wealth, your ROE
indicates whether or not your net income is appropriate for your company's size.
Regardless of how much your company is currently worth (its net worth), your current net income will
determine its probable worth in the future. Therefore, your business's ROE ratio both informs you of the
amount of your organization’s profitability and quantifies its general operational and financial management
efficiency. An improving, or high ROE clearly indicates to your shareholders that their investments are
being optimized to grow the business.
11. Quick Ratio
Your Quick Ratio KPI measures your organization's ability to utilize its highly liquid assets to immediately
meet your business's short-term financial responsibilities. This is the measurement of your company’s
wealth and financial flexibility. It is understood as a more conservative evaluation of a business's fiscal
health than the Current Ratio, because calculation of the Quick Ratio excludes inventories from assets.
This Quick Ratio KPI has the popular nickname of "Acid Test" (after the nitric acid test used in detecting
gold). Similarly, the Quick Ratio is a quick and easy way of assessing the wealth and health of your
company. If you’ are a new adopter of KPIs, the Quick Ratio KPI is a good approach to getting a quick view
of your business’s overall health.
12. Customer Satisfaction
While budget-linked KPIs are important, the ultimate indicator of a company's potential for long-term
success is in its Customer Satisfaction quantification. The Net Promoter Score (NPS) is the result of
calculating the various levels of positive response that customers provide on very brief customer satisfaction
surveys. The NPS a simple and accurate measurement of likely rates of customer retention (future sales to
current customers) across your revenue base, and of potential for generating referral business to grow that
base.
Additional Key Indicators
Certain other KPIs should be tracked in specific operational areas of finance, marketing, production,
purchasing, customer services, and others. For examples:
 Marketing KPIs — Cost Ratio of Customer Acquisition to Lifetime Value, Lifetime Value, Customer
Acquisition Cost, and others, Customer Profitability Score, Relative Market Share.
Recurring Revenue Metrics — income and expense areas, such as recurring service contract fees,
subscription fees, product maintenance fees, Revenue Growth Rate, Cash Conversion Cycle.
Recurring Revenue Overview — include Recurring Revenue Proportion, Recurring Revenue Growth
Rate, Recurring Revenue Exit Rate.
LOB Efficiency Measure — Operating Cycle Time (production rate), Capacity Utilization Rate,
Process Downtime Level, Human Capital Value Added, Employee Engagement Level, Quality Index.
Finance Department — Operational KPIs should also include obscure indicators such as Finance Error
Report KPI, Payment Error Rate KPI. And, a variety of indicators in areas of billing and transaction
management, collections, and others.
KPI failures can occur due to any one of a number of reasons:
Usually, the most readily identifiable are inefficiencies in planning, or human error.
Customizing a KPI without thoroughly vetting it for its actual practical value to the business can lead
to problematic results. Such a KPI can distract you and your entire team from focus on true indicators
of performance, and send your business in a wrong direction.
Misusing KPIs can happen by over-emphasizing the KPI number itself, and under-emphasizing the
real-world operational contributors that generate the numbers. This syndrome can lead to unclear
business strategies for improving the parts of operations that underlie the numbers.
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Key Performance Indicators Definition

