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March 4th 2022
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Measuring Success: How to Set Your KPIs

Session overview

What to expect:

Some goals are straightforward and success is easy to measure. Sometimes, though, your goals are more abstract. So how do you measure success of those goals? In this talk, you’ll learn how to set meaningful KPIs, or key performance indicators.

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Elise Alley – Measuring Success – How to Set Your KPIs

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Michelle Frechette: Hello, everybody. Welcome to WordFest where you are in Africa. And I was part of our 24 hours of celebrating the people, the technology and the Big Orange Heart of WordPress WordPress WordFest live is not only delivers a festival educational content, wellness sessions and networking opportunities, but it’s also a fundraiser for Big Orange Heart.

Please visit that donate link at any time. You’ll see it right on the screen there to support the mission of our organization. WordFest Live is a 24 hour opportunity for the WordPress community to come together, to feel less isolated, learn from one another and be present with each other. I am Michelle Frechette.

I am the director of community engagement at stellar WP. I’m also the president of the board at Big Orange Heart. And so everything that we do here at Big Orange Heart is very close to my heart. And, um, I just can’t say enough good things about it. The work that we do, uh, has touched my life as much as anybody else’s for sure.

And, uh, it’s one of the things that we do to be able to actually present something like this. Uh, we started, uh, during the beginning part of the pandemic, trying to figure out what. To reach our community, reduce those feelings of isolation between us. And we continue to do that. Now this is our third iteration of that, and we’re very excited about the work that we’re doing.

Our first speaker up today is Elise Alley. Uh, her talk is titled measuring success. How to set your KPIs. At least Allie is a Texas native living in Oklahoma and has worked with WordPress for about 10 years. Those 10 years have primarily been spent in support, both as a support agent and in management.

She’s currently a support manager with stellar WP. That’s where I work. So we get, uh, working with companies like the event teams and cadence WP. In her free time, Elise enjoys reading, watching her nephews play soccer and cuddling with her pets. But before we go to that video, let’s hear a quick message from our sponsors.

And then after that, I’ll have a few messages for you.

Elise Alley: No matter what part of the business you work in your team has goals to meet in order to be successful. It’s relatively easy to determine whether or not you’ve achieved your goals, but how do you know you’re on the right path? Hold working towards those goals.

One of the best tools you can use to measure your success is key performance indicators or KPIs in case you are unaware of what they are. Let’s start by defining KPIs..

According to KPI dot org key performance indicators are critical indicators of progress toward an intended result. They help us to determine how we are doing and what we need to improve upon and to focus on what matters as Peter Drucker said, what gets measured gets.

Before you start creating your KPIs. It’s essential to remember that while they are tied together, goals, targets, metrics and KPIs are not all the same things, though. The terms are sometimes confused.

Uh, The goal is the end toward which effort is directed. Whereas KPIs are the effort that is directed towards the goal.

A, target is a specific number you were trying to hit. For instance, if you want to increase your revenue by 20%, then 20% is your target.

KPIs and metrics are very intertwined. A metric is a standard of measurement. Whenever you measure anything, that is a metric. Uh, KPI is actually a type of metric, but one specifically used to measure performance. It is also something that has been defined as necessary or important

Confusing or combining these terms can create problems as it does not allow for goals that need to be measured by more than one KPI or where the goal is intangible. So it is better to treat them as distinct terms. In situations where the goal is intangible instead of using a direct measure, you would use several indirect measures, which are sometimes referred to as proxy measures.

For example, say our goal was to improve employee satisfaction, a slightly intangible goal. You would likely need to use several indirect measures, such as the results from an employee engagement survey and the average turnover rate. You could structure your goal, KPIs and targets, something like this.

Your first KPI, maybe something like employees say they are satisfied in the role sitting at target of 90%. Another KPI could be something like employees say they see a long time future here with the target of 80%. And your last KPI may be something like average turnover rate with a target of less than 5%.

By considering these terms separately, we aren’t forced into deciding. All at the same time, we can start off with a goal. Then use KPIs and targets to pin down how we are going to define success and measure our progress towards that goal. Developing a good KPI takes time and developing good targets can take even longer

Goals, however, are comparatively easy to create because they are just describing something that you want to happen.

So now that we know what KPIs are and aren’t. Let’s look at what it takes to create your KPIs, depending on your business team or role, there are potentially limitless numbers of KPIs you could choose from. So choosing the right KPIs can be a daunting task

to start creating your KPIs. You will need to start by creating your goals again while goals and KPIs are different. They’re not totally separate. You need to know your goals in order to create your KPI. Creating your goals is the what and the why, what do you want to achieve? And why do you want achieve that?

You should remember that poor non-specific goals, make it more difficult for your colleagues to set good tactical goals and KPIs.

Once you have set your goals, the next step is determine how you were going to reach those goals. And that is where KPIs come in. An excellent way to get started on creating your KPI is to reverse engineer your goal. So what makes a good KPI? The term you’ll often hear when researching KPIs is the acronym SMART, SMART stands for specific measurable, attainable, relevant, and time-bound a good KPI, should be obvious as to what it is specifically that you were measuring and why it is important.

It should also be measurable so that you can determine whether you were successfully moving towards your goal or not. A smart KPI is also attainable. While it’s always good to set high goals. It is important that it’s something that you can achieve and deliver on because KPIs are used to achieve your goals.

Obviously they should be relevant to those goals as well. Sometimes they are in smart stands for realistic, instead of relevant. If you’re using that option, you’d probably ask your self a question, like is our measure practical and pragmatic? And it should be time bound, meaning you have a set deadline to achieve your goal.

At which point you can reevaluate and create new goals and KPIs. Well, this is a great starting point. The smart acronym has been extended by some from just smart to smart ass. The smart and smart ass frameworks can be used when creating goals and KPIs. The additional three letters for this method may apply better when creating goals, but are helpful when creating KPIs as well.

The additional three letters stand for adaptable, social, and systems-based, you should be able to change and adapt your KPIs and to review them. If they aren’t helping you to reach your goal, you need to adjust. You should not be keeping your KPIs to yourself. You need to work with others on your team when creating your KPIs as well as making sure your team has continued access to your KPIs, your goals and KPIs should also fit with your other goals and KPIs

Will failing one of your goals affect your other goal? If so, then you need to make an adjustment.

Be intentional when you’re creating your KPIs. It is better to have a few meaningful KPIs rather than a bunch of metrics that are unimportant or difficult to understand. You will want to start by considering direct measurements. If you want to increase revenue, the total revenue by month or year would be an example of a direct measurement, but some things can’t be measured directly.

For example, if you want to measure something more intangible, like customer satisfaction. You could use indirect measures, such as C-SAT surveys, average return rate or repurchase rate. If you’re using indirect KPIs, it is safer to use more than one. You should also be careful that you don’t use bad proxy measures.

Talk to your team while you’re creating your KPIs. It is better to work with others, to create the KPIs than it is to be halfway through your project. Only to have someone ask if those measurements are really effective, KPIs do not have to be perfect, but they do need to command the confidence of everyone who will be using them.

Creating buy-in for your KPIs is time. You need to invest at the start, but it’s also time well spent.

Again, goals can be used on multiple levels within your company. You can have different goals and KPIs set for your business as a whole. And then each of the individual teams, common company goals include revenue, growth, profit margin increase, and customer growth and retention. When you are setting strategic company goals, you should be able to explain how that supports the company’s mission.

With customer retention. For example, your goal may be to maintain a 75% retention rate. Your target would be 75% and one of your KPIs might be customer turn rate.

Instead of focusing on overall company goals, you might be focusing on your individual team. When setting goals for your individual teams, they should support the overall company strategy for your customer support team. You might set a goal as customer satisfaction or retention for marketing. It might be increasing organic search growth for organic search growth.