Key performance indicators (KPIs) are specific metrics that validate everything
what you do as a (marketing) professional. KPIs estimate results for separate
teams and the business as a whole.
Therefore, if you strive to deliver long-term business goals at your organization,
make sure marketing and sales teams have predefined KPIs and target them
consistently.
Roughly, there are 30 metrics you should be tracking, while running or being
part of an online business. Although not all KPIs go directly to marketing (they
matter most for sales), they all are bound to each other.
So what are the most Important KPIs for marketing managers?
1. Sales Revenue
It’s not breaking news. Let’s face it. Marketing campaigns affect the entire
sales funnel. And, at the end of the day, sales revenue becomes the primary
concern of your leadership.
Sales revenue growth is crucial for any business. Frankly, it’s what makes or
breaks your company. Sales revenue should be continuously growing to be
seen as healthy.
What can you do to make your coworkers care more about sales revenue? Be
transparent and share the numbers with your team. Let people know what the
current level of sales revenue is, what the expectations are, and how their
work contributes to these results. It will boost the general motivation and
efficiency of your coworkers, so it’s worth-doing.
And, most importantly, make sure that all your marketing activities contribute
to sales growth. Otherwise, you are wasting time and effort on pointless
campaigns.
Remember Mark Zuckerberg’s idea validator? Apparently, Mark always
confronts up and coming concepts with one simple question Does this help us
grow? That works as a warrant for further investments. Start asking the same
question at your organization.
2. Number of Leads
A job well done, in marketing, is a job that unleashes the traffic storm to your
website. And we don’t mean garbage traffic though. We’re talking about well-
targeted and high-converting traffic. Obviously, the more leads your marketing
campaigns generate the better. Because leads mean more revenue. And
revenue means more profit(most of the time).
But wait: What is a lead? Or rather, → who is a lead?
Typically, a lead is an individual, who filled out your on-site form (with more
information than just a good old email address) in exchange for your content
offer.
As you can see below, leads are located in the middle-top levels of the
marketing and sales funnel. You should be able to distinguish two types of
qualified leads. They’re tightly bound to the funnel and goal completion.
Marketing qualified lead (MQL)
Marketing qualified lead (MQL) is an individual who has raised his hands and
identified herself as deeply engaged in your content and product. MQL might
have requested a demo, downloaded your guide or got hooked on any other
high-interest level offer. (Proving to be sales-ready.)
Sales qualified lead (SQL)
SQL is located right under MQL deeper in your sales funnel. This guy is an MQL
defined by your sales team as follow-up worthy.
So, as you can see, there is a distinct difference between these two guys.
3. Cost per Lead
Another essential key performance indicator each marketing team should be
confronted with is cost per lead. Especially, if you deploy paid campaigns
because, for instance, content marketing is more cost effective.
 source
Cost per lead estimates how effective your marketing campaigns are. The
purpose of this metric is to help your marketing team understand how much
money should be spent on acquiring new leads.
Let’s do some simple math to illustrate cost per lead calculation. For instance,
you utilize pay-per-click (PPC) campaigns at your company. You spent $1,000
on a given ppc campaign, and as a result, 10 users converted to leads. In this
case, cost per lead is $1,000/10 and this amounts to $100.
The rule of thumb is that your CPL shouldn’t be to high in relation to your
product’s price. The more expensive your product gets, the higher CPL
tolerance.
Also, CPL should be included in any ROI calculation.
With a cost per lead, your ultimate goal is to make it as low as possible. Once
your campaign drives nice levels of traffic (and leads) while your CPL is small,
you can consider it a great shot.
4. Cost of Customer Acquisition (COCA)
What is your COCA? Your average cost of client acquisition is an important
metric to track.
To define this number, you need to collect all the company expenses and
investments over a year or any other consistent time frame. Expenses, in this
case, should include all marketing, sales, and business development costs you
cover.
Once you have that number before your eyes, divide it by the number of new
coming customers during that period.
 source
And voila.
Here is your cost of customer acquisition.
Let’s say, all your expenses made up $500,000 last year and your company
managed to acquire 5,000 customers in this period. Then your COCA equals
$500. The cost of each acquired customer is $500. Now ask yourself. Is the
COCA from my example worth the effort? Well, it depends on your customer
lifetime value.
Over-investing or under-investing in each customer is a common mistake