Your KPIs could include something like the number of customers you acquire through organic growth month over month.

So let’s take a look at a couple of examples of smart KPIs for different teams

for your customer service or support team. You might use KPIs like first response time resolution rate, and customer satisfaction ratings using customer surveys or C-SAP. For your customer service or support team, you might use KPIs like first response, time resolution rate, and customer satisfaction ratings using something like customer surveys or SEASET

your project management KPIs might include things like on time completion, percentages, milestones on time percentages and budget variances.

Your marketing team might use KPIs like new customers, upsell and cross-sell rates and social media return on investment.

When creating your KPIs, you should also be aware of two different types of indicators lagging and leading. So what’s the difference between lagging and leading indicator. A lagging indicator measures past performance. Whereas a leading indicator is a predictive measure of future performance.

Generally, we are most interested in a lagging indicators. However, if those lagging indicators take a long time to materialize, maybe something like revenue per quarter, then it’s a good idea to track leading indicators as well. That way you can make better decisions day-to-day.

To look at a short example. If you’re measuring your cashflow payments received would be an example of a lagging indicator. It measures what has already happened. Whereas invoices issued would be an example of a leading indicator because it measures the cash you are likely to receive in the near future.

It is only predictive because it’s not guaranteed that everyone will pay or even pay on time. A longer-term example of leading and lagging indicators might be share of market or share of voice share of market measures, the percentage of revenue you were responsible for within the whole market compared to your competitors.

It’s a lagging indicator, whereas share a voice measures the percentage of your brands media spend within the market compared to your competitors. And the excess share of voice compared to your share of market is predictive of any increase share of market in the future. It’s a leading indicator

along with lagging and leading indicators, you also have qualitative and quantitative indicators. Quantitative indicators are the most straightforward KPIs. Basically they are measured solely by a number. There are two types of quantitative indicators, continuous and discrete. Whereas qualitative indicators are not measured by numbers.

Typically a qualitative KPI is a characteristic of a process or business decision. Again, quantitative KPIs are represented by numbers and include things like sales growth, customer lifetime value. Number of resolve tickets, customer acquisition costs. Monthly recurring revenue and service response time.

Qualitative KPIs, however are not measured by number. Therefore they are often thought of as more difficult to gather. Some ways to gather the qualitative KPIs is through customer feedback, anecdotes, stories, comments, and responses to surveys.

Beyond leading lagging qualitative and quantitative indicators, there are a number of other indicators as well.

There are input indicators which are used to measure resources needed for a process or project and includes things like equipment required. Process indicators are meant to measure the performance of a process and facilitate any necessary changes. Things like tickets resolved, tickets opened and resolution times fall under process indicators as they can tell you how your support team is doing.

Output indicators, measure the success or failure of a process, and are probably the most commonly used KPI type and include revenue, profits, and new customers.

Practical indicators measure the effect of a process used by a business and are typically unique to your business.

Directional indicators look at trends within your company. Where are the metrics moving? Are they improving? Declining, maintaining.

Actionable indicators measure the effectiveness in implementing business changes, including things like processes.

And lastly, financial indicators measure economic stability, growth and business viability. These KPIs are things like gross profit margin, net profit and asset ratios. They typically provide the most straightforward insight into the financial health of a company, but they are usually best paired with other KPIs in order to provide a full picture.

When creating your KPIs, there are a lot of things you need to make sure to remember to do, but there are also some things you want to avoid as well. The first thing you want to avoid is bad proxy measures. As mentioned earlier. Sometimes there are things we want to measure, but are either difficult to measure or are intangible.

In those situations we may measure a KPI we think is related, and this is a proxy measure. It’s not bad to use proxy measures, but it is easy to use bad ones if you aren’t careful. For instance, an increase in social media followers does not necessarily increase positive brand sentiment. KPIs should be measured by performance, not activity, making a KPI like post five social media post, for example, is measuring activity, but creating a post with 5,000 impressions is performance.