among early-stage startups. Therefore, keep track of your company’s COCA
and make sure you aren’t falling into this trap.
5. Customer Lifetime Value (CLV)
In marketing, customer lifetime value (or CLV) is the value of a given customer
reflecting his contribution to your business. Roughly, CLV is the projected
revenue that a customer generates in a lifetime.
KissMetrics
It determines the net profit attributed to the entire future relationship with your
customers. And gives you a perspective on where to invest your resources and
what customers are the most valuable to you.
Customer lifetime value is one of the metrics that matter most for the present and future
success of your e-commerce business.
And you actually can’t afford to ignore it. Without knowing your customers’
value, you simply won’t have any idea where to head next. It’s like losing your
orientation in the woods with no compass to help.
Read more about CLV in my latest article What is Customer Lifetime Value and
Why You Should Care.
6. Marketing ROI
Marketing ROI (MROI) is, well, what the name implies.
It’s a way to measure revenue generated on top of the investment. In this case,
it’s the amount of money spent on marketing. MROI defines how much money
returns to your wallet once you invest into some marketing campaigns and
implement a given strategy.
 source
It can be used in a broad or narrow scope. MROI covers overall marketing
expenses versus returns or the performance of a single campaign in the given
period.
There are several benefits of using this measurement at your organization:
Justification of marketing spendings. Marketing expenses are a substantial
expenditure of each company and management simply must be aware of
what they are getting in return.
Deciding what to invest your money in. ROI works as a warrant for your next
 investments. Your historical data prove the efficiency of several
campaigns against the others. This is an essential lesson on allocating
your budget wisely to your upcoming marketing activities.
Comparing marketing results with competitors. ROI is not public information,
but you can still use public financial statement data and estimate MROI for
your competitors. And then you get the excellent industry reference you
can confront your results with.
Being accountable Often, marketing spendings become intangible. Some even
say that marketing is about creativity and storytelling that doesn’t always
translate into numbers. This is wrong. Marketing is about delivering
results. All your actions should translate into numbers and metrics.
Therefore, keep an eye on these parameters, make sure all your activities
are just tangible, and you’ve got the numbers for everything. The more you
focus on metrics, the more data-driven you become. And then it gets easier
to make better, informed decisions.
7. Traffic to Lead Ratio
How many website visitors do you need to get one lead?
Traffic to lead ratio is your conversion rate put differently. This metric is a ratio
of website visitors who leave your site without completing any goal versus
your leads in a given timeframe.
Traffic to lead ratio measures your ability to capture leads. This is heavily
dependent on website design, user experience, and the quality of your content.
Let’s say you have 1,000 website visits and 100 new-coming leads per month.
This means your traffic to lead ratio is 10:1, or a 10% conversion rate.
8. Lead to Customer Ratio
We can throw a similar question here:
How many leads do you need to get one customer?
That’s the next, higher level of conversion. This metric illustrates the relation
between your leads and customers in a given timeframe. Let’s say that your
lead to customer conversion rate is 2%. It means you need 200 leads to get 2
customers.
9. Organic Traffic
Building organic traffic is the hardest work you’ll ever put into your website. With that
being said, it’s also the greatest investment of time and effort you can make.
— Matt Southern
High-visibility and massive organic traffic coming to your site is every
entrepreneur’s dream. If you ask me why, then I’ll tell you because it’s the best
traffic for your business. It’s a free and stable stream of website visitors.
However, building it isn’t a quick task to do.
This traffic source deals directly with SEO. Content you put online today will
drive organic traffic tomorrow, the day after tomorrow, next month and
probably several years from now.
The better your ranking for competitive keywords is, the higher levels of
organic traffic you get to your site. Organic traffic grows over time as a result
of successful marketing in search engines and expanding brand awareness.
You’ll say that paid traffic tends to be of higher quality. You’ll be right. But paid
traffic is not sustainable, since it doesn’t last forever. It’s only a temporary
solution that works only as long as you invest in PPC. So you can’t neglect
organic traffic in favor of PPC.
Want to use organic traffic to evaluate your online marketing initiatives? Then
you track your results over long-term intervals to see the improvements over
time.