You want to make sure that you avoid using weasel words, weasel words are words that are ambiguous words like effective, optimize, streamline, and so on. They make it sound important, but they aren’t measurable and therefore should be avoided when creating your KPIs, and your goals. You also need to make sure you’re sharing your KPIs with your team, as it tells your team what is important and should be inspiring them into action.

You also want to make sure you don’t forget to review your KPIs. Unfortunately, so many people go through the long and sometimes tedious process of developing KPIs, but then don’t look at them until the end of the year or until the project is over. By tracking KPIs and keeping them visible, you can continually spark action and focusing attention of your team.

As mentioned previously, it is very important to keep your KPIs visible and to be able to track them easily. An excellent way to do that is to use a KPI dashboard. A KPI dashboard provides management a platform for monitoring and analyzing. It allows companies to track the performance of individuals, departments, teams, or even the entire company. Dashboards enable management to see trends quickly and can be alerted to the KPIs that have exceeded set thresholds.

You can create your own dashboard or you can use one of the many existing options such as Domo, good data and power BI. You might also already use a platform that includes this type of dashboard. For instance, if you’re using a support platform like Zendesk, Salesforce, or live agent, they all include dashboards.

If you decide to create your own KPI dashboard, here are a couple of things to remember. You want to keep it since. Limit the number of KPIs to a single screen for specific objective project or department overlooking cause users to miss vital information. You should show a trend over time because, for a graph or data to really be useful, it needs context and history.

You want to tell a story with your dashboard. Any graphical interpretation is best understood if it’s in the context of the story. Overpowering color schemes can cause your dashboard to be illegible, pick a clean and simple color palette for your dashboard.

When you’re creating your dashboard, you want to keep in mind the type of dashboard that you need. Strategic dashboards are mostly used to view the business as a whole. They are a great way to see the company’s current status. Operation dashboards are typically used by managers and employees and provide real-time data.

Analytical dashboards are used for investigation of any unexpected anomalies and data. They are sometimes called KPI reports in our tool to determine the cause of any fluctuations.

Another step we emphasized not to skip is reviewing your KPIs regulary. Click.com has outlined an excellent KPI iteration process. First, you want to make sure you schedule a recurring cycle. You’ll want to create a schedule based on your own business and your business needs. When reviewing your KPIs, make sure you’re asking the right questions such as what trends or changes am I saying, are any of these KPIs underperforming, and so on. After you’ve reviewed and questioned your current KPIs, the next step is to make any updates to them and then make sure everyone knows of the changes.

As we learned today, there are many types of KPIs you can use. Because it’s a measurement, the natural assumption is that KPIs should always be a number, something we can count. However, evaluation particularly of service and customer experience often go beyond. To get a true, complete picture of your business, past present, and future, understanding all the types of KPIs as essential. Each one provides valuable insight that can inform strategic decision-making and business development.

So when you walk away from this session today, there are a couple of things you should know. First goals, KPIs, targets and metrics are not all the same thing.

And when creating your KPIs, remember to start with your goals, keep your KPIs smart, or maybe even smart ass, evaluate them often and make sure to share them with your team.

Thank you for joining me today to learn more about KPI’s.

Dan Maby: How you doing Elise? Thank you so much for your session today. Thank you sharing it with us.

Elise Alley: Thank you. Thank you for having me.

Michelle Frechette: Absolutely. I, um, I just want to say you are a smart ass was kick ass.

Absolutely. I’m just going to check. I don’t think we had any questions come in from the chat at all, but I know Dan and I probably have a few for you. Um, I have the pleasure of getting to work with Elise and so I’ve, um, but we have never talked about, we don’t have the same team and we have not talked about, um, you know, KPIs and things like that.

But when I hear acronyms like that, like KPIs and measurements, I know that there are some people that those are triggering things, right? Like it’s a scary thing. When you start to talk about what you’re responsible for those kinds of things. What are some ways that you can think of that can kind of take the stress out of it? Maybe game-ify it. Um, and have fun with meeting goals?

Elise Alley: Sure. Um, it’s not something it’s not something, a stressor that I’ve really come across before. If for me, it’s, you know, we have a goal. And so it’s the question of how do we achieve it? And that’s what KPI KPIs are. So, you know, getting away from the initials and all of that, that can be intimidating. It’s just, what do we want to do?

Where do we want to go? How do we achieve these things? And, uh, finding ways to do that. And, you know, so working with our teams to finding different ways to complete the things that we need to do.

Michelle Frechette: Yeah, that makes perfect sense. Um, what I was working at give WP, sometimes we would, um, set different goals to kind of outside of our normal, regular KPI type structure of like, let’s have a contest to see who can get the most five star reviews this month, those kinds of things.

What do you think about using some of those incentives to help move the team forward? Um, and, uh, you know, adding a little bit of gamification just to keep things insteresting.

Elise Alley: Sure. It’s always fun when you get a chance to, to compete with people. Some of us are more competitive than others, uh, myself included. So, um, it never hurts to game-ify things. We, you know, I work primarily in support and our goal is always to help our customers and make them happy. Um, so we do little things like we do, you know, make sure that we’re reading positive reviews, not just for ourselves, but I make sure in our support meetings that I’m reading positive reviews from customers. I, um, my support supervisor sends out a newsletter every month that has like positive reviews and that sort of thing. So, uh, not necessarily gamifying, but I want to highlight what an awesome job our team is doing. Um, And so making sure everyone else sees that, and they’re getting positive feedback, not just from customers, but then they hear back from the rest of the team who doesn’t always see what’s going on in support um, but they get to hear, you know, from our developers and stuff saying what an awesome job they’re doing as well, when they read those.

Dan Maby: Elise I think the KPIs are, you know, they’re, they’re incredibly important for business development, business growth, you know, expansion and, um, you know, understanding where the business is.

But I think what would your, what would your thoughts be around, uh, when you’re dealing with a smaller business? So a solo in a, you know, a solo business owner and individual that, uh, maybe a freelancer, I, from some of the conversations that I’ve certainly had with freelancers, you get into this idea of KPIs and itself to become a bit, scary, a bit kind of corporate do you have any advice for that kind of, that kind of demographic.

Elise Alley: Um, I think, you know, it’s similar to, to what I said before, whatever, you know, whether you work for a larger business or for yourself, you have some sort of goal, uh, maybe as a freelancer it’s to no longer work for, you know, this nine to five company and to go out on your own, um, So, whether you call that a goal or a dream, or however you phrase it, that’s still a goal, which means there are action steps that you can take and can measure to get to that point. Um, so, you know, maybe it’s having X number of clients. Um, once I hit this point and I’m bringing in this amount of money, then I can walk away from my nine to five job. Again, no matter what size company you are on your own or, or however, it may be, you have goals. And these KPIs are just action steps to get there.

Dan Maby: Absolutely I did. There was a comment coming from the chat there. Wouldn’t this wouldn’t that add stress to the regular work stress,

Elise Alley: but I’ll be honest. I. I love where I work. I have no ambitions to go out on my own. So, um, that is definitely not an additional stress I would want to add, but I do know people that really want to work for themselves and so sometimes you’ve got to balance both of those stresses and it’s not a lot of fun for awhile, but if it gets you to where you want to be, then it’s worth it.

Dan Maby: Yeah. I mean, I think the old, then you can go back to the old kind of adage of, you know, if you, if you don’t plan, you plan to fail. Right. Sort of, and actually know how do you, as a, as a, as an individual, as a freelancer or a remote worker that is maybe potentially isolated and you’re working on their own, um, it can be quite difficult sometimes getting out of your own head and how do you. Work out where the business is going, or what, what direction do you want to take your career in? Um, and I think it all relates back to what you’re talking about here in terms of the kind of goal setting and understanding.