Back to you
There is much more to talk about regarding marketing key performance
indicators. This is enough for one lesson, let’s pause for a while and try to
review and digest what you’ve learned today.
Sales Revenue
Marketing Qualified Leads (MQL)
Sales Qualified Leads (SQL)
Cost Per Lead (CPL)
Cost of Customer Acquisition (COCA)
Customer Lifetime Value (CLT)
Return on Investment (ROI)
Traffic to Lead
Lead to Customer
Organic Traffic
Whoa. It’s been a long day today. Hope you understand the importance and
calculation of these several key performance indicators mentioned in this
article. Go back to work and make sure you put real numbers on whatever you
can. Does your overall marketing strategy drive you in the right direction? Are
you and your marketing team doing the job right? Do you know the answers
now?
Want to talk about this topic some more? Leave your comment below.
Happy marketing!

Compensation KPIs
Percentage of Cost of Workforce: The cost of the workforce as compared to all
costs can be measured by summing all salaries and dividing by the total
company costs within a given period.
Salary Competitiveness Ratio (SCR): Used to evaluate the competitiveness of
compensation options. Can be determined by dividing the average
 company salary by the average salary offered from competitors or by the
rest of your industry.
Health Care Expense per Current Employee: Provides an understanding of the
comprehensiveness of a company's health care plan. Can be determined by
taking the total price of health care costs divided by all employees.
4Benefits Satisfaction: This allows a company to see how satisfied an
employee is with specific benefits they are offered. Can be determined
through surveys, and can be used to break down each benefit individually.
5Employee Productivity Rate: Helps to measure workforce efficiency over time.
Can be determined by taking the total company revenue and dividing it by
the total number of employees.
6Return on Investment (ROI): As an organization, you want to ensure that the
dollars you are putting into training your employees is paying off. Can be
defined as the profit per dollar invested in social compensations/wages.
Culture KPIs
7Employee Satisfaction Index: This is a key metric underlying talent retention.
Using a company-wide survey can be helpful in gauging employee
happiness.
8Number of Employee Satisfaction Surveys: Helps understand how much effort
is being put into maintaining and improving employee happiness.
9Percentage of Employees Trained in Company Culture: Evaluates the
importance and understanding of company-wide organizational culture.
10 Percentage of Vacation Days Used: Helps show the company attitude
toward a healthy work-life balance. Determined by observing the number of
vacation days used as compared to those unused.
11 Net Promotor Score: Measures how likely an employee is to recommend
their organization as a place to work. This is determined by the difference
in percentage of promotors and detractors.
Employment KPIs
12 Absenteeism Rate: Gives perspective on the amount of labor and
productivity lost due to sickness and otherwise unpredicted leave.
Formula: (Total number of lost workdays due to absence) / (Number of
available workdays in an organization) = (Absenteeism rate)
13 Number of Full-Time Employees: Keeps tabs on the growth of the company
workforce over time.
14 Number of Contractors: Examines the growth in associated workers over
time. Can be compared to the number of full-time workers to better
understand workforce trends.
15 Average Tenure: The average length of time that an employee spends with
the company helps determine employee satisfaction and talent retention.
16 Voluntary Termination Rate: Determined by taking the number of
employee-led resignations from the company over the total number of
terminations in a given time period.
17 Involuntary Termination Rate: Determined by taking the number of
employer-led resignations from the company over the total number of
terminations in a given time period.
18 Retirement Rate: This metric is particularly important for any organization
developing a strategic workforce plan. Can be calculated by looking at the
number of employees who retired as a percentage of the headcount.
19 Average age of Retirement: The summed age of all retiring employees
divided by the number of retiring employees. Being aware of these trends
aid in forecasting retirement and planning for workforce replacement.
20 New Hire 90-Day Failure Rate: Helps determine how successful the talent
acquisition process is at finding the right fit for jobs.
21 First Year Voluntary Termination Rate: Reflects on how welcoming the
company is to new hires. A high percentage suggests that the right people
are being hired, but not embraced.
22 Average Time to Fill a Job Vacancy: Tracks how efficient the hiring
process is in terms of time resources used to fill a vacant spot.
23 Hiring Process Satisfaction Rate: Provides perspective on how well the
process works from the employee’s perspective.
24 Cost per Hire: Acknowledges the amount of resources invested into
acquiring the best talent. Can be determined by averaging the total
marketing, hiring process, and referral (if necessary) costs per hire.
25 Effectiveness of Training: Helps the company understand how comfortable
new hires feel after their training vs. before. Typically determined through
a post-training survey.
26 Training Cost per Employee: Helps to measure the amount invested in
onboarding new hires.
27 Percentage of Employees Trained: Helps a company see how quickly new
hires are being onboarded.
28 Diversity Rate: Keeps track of how successfully the organization is
creating an environment that fosters an open and accepting community.
29 Number of D&I Initiatives Implemented: The number of D&I initiatives
implemented measures organizational commitment to establishing and
maintaining a culture of diversity and inclusion.
30 Attrition Rate: Helps a company figure out how successful they are at
retaining talent. Determined by dividing the number of employees who left
the company in a given period by the average number of employees in that
time period.
31 Turnover Rate For Highest Performers: Turnover of top performers in
particular is negative and comes at a higher cost. This metric helps
 indicates the success of retention efforts and aids planning for talent
replacement. Can be determined by dividing the number of high performers
to leave in the past year by total high performers identified.
32 Average Time to Find a Hire: Helps track the efficiency of the hiring
process.
33 Candidates Interviewed per Hire: Determined by calculating the total
number of candidates interviewed by the total number of hires in a
particular hiring period.
34 Yield Percentage: This is the percentage of candidates remaining after
each round of elimination in the hiring process. A low percentage might
indicate the need to update an unclear or unattractive job posting, and a
high percentage indicates a larger number of qualified candidates with
whom to continue the hiring process.
35 Knowledge Achieved With Training: Helps the company see not specifically
the price of the training, but whether it was effective. Seeing if the
individuals retained knowledge well enough to apply it is critical. Can be
determined by creating an exam, and monitoring exam pass rate %,
average score %, and pre/post training %.
36 Diversity Numbers/Nationalities In The Work Force: Workplace diversity
helps to cultivate innovation and competitive advantage. Diversity of
nationalities and ethnicities can be calculated by noting the differences
 among employee demographic segments.
37 Acceptance Rate: Dividing the number of acceptances by the number of
offers allows organizations to get a sense of how successful their
recruitment strategies are. Industry benchmarks can then be a helpful
comparison.
Performance KPIs
38 Percentage of Job Candidates Who Meet Job Criteria: Helps in evaluating
the effectiveness of job postings in reaching top candidates.
39 Rate of Internal Job Hires: Shows the effectiveness of organizational talent
development.
40 Rate of Internal Referral Hires: Allows managers to see the value added
when current employees help to identify and acquire talent.
41 Performance of New Hires: The performance of new hires can be compared
to that of other employees. Typically done by evaluating performance
reports.
42 Internal Promotions Vs. External Hires: This ratio measures how many
people already working at a company are considered for internal promotion
versus the number of externally attracted people. Can be particularly
effective when looking at organizational succession planning.
43 Internal Promotion Rate: Internal promotions indicate successful retention
 and growth of top performers. Can be determined by dividing the number of
promoted individuals by the total number of employees.
44 Suggestions per Employee: Evaluates employee engagement in improving
business processes, and reflects on the openness of a company to
employee input.
45 HR-to-FTE Ratio: The number of HR full time equivalents divided by the
total number of full time equivalents. Helps determine HR's ability to
provide services. Larger organizations typically have a smaller ratio, but
more HR staff overall, than small businesses.
46 Cycle Time To Process Payroll: Shows timeframe of process, giving
projection if assistance/updated process is needed. This is the number of
business days in the payroll process from start to finish.
47 Cycle Time To Resolve Payroll Errors: The number of business days it
takes to resolve payroll error reported by employees. A high number of
days could indicate the need to review your payroll process.
48 Percentage of Workforce Below Performance Standards: This measure
keeps tab on the amount of low-performing employees in an organization.

Turn your HR KPIs into action.

Once you’ve defined your human resources KPIs, it’s time to start
implementing them by creating a Balanced Scorecard. A scorecard is a cluster
of data that helps your leadership team critically analyze the effectiveness of
your HR strategies in relation to developing a competitive advantage,
improving skills, managing your culture, reducing costs, etc. It provides the
means to monitor workforce indicators, analyze workforce statistics, diagnose
issues, and calculate financial impacts.
Important note: You don’t need to use all of the above 48 KPIs in your
scorecard. Take time to identify which HR metrics will bring the most value to
your organization and department.
Learn everything you need to know about Balanced Scorecards in this article.

Your HR scorecard is important...really

important.
An HR Balanced Scorecard is a tool to keep your staff focused on activities
that not only support the department, but also the company’s overall goals.
Specifically, HR departments are often responsible for controlling costs by
eliminating inefficiencies. Using one of the HR metric examples from above,
minimizing employee turnover frequently appears on scorecards. When an HR
department successfully lowers the turnover rate, it saves the company from
the considerable expense of recruiting, interviewing, and training new
employees. This clear outlining of KPIs in a scorecard makes it easy to see
how short-term KPIs such as reducing turnover can “accrue” value, and are
actually an important part of achieving the organization’s long-term financial
goals.
The other primary benefit of a scorecard is that it demonstrates the strategic
value of human resources to the leadership team. Since HR departments
typically aren’t included in the strategic planning process, creating an HR
scorecard is a way to expose the department’s contributions in concrete,
clearly understood metrics at the executive level. Having an informed and
invested leadership team has been proven to increase HR budgets and
department support.
Having an informed and invested leadership team has been
proven to increase HR budgets and department support.
CLICK TO TWEET

Your job’s not done yet.

Once you’ve successfully aligned your human resources KPIs with the
organization’s goals in a scorecard, you’ve still got work to do. Don’t forget to
make these steps a routine part of your job:
Conduct regular meetings to review HR KPI progress at both the
department and organization level. Consistently looking at the scorecard
will ensure it stays relevant and top of mind for the HR department.
 Review your HR Balanced Scorecard with the leadership team to ensure
progress is aligning with the company’s strategic plan. You’ll be able to
quickly identify performance gaps and make necessary shifts to maintain
that alignment, while also sharing your thoughts and new ideas.
Evaluate scorecard metrics periodically to ensure they are still valid. It’s
almost inevitable that your measures will change at some point and it will
benefit you to get out ahead of this.
Share your HR metrics and progress with the entire organization to
demonstrate the department’s contribution to the strategic goals. It
doesn’t have to be complex or take a gargantuan effort to create—it could
be something as straightforward as an HR KPI dashboard. But what is
important is that you share both positive and negative results. Your
department’s efforts will generate employee goodwill, even if outcomes
are different than expected.
You now have nearly 50 HR KPI examples and know how to put the metrics
into play with a balanced scorecard. Your next step is to choose the KPIs that
will bring the most value to your organization and create your scorecard.
A KPI Dashboard Template makes it easy to analyze
key performance indicators and visualize trends
Want to take this KPI list with you? Click below to download all 48 KPIs in an
Excel document.