Elise Alley: Yes. And also, you know, I mentioned that, you know, being social, so with the pandemic and everything maybe that limits it some, but whether it’s on phone calls or slack chats or whatever it is, talk about your goals with somebody else, they can help you narrow down what that goal is. They can help you figure out what those steps need to be. Um, so don’t be afraid to share and get other people involved, even if you’re working for yourself, you’ve got friends and family who are going to support your dream and can help you work through the things that you need to, to accomplish that.

Dan Maby: Absolutely just out of interest. And they’re just another question. Do you, do you, um, You don’t necessarily do answer this, but just the question around, do you set KPIs within your personal life? Is that something that you apply across?

Elise Alley: I do not. It is something I, um, when I first became a support supervisor for I themes, uh, we didn’t really, we had never had a support supervisor. We had never had KPIs. Um, so I was basically, I’d been with the team for a long time, but it was basically starting from scratch. Um, and so. What are the first things I did was create goals and KPIs, um, and have worked with, you know, the other teams and stuff and helped people create KPIs and stuff as well. So it’s not something I do outside of work, but have, have done quite a bit inside.

Michelle Frechette: Oh, it is the middle of the night for you. And we appreciate you coming on to do a live Q and a with us. Um, talk. It was a great talk. And I think that, um, you know, definitely is what I’ll be glad as on the, um, you know, at our library of talks for, for future reference for other people as well. Great. Thank you so much, Elise.

I also want to thank our sponsors Bluehost. Cloudways GoDaddy Pro Nexcess Yoast, and WeGlot, uh, be sure to visit their tents and chat with them. You might even win some prizes. There’s some, uh, wheels you can spin for prizes. I actually won something from Nexcess, uh, and we work there. So I don’t know how that’s gonna work, but we’ll figure it out.

I’ll send it over to the photo. Our photo booth is sponsored by multicolor lab and dream host. And those are so much fun. Dan, you did a great job building the photo booth out. I’ve already tweeted out a couple of photos of myself. Um, no Tiara this year. We also, I think I have one of the other room, maybe I’ll maybe I’ll fill it out. We also want to thank our media partners and our micro sponsors in the community tent within the next hour of Cloudways will have their hourly giveaway and the special guests activity. And WeGlot ahead. Well I’m here, Nando joining them at their session.

How could you be part of the five for the future movement right now? We would love your support. Dan, tell him there’s a button, right? Where’s the button?

Dan Maby: There is a button. There’s a button. If you’re in the my.wordfest.live, hit the menu on the left-hand side there, and you’ll see the donate now button. Every single penny goes directly into Big Orange Heart and enables us to deliver free wellbeing and mental health support into the remote working community. So if you have the ability, please do. Please do hit that button. And also please do share that and spread the word about what we’re doing here. And the word, WordFest is open to all. So if you’ve got a colleague, a friend, somebody who’s not, you’re not seeing in the community sent. I think of a message

Michelle Frechette: drag. Drag them in the in it’s worth it for sure. At least I hope you could. I know it’s late, but I hope you could spend a few minutes in the community tent saying hello to people.

We will be back on the hour. We have a little bit of time head over to the community tent, meet some people. Um, on the hour we will be doing a live interview with Topher DeRosia. One of our organizers. And, uh, just continuing on after that with a whole bunch of fun stuff, including one of our sponsor interviews with, uh, probably gonna just destroy his name, but Taco Verdonschot of Yoast. He’ll correct me later if I’m wrong, but we’ll, uh, we’ll see everybody back on the hour. And again, thank you at least for being here with us.

Elise Alley: Thank you for having me.

Dan Maby: Thank you Elise. .

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